Capcom stock down 11.30%, Monster Hunter World sales cited as being a "risk"

Deleted member 7051 · Jul 11, 2018

Orochinagis said:
Because people stopped buying the game with free updates and zero renueves for them aka lootboxes or paid cosmetics?

I think it's actually because World doesn't have the legs Monster Hunter games usually do. Especially on Nintendo consoles, they used to sell very well at launch and get more sales over time as friends convinced each other to buy it so they could play together.

You don't really have that with World because there's no local coop aspect to it, meaning word of mouth purchases are much lower than usually and all the sales were frontloaded instead. Yeah it sold way better than any other Capcom game ever but all that money was confined to one quarter in a time when games really need to continue selling well for several.

I think that's why Capcom is worried, anyway. They probably quite liked that on Nintendo consoles their Monster Hunter games would sell millions at launch and still sell hundreds of thousands every quarter.

Shoshi · Jul 11, 2018

Maybe that Hikikomori Loveless documentary on Youtube which came one month ago which shows alot of MHW footage and gives it a bad image?
I preordered MHW and haven't nearly touched it so maybe they are concerned about people like me not playing or buying DLC

Deleted member 5535 · Jul 11, 2018

So, we got an update on the situation via gamesindustry
https://www.gamesindustry.biz/artic...rns-trigger-13-percent-drop-for-capcom-shares

Nanashrew · Jul 11, 2018

Nemesis162 said:
So, we got an update on the situation via gamesindustry
https://www.gamesindustry.biz/artic...rns-trigger-13-percent-drop-for-capcom-shares

Basically clarification of their single sentence on the decline of MH sales. They were hoping for a much slower decline and a longer tail.

MrCarter · Jul 11, 2018

Winny（๑•̀ㅂ•́）و said:
I think that's why Capcom is worried, anyway. They probably quite liked that on Nintendo consoles their Monster Hunter games would sell millions at launch and still sell hundreds of thousands every quarter.

With MHW far surpassing expectations and being the biggest selling title they ever made, I can assure you, they are not worried in the slightest. PC release will probably sell another couple million too.

Risk Breaker · Jul 11, 2018

hemo memo said:
No they don't. They need better games and realistic expectations.

I didn't say that they *should* do it, I just said this is the kind of market the industry is in and this is *why* devs/publishers are pressured into doing that.

Also the game was a success and sold a lot so as you can see one thing doesn't negate the other.

gordofredito · Jul 11, 2018

Is it because it didn't sell as much in Japan as the rest of the world? This makes no sense at all, it's Capcom's best selling game of all time!

Sammy Samusu · Jul 11, 2018

MrCarter said:
With MHW far surpassing expectations and being the biggest selling title they ever made, I can assure you, they are not worried in the slightest. PC release will probably sell another couple million too.

I'm not sure why you are ignoring the long term worries. It's what this thread is all about. People are not questioning the explosive and successful launch.

And the PC release might sell your couple millions, but it had dev costs too. On the other hand, the 3DS games kept selling for months as catalog titles, no additional costs involved.

It remains a mystery how much MHWG is going to sell. 3DS was a safe place, but PS4 is a risk for annual MH releases. It's really not that difficult to understand.

Jildo Fisterfilly · Jul 11, 2018

Winny（๑•̀ㅂ•́）و said:
I think that's why Capcom is worried, anyway. They probably quite liked that on Nintendo consoles their Monster Hunter games would sell millions at launch and still sell hundreds of thousands every quarter.

Capcom is worried? If by worried you mean ecstatic/happy/partymode because of the crazy success you are correct they are worried.

StevieP · Jul 11, 2018

MrCarter said:
With MHW far surpassing expectations and being the biggest selling title they ever made, I can assure you, they are not worried in the slightest. PC release will probably sell another couple million too.

It's their investors that expected tail and got very little. As with most "big" titles, gta aside, on the hd twins they are the flavour of the month and not the flavour of the year. Let's see if PC gamers embrace it beyond its launch month, as PC gamers are certainly more prone to driving certain titles evergreen. If they don't, the investors' concerns are fully justified.

kennyamr · Jul 11, 2018

So, a few analysts thought Monster Hunter World was going to be the next GTAV, but now they realized its sales are eventually going to subside.
They say Capcom is "underperforming" and hell breaks loose at the stock exchange.
Panic kicks in and investors withdraw their money from the stock, increasing the decline in price.

The financial world is so "interesting."

MouldyK · Jul 11, 2018

This just reminds me of the time Capcom said they thought Resi 7 could get 10 mil LTD after getting 3.5 Million by May 2017 because of reviews and DLC...

...it's now at 5.1 Million by March 2018.

Maybe Capcom need to learn how to make their games live longer in Sales to appease investors.

Deleted member 4359 · Jul 11, 2018

I thought it did good though?

fiendcode · Jul 11, 2018

kennyamr said:
So, a few analysts thought Monster Hunter World was going to be the next GTAV, but now they realized its sales are eventually going to subside.
They say Capcom is "underperforming" and hell breaks loose at the stock exchange.
Panic kicks in and investors withdraw their money from the stock, increasing the decline in price.

The financial world is so "interesting."

Not the next GTAV, aim much lower. More like in line with The Division or Destiny, a really big AAA 3rd party service title but not near something like GTAV. No one was expecting MHW to sell over 90m units and be a mainstay in the western Top 10 sellers for the next 5 years.

Anecdotally I always felt a big part of MHW's upfront success had to do with Destiny 2's failure at player retention and it being positioned the next big multiplayer thing at just the perfect time to draw that PS4/XB1 audience. So it's interesting to see it basically suffer the same fate now.

Razor Mom · Jul 11, 2018

Capcom haven't figured out how to keep a title afloat with post launch support, and the legs of even their sales success stories reflect this. The cost of development was higher than any prior monhun title, and the expected returns relied on that "GaaS" longevity that just isn't there, despite strong initial sales and critical acclaim.

Dr. Caroll · Jul 11, 2018

I'm kinda surprised Capcom haven't put together a Phoenix Wright collection for Switch to keep some steady revenue coming in. The 3DS games are even better looking when running above the 3DS's resolution. The PW games have always had less than amazing sales, but these kinda of "nicher" titles seem to doing really well on the platform.

GuitarGuruu · Jul 11, 2018

I mean it's just about to launch on PC and I know a lot of people who held off on consoles to wait for that version. Doesn't make much sense.

fiendcode · Jul 11, 2018

Razor Mom said:
Capcom haven't figured out how to keep a title afloat with post launch support, and the legs of even their sales success stories reflect this. The cost of development was higher than any prior monhun title, and the expected returns relied on that "GaaS" longevity that just isn't there, despite strong initial sales and critical acclaim.

Development cost was higher but it was really promotional cost that was dramatically higher. MHW was the first time the series was treated as a global AAA game rather than a AAA game in Japan only, and not coincidentally it was was also the first time it was received and sold like a AAA game globally rather than just in Japan.

Dusk Golem · Jul 11, 2018

MouldyK said:
This just reminds me of the time Capcom said they thought Resi 7 could get 10 mil LTD after getting 3.5 Million by May 2017 because of reviews and DLC...

...it's now at 5.1 Million by March 2018.

Maybe Capcom need to learn how to make their games live longer in Sales to appease investors.

For the record, they said 10 million in 10-20 years like how RE5, RE4, and RE6 have surpassed 10 million years later due to ports, remasters, etc. They weren't talking about this year or console generation with that number, but in a decade with other platform ports and the like. They mentioned that due to the PS4/Xbox One remasters of RE4/5/6 reaching those numbers and saying they expect RE7 lifetime will obe day reach that.

And they're probably not wrong.

Razor Mom · Jul 11, 2018

fiendcode said:
Development cost was higher but it was really promotional cost that was dramatically higher. MHW was the first time the series was treated as a global AAA game rather than a AAA game in Japan only, and not coincidentally it was was also the first time it was received and sold like a AAA game globally rather than just in Japan.

I couldn't find any figures regarding development cost (which isn't surprising) but an educated guess would still put it significantly higher than the 3DS games, just for the extra resources in the generation of art assets alone. Nevermind the efforts regarding handling 3 separate platforms. But yeah, definitely the marketing efforts were dramatically higher when compared to prior entries.

Eolz · Jul 11, 2018

Dusk Golem said:
For the record, they said 10 million in 10-20 years like how RE5, RE4, and RE6 have surpassed 10 million years later due to ports, remasters, etc. They weren't talking about this year or console generation with that number, but in a decade with other platform ports and the like. They mentioned that due to the PS4/Xbox One remasters of RE4/5/6 reaching those numbers and saying they expect RE7 lifetime will obe day reach that.

And they're probably not wrong.

That's not exactly what they said no.
RE7 missed expectations over several financial results.
They also never said they expected 10M after ports/etc, unless you got a source for that, as they've always been pretty clear in their expectations to investors (well, outside MHW).

piratethingy · Jul 11, 2018

kennyamr said:
So, a few analysts thought Monster Hunter World was going to be the next GTAV, but now they realized its sales are eventually going to subside.
They say Capcom is "underperforming" and hell breaks loose at the stock exchange.
Panic kicks in and investors withdraw their money from the stock, increasing the decline in price.

The financial world is so "interesting."

OR: analysts thought MHW would make a lot of money for a long time, so they say so and Capcom's stock almost doubles. After a year of data they now say that they may have been too optimistic, and perhaps a 90% increase would have been more reasonable than a 100% increase. The stock market adjusts appropriately. Posters on a videogame message board get weirdly upset and make a lot of weird insinuations about how dumb everyone involved is.

808s & Villainy · Jul 11, 2018

Nanashrew said:
Basically clarification of their single sentence on the decline of MH sales. They were hoping for a much slower decline and a longer tail.

I don't understand how this even needed clarification. At the risk of sounding blunt, some people in here have either been willfully ignorant or at worse illiterate, if they couldn't understand the incredibly simple and straight forward quote in the OP. Too many foolish, overly defensive, completely irrelevant posts about how it sold so well and broke records makes me question the reading comprehension skills and extreme fanboying of a lot of posters

Deleted member 17388 · Jul 11, 2018

gordofredito said:
Is it because it didn't sell as much in Japan as the rest of the world? This makes no sense at all, it's Capcom's best selling game of all time!

Well, investors are a superstitious and scaredly lot, Monster Hunter changing from a Japan-centric and front loaded series might have put them to ask what could be next for the franchise, in terms of long tern revenue.

Whompa · Jul 11, 2018

I think the Monster Hunter brand is incredibly overrated in the hardcore gaming space. I have a feeling Capcom wasn't really considering the global market on this one. Big miscalculation on whomever pushed for it.

lori · Jul 11, 2018

Yeah, they haven't done much in the way of updates beyond new endgame monsters being drip fed over the course of months, which is probably not a very good way of doing it in monhun. What exactly is coming up isn't really communicated beyond the very next upcoming update, either.

Just feels really weird that post launch support is like this for a 8 million title. They probably weren't expecting any of this.

Dusk Golem · Jul 11, 2018

Eolz said:
That's not exactly what they said no.
RE7 missed expectations over several financial results.
They also never said they expected 10M after ports/etc, unless you got a source for that, as they've always been pretty clear in their expectations to investors (well, outside MHW).

https://www.gamesindustry.biz/articles/2017-05-16-capcom-sets-10-million-target-for-resident-evil-7
https://www.vg247.com/2017/10/18/re...ed-capcoms-target-of-4-million-units-shipped/

"The lifecycle for games is growing longer, driven by ongoing digital sales; as a result, Resident Evil 4, 5 and 6 have each sold more than 7.5 to 10 million units cumulatively (including catalog and re-release sales). As such, we will work to achieve 10 million cumulative lifetime unit sales for Resident Evil 7 as well."

I was responding to that poster since some people just read the headline back a year ago ("Capcom expects 10 million this year for RE7? LUL!"), when in actuality it was just an attention-grabbing headline many didn't read past (like the poster I was responding to), and their actual statement was 10 million lifetime sales after ports, remasters, etc., not 10 million in the fiscal year.

They missed their 4 million sales expectation by 0.5 million, but still consider RE7 a success for the record, both due to its critical status and it performance doing pretty good still. The expected units was likely based off of RE6's performance, which had a 6 million goal but only sold 4 million, and likely REmake 2's goal is at 3.5 million due to RE7's performance (which also might explain why their fiscal year goals are so low this year, despite releasing REmake 2 and DMCV this fiscal year, yet only have their sales expectations at 7.1 million despite that including REmake 2, DMCV, MM11, and likely Monster Hunter World PC).

808s & Villainy · Jul 11, 2018

Whompa said:
I think the Monster Hunter brand is incredibly overrated in the hardcore gaming space. I have a feeling Capcom wasn't really considering the global market on this one. Big miscalculation on whomever pushed for it.

Really? It seems Capcom was ONLY considering the global brand and actually ignored the brand domestically, hence why it hasn't been charting well in Japan since around launch

fiendcode · Jul 11, 2018

RE7 missed both it's annual forescasts. FY17 (4m) by 500k and FY18 (2m) by 400k.

Strat · Jul 11, 2018

I look at it this way - MHW cost a lot more money to make than MH has cost in years and years. The game has your typical "big game" explosive opening, and the legs fell out. Maybe ongoing sales was what they planned on to be able to deliver ongoing content? Chicken and egg, there. Previously, they'd have spent less and the game would have sold for longer periods of time, not as much up front, but more than enough to make up for the extra they spent on developing MHW, and an ongoing income is probably better than a giant flush of cash and then nothing. They also generally relied on a "generation" of MH for awhile, putting out updated versions and selling big again. It remains to be seen, but I don't know if an updated version of MHW would necessarily pull in the kind of sales the updates previously would have. I'D buy it, but I don't know that a ton of the people who made MHW the best-selling Capcom game would, and the increased cost of developing new content for MHW would probably require a significant amount of sales for it to make sense.

Maybe now, after the dust has settled, they're realizing Monster Hunter did better for them, dollar for dollar, as a cheaper series on portables/less graphically intensive (and therefore cheaper to develop for) consoles. I don't know. I'm just trying to think of reasons their best selling game EVER would be seen as disappointing. I mean, aside from Capcom being Capcom.

I honestly hope it's all bullshit, because MHW is by far the best in the series and I want them to build off of it for years. My GOTY for 2018 thus far.

Dusk Golem · Jul 11, 2018

fiendcode said:
RE7 missed both it's annual forescasts. FY17 (4m) by 500k and FY18 (2m) by 400k.

Yes, I never was arguing this. I was saying that 10 million was never their fiscal goal, the 10 million statement was for lifetime. Not this console generation, like in a decade with future ports/remasters, etc. For some reason some people really misunderstood that statement as Capcom meaning 10 million sales for RE7 in the fiscal year like the poster I was responding to.

This said, despite not meeting their goals, Capcom do consider RE7 a success, both as it still performed pretty well (it's still among their best selling games ever, they already made back its development cost before it even released so it's been profitable since release. and did shoot up to their top 5 all best selling games within a year), and its positive critical and fan reception, which will help franchise sales long-term.

PopcornMegaphone · Jul 11, 2018

I purchased MH:W last week for 30 dollars and I'm really struggling with it. I don't like the way it looks and it has a slow start.

MouldyK · Jul 11, 2018

Dusk Golem said:
https://www.gamesindustry.biz/articles/2017-05-16-capcom-sets-10-million-target-for-resident-evil-7
https://www.vg247.com/2017/10/18/re...ed-capcoms-target-of-4-million-units-shipped/

"The lifecycle for games is growing longer, driven by ongoing digital sales; as a result, Resident Evil 4, 5 and 6 have each sold more than 7.5 to 10 million units cumulatively (including catalog and re-release sales). As such, we will work to achieve 10 million cumulative lifetime unit sales for Resident Evil 7 as well."

I was responding to that poster since some people just read the headline back a year ago ("Capcom expects 10 million this year for RE7? LUL!"), when in actuality it was just an attention-grabbing headline many didn't read past (like the poster I was responding to), and their actual statement was 10 million lifetime sales after ports, remasters, etc., not 10 million in the fiscal year.

They missed their 4 million sales expectation by 0.5 million, but still consider RE7 a success for the record, both due to its critical status and it performance doing pretty good still. The expected units was likely based off of RE6's performance, which had a 6 million goal but only sold 4 million, and likely REmake 2's goal is at 3.5 million due to RE7's performance (which also might explain why their fiscal year goals are so low this year, despite releasing REmake 2 and DMCV this fiscal year, yet only have their sales expectations at 7.1 million despite that including REmake 2, DMCV, MM11, and likely Monster Hunter World PC).

Do not assume I didn't read the article.

I did, but I still see reaching 10 Million is a lofty goal as sales seemed to have slowed and I cannot see a release getting another 4-5 million.

But I'd love to be proven wrong.

Also, it was this one I read, with a much less click bait title, another assumption you made:

https://www.gamespot.com/articles/resident-evil-7-expected-to-ship-10-million-units-/1100-6450098/

Resident Evil 7's favorable reviewswill help it continue to sell, Capcom said, while the company is also planning marketing events and more DLC to help increase sales further.

And felt they didn't achieve their goals of increased sales via DLC and marketing. Again, I might be wrong.

Vena · Jul 11, 2018

Should be noted, RE7 (unlike 5&6) already used up its Gold re-release as a way to buttress sales early on to meet/try to meet expectations. So it has a major disadvantage in numbers long term when compared to RE5/6.

ZhugeEX · Jul 11, 2018

The layman explanation for this is as such.

Capcom has a hit with Monster Hunter World and that led to record profits in the prior fiscal year. 7.9 million units were shipped in the prior fiscal year (ending March 31st 2018) and Capcom is expecting this game and other catalog titles to perform strongly this year, targeting approx 18m unit sales of catalog titles for this fiscal year. Capcom is betting on continued sales of Monster Hunter World as it implements a live service aspect for the game as well as repeat sales of older titles.

The issue there is Monster Hunter World sales seem to be slowing faster than expected and the live service element hasn't really done much. It's Capcom's fastest and best selling game ever but the majority of sales were recognised in the prior fiscal year, not the current fiscal year. There is also the worry that performance of MHW among existing owners will be lower than expected as post launch engagement and spend drops. Then you have Capcom's catalog lineup which has underperformed and dragged profits down over the past few years. We're talking about titles like Street Fighter V, Dead Rising 4, Marvel Vs Capcom: Infinite, Resident Evil 7 etc... which fell short of targets that Capcom set. On top of that it's easy to see that Capcom has got nowhere in mobile and is struggling in its amusement and other segments.

The outlook for this year is based on Capcom growing its consumer games business through continued catalog sales, new game launches, mobile games and esports. The latter two items is already a tough sell for Capcom and I've explained above why catalog sales and expectations from MHW may be lower than expected. New major title launches this year include Devil May Cry 5 and Resident Evil Remake 2. The expectations for new games this year is fairly low with a target of 7.4m unit sales, this number also includes other new titles such as MM11 and MHW PC which are not expected to become million sellers this year. Essentially it means that Capcom isn't really expecting its major titles this year to be on the same level as past hits and again there is the worry that these titles don't really do anything to grow post launch engagement and spend or help out in other growing segments like esports.

The main reason for the drop, as noted in the OP, is mainly due to MHW expectations post launch. But the above is also an explanation of why investors may be cautious too.

cakely · Jul 11, 2018

Thanks for the great explanation, ZhugeEX .

It looks like a decent portion of the posters in this thread already had the basic ideas right.

Arthoneceron · Jul 11, 2018

So, the whole point isn't how much MHW sold, but how Capcom failed and turn the game some kind of GaaS and the dropping being bigger than expected.

I think that was actually expected, since the audience for MH is frontloaded normally and the Business Model from Capcom isn't the ideal for an GaaS approach.

But I think that Capcom was pretty much capable of doing a good post-release content if they wanted. They just didn't because... well, it's because It's Capcom that we're talking about.

Whompa said:
I think the Monster Hunter brand is incredibly overrated in the hardcore gaming space. I have a feeling Capcom wasn't really considering the global market on this one. Big miscalculation on whomever pushed for it.

I don't think it's overrated, it's a good series with great potential for co-op which isn't a FPS. The fact that there's people which minimize it's potential making stupid comparisons, like "Dark Souls with dinosaurs" recently doesn't turn the series bad.

Jiggy · Jul 11, 2018

808s & Villainy said:
Really? It seems Capcom was ONLY considering the global brand and actually ignored the brand domestically, hence why it hasn't been charting well in Japan since around launch

You mean after it sold 3m copies in Japan? Which is only about a million sales decline from the peak of the 3DS, which itself had a one million sales decline from the peak of the PSP.

Whompa · Jul 11, 2018

Arthoneceron said:
I don't think it's overrated, it's a good series with great potential for co-op which isn't an FPS. The fact that there's people which minimize it's potential making stupid comparisons, like "Dark Souls with dinosaurs" recently doesn't turn the series bad.

I don't think it's bad either. I just think marketing and brand recognition are their biggest hurdles and current weaknesses.

808s & Villainy · Jul 11, 2018

Jiggy said:
You mean after it sold 3m copies in Japan? Which is only about a million sales decline from the peak of the 3DS, which itself had a one million sales decline from the peak of the PSP.

Versus 5m internationally? Also how is your post helping your point? It sold less than before in Japan and doesn't even have the benefit of continuously charting.

impact · Jul 11, 2018

People stopped playing because there was hardly any actual new content after launch. Jho, a limited shitty ass Kulve fight, and a bunch of reskins is not enough content for a game that's been out 6 months.

Funny how now people agree, but back in April and May the threads were filled with apologists saying how long it takes to make a new monster.

Jiggy · Jul 11, 2018

808s & Villainy said:
Versus 5m internationally?

Very strong Western growth, slight Eastern decline

808s & Villainy said:
It sold less than before in Japan

Well, yes, obviously. The PS4 is a far less popular platform in Japan than the 3DS, there was no way it was not declining at least to some degree. What exactly were your expectations prior to launch?

And I'm not sure how any of this quantifies your claim of Capcom straight up ignoring Japan.

808s & Villainy · Jul 11, 2018

Jiggy said:
Well, yes, obviously. The PS4 is a far less popular platform in Japan than the 3DS, there was no way it was not declining at least to some degree. What exactly were your expectations prior to launch?

And I'm not sure how any of this quantifies your claim of Capcom straight up ignoring Japan.

My expectation was for it to keep selling decently in Japan (akin to something like Splatoon), not sell a ton then drop off, which seems to have been Capcom's hope and that of investors as well

Zoid · Jul 11, 2018

Plasma said:

Are they saying the PC port is gonna be bad?

Eolz · Jul 11, 2018

ZhugeEX said:
The layman explanation for this is as such.

Capcom has a hit with Monster Hunter World and that led to record profits in the prior fiscal year. 7.9 million units were shipped in the prior fiscal year (ending March 31st 2018) and Capcom is expecting this game and other catalog titles to perform strongly this year, targeting approx 18m unit sales of catalog titles for this fiscal year. Capcom is betting on continued sales of Monster Hunter World as it implements a live service aspect for the game as well as repeat sales of older titles.

The issue there is Monster Hunter World sales seem to be slowing faster than expected and the live service element hasn't really done much. It's Capcom's fastest and best selling game ever but the majority of sales were recognised in the prior fiscal year, not the current fiscal year. There is also the worry that performance of MHW among existing owners will be lower than expected as post launch engagement and spend drops. Then you have Capcom's catalog lineup which has underperformed and dragged profits down over the past few years. We're talking about titles like Street Fighter V, Dead Rising 4, Marvel Vs Capcom: Infinite, Resident Evil 7 etc... which fell short of targets that Capcom set. On top of that it's easy to see that Capcom has got nowhere in mobile and is struggling in its amusement and other segments.

The outlook for this year is based on Capcom growing its consumer games business through continued catalog sales, new game launches, mobile games and esports. The latter two items is already a tough sell for Capcom and I've explained above why catalog sales and expectations from MHW may be lower than expected. New major title launches this year include Devil May Cry 5 and Resident Evil Remake 2. The expectations for new games this year is fairly low with a target of 7.4m unit sales, this number also includes other new titles such as MM11 and MHW PC which are not expected to become million sellers this year. Essentially it means that Capcom isn't really expecting its major titles this year to be on the same level as past hits and again there is the worry that these titles don't really do anything to grow post launch engagement and spend or help out in other growing segments like esports.

The main reason for the drop, as noted in the OP, is mainly due to MHW expectations post launch. But the above is also an explanation of why investors may be cautious too.

Thanks for the long and detailed explanation!

Nanashrew · Jul 11, 2018

ZhugeEX said:
The layman explanation for this is as such.

Capcom has a hit with Monster Hunter World and that led to record profits in the prior fiscal year. 7.9 million units were shipped in the prior fiscal year (ending March 31st 2018) and Capcom is expecting this game and other catalog titles to perform strongly this year, targeting approx 18m unit sales of catalog titles for this fiscal year. Capcom is betting on continued sales of Monster Hunter World as it implements a live service aspect for the game as well as repeat sales of older titles.

The issue there is Monster Hunter World sales seem to be slowing faster than expected and the live service element hasn't really done much. It's Capcom's fastest and best selling game ever but the majority of sales were recognised in the prior fiscal year, not the current fiscal year. There is also the worry that performance of MHW among existing owners will be lower than expected as post launch engagement and spend drops. Then you have Capcom's catalog lineup which has underperformed and dragged profits down over the past few years. We're talking about titles like Street Fighter V, Dead Rising 4, Marvel Vs Capcom: Infinite, Resident Evil 7 etc... which fell short of targets that Capcom set. On top of that it's easy to see that Capcom has got nowhere in mobile and is struggling in its amusement and other segments.

The outlook for this year is based on Capcom growing its consumer games business through continued catalog sales, new game launches, mobile games and esports. The latter two items is already a tough sell for Capcom and I've explained above why catalog sales and expectations from MHW may be lower than expected. New major title launches this year include Devil May Cry 5 and Resident Evil Remake 2. The expectations for new games this year is fairly low with a target of 7.4m unit sales, this number also includes other new titles such as MM11 and MHW PC which are not expected to become million sellers this year. Essentially it means that Capcom isn't really expecting its major titles this year to be on the same level as past hits and again there is the worry that these titles don't really do anything to grow post launch engagement and spend or help out in other growing segments like esports.

The main reason for the drop, as noted in the OP, is mainly due to MHW expectations post launch. But the above is also an explanation of why investors may be cautious too.

This is a very helpful breakdown. Thanks Zhuge!

808s & Villainy · Jul 11, 2018

Nanashrew said:
This is a very helpful breakdown. Thanks Zhuge!

I'm pretty sure the post will be largely ignored and people will keep going "B-but it sold a ton at launch and broke records! They can't expect every game to be GTA5!"

MrCarter · Jul 11, 2018

Dusk Golem said:
They missed their 4 million sales expectation by 0.5 million, but still consider RE7 a success for the record, both due to its critical status and it performance doing pretty good still. The expected units was likely based off of RE6's performance, which had a 6 million goal but only sold 4 million, and likely REmake 2's goal is at 3.5 million due to RE7's performance (which also might explain why their fiscal year goals are so low this year, despite releasing REmake 2 and DMCV this fiscal year, yet only have their sales expectations at 7.1 million despite that including REmake 2, DMCV, MM11, and likely Monster Hunter World PC).

RE7 was definitely a success critically and through sales. I expect RE2 remake and DMCV to break some records too.

Eolz · Jul 11, 2018

808s & Villainy said:
I'm pretty sure the post will be largely ignored and people will keep going "B-but it sold a ton at launch and broke records! They can't expect every game to be GTA5!"

Should be put in the OP tbh. Made by an analyst, an admin, and is more than covering all bases.

MrCarter · Jul 11, 2018

I think the PC release should help MHW sales (which are huge already) more this fiscal year. With more FREE monsters, updates and perhaps the much anticipated G rank, this could easily sell above 10 million LTD.

Capcom stock down 11.30%, Monster Hunter World sales cited as being a "risk"

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