Capcom still aspires to sell 100 million games per year, and tells investors that it intends to efficiently manage ROI (Return on Investment) via maximizing game sales and not cutting its development budgets.
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Capcom recently posted its Q1’FY24 results and an accompanying Q&A session with investors and analysts. The Japanese games-maker has reiterated its plan for success, saying that game unit sales are still the main focus for the company as a whole.
The house of Monster Hunter, Resident Evil, and Mega Man still holds its lofty goal of achieving 100 million annual game sales, but it still has a long way to go–throughout FY23 (April 2023 – March 2024), Capcom had sold a total of 50 million games. The publisher’s plan hinges on the cumulative effect of game sales through one main lever: Strategically-planned discounts across its library of evergreen games. Capcom has seen significant success with this tactic as its games regularly go on sale on digital platforms like Steam, the PlayStation Store, and the Microsoft Store.
3Capcom sold 9.5 million games in Q1’24, down -30% year-over-year, or a reduction of 4 million units.
In the Q&A session, Capcom delivered some interesting answers to investors. Below we have a snippet of the more noteworthy questions and answers.
Capcom says it wants to maximize sales to achieve high ROI without slashing dev budgets:
Q – Development investment is planned to be 53.5 billion yen for the full year, a 24% increase over the previous year, but will it continue to increase?
A – The main factors driving increases in development investment are an increase in outsourcing and personnel expenses, however the rate of increase depends on outsourcing utilization. Development investment is managed by ROI, and we have a system in place to manage investment and earnings. Essentially, we aim to improve ROI by maximizing sales rather than curtailing development investment.
Capcom on how discounts lead to sustained game unit sales:
Q – Monster Hunter: World and the Monster Hunter World: Iceborne continue to sell well; is this due to exposure brought on by Monster Hunter Wilds? Do you expect these levels of sales to continue or is it temporary?
A – We see this a result of strategic discounting of titles in the series, including lowering the price of Monster Hunter: World to $9.99 in conjunction with the announcement of Monster Hunter Wilds last December. We will continue to release information regarding titles while closely monitoring sales trends going forward.
Capcom is cautiously optimistic on its 100 million sales goal:
Q – Will it be possible to achieve your goal of 100 million units in annual sales?
A – We believe it will be difficult to achieve this goal through catalog title sales measures alone, and we will continue to explore optimal promotional measures for each country and region to increase awareness, while analyzing local price sensitivity.