CAPCOM CO., LTD.

Business Details

The core segment engaged in the development and sale of home video game software and mobile content. Centered on flagship IPs such as Resident Evil, Monster Hunter, and Street Fighter, the segment sold 253 titles in 244 countries and regions worldwide. It focuses primarily on the ongoing strengthening of digital sales, aiming to maximize revenue through the launch of new titles combined with long-term repeat sales of existing titles. Development and sales operations are led by Capcom Co., Ltd., supported by overseas subsidiaries including CAPCOM U.S.A. and CE EUROPE LTD.

Recent Overview

Net sales rose 15.3% driven by the new title Resident Evil Requiem surpassing 6 million units sold, though the operating margin declined.

In FY2026 (ending March 2026), the Digital Contents Business achieved net sales of ¥144,277 million (up 15.3% year on year) and segment operating income of ¥70,618 million (up 8.4% year on year). Growth was driven by the new title Resident Evil Requiem surpassing 6 million units sold and a substantial expansion in repeat title unit sales to 49.46 million units (up from 39.49 million units in the prior fiscal year). On the other hand, segment operating margin declined from 52.1% to 48.9%, reflecting increased costs associated with the new recognition of video assets (¥9,909 million) and the strengthening of the development workforce. For FY2027 (ending March 2027), the company plans to launch entirely new IPs Pragmata and Onimusha: Way of the Sword.

Key Products

Growth Drivers

• Expansion of new unit sales through major new titles based on flagship IPs (Resident Evil Requiem surpassing 6 million units, with entirely new IPs Pragmata and Onimusha: Way of the Sword planned for the next fiscal year)
• Continued long-term, high-margin repeat sales through enhanced digital sales measures (repeat title unit sales of 49.46 million units, up 9.97 million units year on year)
• Expansion of sales opportunities and broadening of the user base through ports of titles to new-generation game consoles such as Nintendo Switch 2
• Enhancement of IP brand power and cultivation of latent users through collaboration with esports, visual media (Netflix anime, Hollywood live-action films), and character merchandising businesses
• Sustained strengthening of the development organization through annual increases of over 100 development staff (3,011 development staff as of the end of FY2026), advancing the long-term goal of 100 million annual unit sales
• Deepening of global sales through expansion of the sales network to 244 countries and regions and enhanced marketing tailored to regional characteristics

Risks

• The risk that shifts in launch timing significantly affect performance, given that flagship titles require two or more years to develop
• A trend of rising game content development costs associated with the emergence of high-performance game consoles (including new recognition of ¥9,909 million in video assets and expanding investment scale)
• Risk of revenue concentration with Valve Corporation (Steam), which accounted for 31.1% of net sales for the fiscal year under review
• Foreign exchange risk (a high proportion of global sales exposes profitability to pressure during yen appreciation)
• Information security risk (requiring continued countermeasures in light of past cyberattack incidents)
• The risk of rapid business environment change as the spread of generative AI and other technological innovations rapidly increases content delivery channels and device diversification

Business Details

A business operating directly-managed amusement facilities equipped with game machines, as well as merchandise stores. In addition to existing store formats, the company is actively expanding new formats such as Tsukamoyo (a crane-game specialty store), Capcom Store (a character merchandise retail store), and CAPCOM CONNECT SPACE (an experiential facility). By generating IP synergies with the Digital Contents Business, the segment aims to enhance the drawing power of physical stores both domestically and internationally. As of the end of FY2026 (ending March 2026), the company operated 61 stores.

Recent Overview

Accelerated new-format store openings and the opening of the first overseas directly-managed store drove net sales up 12.8% year on year, with operating income showing a substantial improvement of 31.6% year on year.

In FY2026 (ending March 2026), the company opened 9 stores in total (with 1 closure), expanding the period-end store count to 61 (up from 53 at the end of the prior fiscal year). The company actively expanded new formats, including the experiential facility CAPCOM CONNECT SPACE (Osaka Prefecture, July) and CAPCOMIX Abeno Hoop (Osaka Prefecture, March). In March, the company also opened its first overseas directly-managed store, CAPCOM STORE TAIPEI (Taiwan). Steady operation of existing stores combined with the effects of new-format store openings contributed to net sales of ¥25,656 million (up 12.8% year on year) and operating income of ¥3,201 million (up 31.6% year on year). Operating margin also improved from 10.7% to 12.5%.

Key Products

Growth Drivers

• Expansion of store count through aggressive openings of new-format stores (Tsukamoyo, Capcom Store, CAPCOM CONNECT SPACE, CAPCOMIX)
• Advancement of international expansion, spearheaded by the opening of the first overseas directly-managed store (CAPCOM STORE TAIPEI)
• Enhanced customer-drawing power at physical stores through collaboration with Capcom IP, and synergy effects with the Digital Contents Business
• Maximization of hands-on experiential value through in-store events, generating synergy effects with other business segments
• Maintenance of a stable revenue base through the continued steady operation of existing stores

Risks

• Impact on visitor numbers from changes in consumer behavior (frugality trends and diversification of consumption patterns)
• Increased fixed-cost burden from rising store-opening costs and expanding depreciation expenses associated with new-format stores
• Risk of rising operating costs, including labor and utility expenses
• Intensifying competition for customers with rival amusement facilities
• Foreign exchange risk and country risk associated with overseas store expansion
• Risk of impairment of fixed assets (in the event of store closures or business deterioration)

Business Details

A segment engaged in the development, manufacture, and sale of gaming machines (mainly smart pachislot machines) sold to store operators and other businesses. By continuously launching new machines that leverage the company's own popular IPs such as Resident Evil, Monster Hunter, Devil May Cry, and Onimusha, the segment maintains a high operating margin against the backdrop of the expanding smart pachislot market, making it a significant profit contributor. Even after new machines are launched, high player ratings drive long operational lifespans and repeat sales, boosting revenue.

Recent Overview

The launch of 2 new machines combined with strong repeat sales of prior-fiscal-year machines drove operating margin above 56%.

In FY2026 (ending March 2026), the company launched the smart pachislot machine Devil May Cry 5 Stylish Tribe (11 thousand units), which went into operation in June, and Shin Onimusha 3 (24.5 thousand units), which went into operation in October. In addition, Monster Hunter Rise and Resident Evil 5, which went into operation in the prior fiscal year, continued to see strong repeat sales owing to high player ratings and long operational lifespans. As a result, net sales reached ¥17,780 million (up 13.9% year on year) and operating income reached ¥10,033 million (up 49.7% year on year), a substantial profit increase, with operating margin rising to 56.4%.

Key Products

Growth Drivers

• Continued stable demand from the ongoing spread of the smart pachislot machine market, providing a tailwind for the segment as a whole
• Expansion of unit sales through the continuous launch of new machines leveraging the company's own popular IPs, including Resident Evil, Monster Hunter, Devil May Cry, and Onimusha
• Long operational lifespans driven by high player ratings even after new machine launches, boosting revenue through repeat sales (additional orders)
• Plans to launch 4 machines with total planned unit sales of 53 thousand units in the next fiscal year (FY2027, ending March 2027), suggesting continued revenue contribution through a robust pipeline

Risks

• The pachislot market is highly susceptible to regulatory trends (such as revisions to gaming machine regulations), and changes in laws and regulations can directly impact unit sales
• If the market shift toward smart pachislot machines reaches saturation, a lull in demand could occur
• If market evaluation (operational uptake) of a new machine is weak, repeat sales may not materialize, risking a significant decline in revenue
• Capital expenditure (¥71 million) and depreciation (¥156 million) are extremely small relative to segment assets (¥12,283 million), creating a risk of dependence on the production capacity of manufacturing subcontractors

Business Details

This segment is composed mainly of character-merchandising and related businesses not included in the reportable segments (Digital Contents, Amusement Facilities, and Amusement Equipment). Through esports business (CAPCOM Pro Tour, Street Fighter League, etc.), visual media business (Netflix anime streaming, Hollywood live-action films), and character merchandise and event operations, the segment is responsible for enhancing the brand value of flagship IPs and cultivating latent users. Although the segment's sales scale is small, accounting for approximately 3.9% of total company sales in FY2026 (ending March 2026), it is positioned as a key hub of the IP strategy with substantial spillover effects on other segments.

Recent Overview

Net sales grew 25.2% and operating income grew 46.7%, reflecting high growth with expansion across esports, visual media, and character merchandising on all fronts.

In FY2026 (ending March 2026), the Other Business segment achieved net sales of ¥7,650 million (up 25.2% year on year) and operating income of ¥3,645 million (up 46.7% year on year), a substantial increase in both revenue and profit. In esports, the grand finals held at Ryogoku Kokugikan drew a record-high attendance of 20,000 spectators. In visual media, the Netflix anime Devil May Cry was streamed globally, and an October 2026 release date was announced for the Hollywood live-action film. Segment assets increased substantially from ¥1,922 million in the prior fiscal year to ¥10,801 million, reflecting expanded investment in video assets and related areas.

Key Products

Growth Drivers

• Increased revenue from viewers and sponsors driven by the global expansion of esports tournaments (the grand finals held at Ryogoku Kokugikan achieved a record-high attendance of 20,000 spectators)
• Increased demand for character licensing and merchandise driven by expanding global recognition of flagship IPs (Street Fighter 6, Resident Evil, Monster Hunter, etc.)
• Acquisition of new fan segments through the expansion of anime and visual content onto global platforms such as Netflix (worldwide streaming of Devil May Cry)
• Further enhancement of IP brand value through the Street Fighter Hollywood live-action film (scheduled for release in October 2026)
• Expansion of collaborations with other industries and maximization of IP revenue opportunities through advancement of the one-content, multi-use strategy
• Enhancement of corporate brand value and cultivation of latent users through event operations such as the 'Grand Capcom Exhibition'

Risks

• Although the segment's scale is small at approximately 3-4% of total company sales, limiting the impact of revenue fluctuations in the visual media and esports business on overall company performance, the risk of IP value impairment could spill over into other segments
• The risk that IP brand value could be impaired depending on the box-office performance of visual media works (such as Hollywood live-action films) or the reception on streaming platforms
• The risk of declining profitability due to intensifying competition in the esports market and increasing competition to attract viewers and sponsors
• Foreign exchange risk (license income and video streaming income generated globally are denominated in foreign currencies)
• High dependence on flagship IPs, with the risk that declining popularity of specific titles could directly impact the segment's overall revenue
• Investment recovery risk associated with expanding investment in video assets and other areas (segment assets increased approximately 5.6-fold year on year)