Capcom revealed in their annual report that they believe the packaged game market is going to shrink, by as much as $ 5.3 billion by 2017. On the flip side, they think DLC will grow by $ 7.8 billion, and with these predictions, intend to adjust their business strategies accordingly.
It would not be fair to discuss this without the proper context. Capcom is making these projections in relation to explaining their financial results for the year, which saw sales go up (94 million yen) but profits sink (10 million yen). The venerable developer struggled to explain why their big game releases in the last year did not meet sales projections.
Their point of view on the video game market itself right now is that the wait for next-generation consoles, the increasing importance of DLC, and the rise in mobile and PC online markets have had an adverse effect on their business. Capcom thinks they could have made more money in particular if they had more DLC available to offer on existing games rather than releasing a larger number of new games.
If you are a Capcom fan, there is one sliver of good news to take from the report: Capcom recognizes outsourcing their games has led to quality issues, so they intend to bring more game development back in-house, as well as monitor the progress of games still contracted outside more closely.
Whether you agree with Capcom or not on their statement, it’s important to recognize that they make these projections ultimately to understand what mistakes they made this year, and what they can do to stay a profitable business. I also remain frustrated at Capcom’s many decisions (still waiting on a new Megaman game), but above all else, I do want to see them keep making games.
Image is of Capcom CEO Kenzo Tsujimoto and COO Haruhiro Tsujimoto, from their annual report.
Source: Capcom