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Capcom fingers ‘rapid changes,’ mobile market as culprits of low profit forecast

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Dead Rising 3 publisher Capcom projects to see less profits than previously projected when the company’s fiscal year ends today, citing “rapid changes” in the video games market and mobile efforts not yet yielding results, according to a report today from GameSpot.

Cutting its profit projections by more than half –– 51.5 percent –– Capcom goes from expecting to post a profit of $66 million to a net income of just $31.9 million.

The $33.9 million difference in revenues is what Capcom is calling a “special loss” for the year and is likely due to the publisher’s poor results in the mobile sector.

"Due to rapid changes taking place in the market for games, Capcom is building a sound base for earnings by reorganizing the product development framework and improving development processes. These are two core elements of the company's operations,” Capcom said.

“The objective of these activities is to earn consistent earnings in each fiscal year. However, these initiatives have not yet started to produce benefits mainly in the Mobile Contents."

Capcom indicated that its net sales forecast did increase by 4.6 percent from $939 million to $983 million, but the publisher said still anticipates declines in several categories.

"Sales are expected to be higher than one year earlier due in part to the launch of major titles," Capcom said. "However, Capcom anticipates declines in operating income, ordinary income, and net income because of increases in the cost of sales and selling, general, and administrative expenses."

Earlier this year Capcom operations chief Haruhiro Tsujimoto pointed to the increasing popularity of smartphones and tablets along with the “increasing social nature of games” as one of the “momentous shifts” in the gaming industry that have affected the publisher’s recent performance.

You can read that full Examiner report by clicking here.

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