Today Capcom announced its financial results for the second quarter of fiscal year 2019, which is related to the period between July 1 and September 30.
As you can see in the table below, net sales have declined 14% year-on-year.
Yet, that’s only part of the picture, as operating income has grown 33.2% year-on-year.
We also get an overview of Capcom’s performance, including the news that Monster Hunter: World Iceborne shipped 2.8 million units in less than a month (as of September 30).
We also learn that the expansion sold primarily on digital channels, and that the decline in overall net sales was partly due to “promoting the shift from physical package sales to digital sales.”
“During the six months ended September 30, 2019, with the tangible roll-out of the 5G era on the horizon, the industry saw a wave of significant changes coming in anticipation of new business opportunities.
In such an environment, the Company focused on bolstering our evelopment structure, which is the source of our competitiveness. For example, in order to curb costs and shorten development cycles, the Company improved the development process and revenue management while increasing the ratio of internal development by growing our developer workforce.
The Company also focused resources on medium- to long-term enhancement of enterprise value, including the allocation of more funds and human resources in esports, which is an area with high future growth potential. In such a situation, Monster Hunter World: Iceborne (for PlayStation 4 and Xbox One), our flagship title for the current fiscal year that launched in September, shipped over 2.8 million units worldwide, supported by consistent popularity. In addition, profit improved due to the continued popularity of major catalog titles, particularly in overseas markets, and the growth of highly profitable digital download sales.
The resulting net sales for the six months ended September 30, 2019 were 37,272 million yen (down 14.0% from the same term in the previous fiscal year), the decrease due in part to promoting the shift from physical package sales to digital sales.
In terms of profitability, profit improved at all levels due to the contribution of the hit title Monster Hunter World: Iceborne, primarily sold digitally, as well as to an increase in the percentage of highly profitable digital sales within catalog title sales.
Specifically, operating income was 13,992 million yen (up 33.2% from the same term in the previous fiscal year), ordinary income was 14,002 million yen (up 36.0% from the same term in the previous fiscal year), and net income attributable to the owners of the parent was 9,846 million yen (up 43.7% from the same term in the previous fiscal year).”
We also get a specific overview for Capcom’s Digital Contents business, which includes video games.
Besides the strong performance of Iceborne, we hear that sales of Resident Evil 2 and Devil May Cry 5 continued to grow.
“In this business, Monster Hunter World: Iceborne (for PlayStation 4 and Xbox One) experienced solid sales and led profit growth. In addition, healthy sales of high-margin catalog titles also boosted profit. Specifically, sales of Resident Evil 2 (for PlayStation 4, Xbox One and PC) and Devil May Cry 5 (for Xbox One, PlayStation 4, and PC), both hits in the previous fiscal year, continued to grow due to an expanded user base. Monster Hunter: World (for PlayStation 4, Xbox One and PC), which was launched in January 2018, also continued to display its long sales life.
The resulting net sales were 29,163 million yen (down 14.7% from the same term in the previous fiscal year) due to an increase in the percentage of digital sales. Operating income was 14,503 million yen (up 23.4% from the same term in the previous fiscal year) mainly due to contributions from Monster Hunter World: Iceborne and catalog titles.”
If you’d like to compare, you can also check out the previous financial results, announced by Capcom in August.
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