Capcom FY3/21 1st Quarter Q&A - Digital sales data by platform & region, MH title, RE3 Digital ratio 60%, Next-Gen software pricing

[ggx2ac]

Updated with English transcript.

Source: http://www.capcom.co.jp/ir/english/data/pdf/explanation/2020/1st/explanation_2020_1st_02.pdf

Regarding development delays:

Q: Your full-year guidance remains unchanged; tell me about the risk of delays for titles currently under development.

A: The extent of COVID-19's impact remains unforeseeable, however at this point in time we believe there are no risks of delay to development that would significantly affect our business results for this fiscal year. In the medium-term, there may be adjustments to our release lineup, however none that we think will cause a major deviation from our medium-term plan.

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Regarding increased demand (due to COVID-19):

Q: How has COVID-19 increased demand and how long will this continue?

A: Growth in digital sales has been driven by numerous factors, making it difficult to measure the individual effect that COVID-19 has had. However, while we may have benefited somewhat from increased demand for digital games, it is likely that the casual gaming audience, who under normal circumstances do not play games as often, has been turning to games with greater frequency as an alternate use of leisure time while restrictions on going outside the home are in place; as a publisher who creates content primarily for the core gaming audience, we believe that any effects to our business will be limited.

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1st Quarter Results compared to internal plan:

Q: How do your Q1 results compare to internal projections?

A: Results for Q1 have exceeded our internal projections. In our Consumer business, we have made good progress with digital sales of our catalog to the full-year plan. We aim to maintain a similar momentum into Q2 and beyond through tactics such as price optimization, working toward achieving our full-year plan.

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Digital Sales growth:

Q: Digital sales have continued to be strong in recent years. Is there still room for growth here?

A: The characteristics for digital game markets differ by region, and we have not yet been able to universally support all markets at this point in time. Going forward we aim to continue expansion, targeting a 90% digital sales ratio.

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About that collaboration with Tencent:

Q: What is the outlook for the alliance title with Tencent?

A: As this title represents an out-licensing arrangement, it differs from our in-house titles and will not provide continuous revenue following release. The title is currently being readied for launch.

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The plan has exceeded the plan:

Q: How do your Q1 results by segment compare to internal projections?

A: Q1 results for Digital Contents (excluding Mobile Contents), Arcade Operations, Amusement Equipments and Other Businesses exceeded projections, beating our internal plan overall.

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Why no change in forecast:

Q: Given the progress you've made in the Digital Contents business with Q1 results, does the fact that you have maintained full-year guidance mean that expectations for the major new title scheduled for the 2H are not that high?

A: Regardless of the sales plan for the major title in the 2H, our full-year guidance remains unchanged as we are still contending with the issues brought by COVID-19 and are not at a point where we can clearly foresee business results beyond Q2.

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Catalogue titles that contributed to the first quarter:

Q: Tell me which catalog titles contributed during Q1 that are not mentioned in the financial results materials.

A: These included Resident Evil 4 (for current-generation platforms), Resident Evil 6 (for current-generation platforms), Dragon's Dogma: Dark Arisen (for current-generation platforms), Devil May Cry 5 , and Resident Evil 5 (for current- generation platforms).

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RE3 Digital sales ratio:

Q: Tell me about the digital sales ratio trend for new releases.

A: As this differs by title we are unable to provide specific information for a trend. However, we are monitoring this with interest as it will be a KPI important for sales strategy going forward. The digital sales ratio for Resident Evil 3 , released in April 2020, is approximately 60%.

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Digital sales breakdown by platform, and then a regional breakdown for RE3 digital sales:

Q: Give me a breakdown of digital sales by platform and region.

A: In general, digital sales by platform were: 35% on PlayStation consoles, 35% on PC, 15% on Xbox devices and 15% on Nintendo consoles. Regionally, trends overall remained the same as they had been up to this point. Looking at regional sales of Resident Evil 3 by volume, starting with the region with the highest volume and going downward in order they were: North America, Europe, Japan, Asia.

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About that Monster Hunter title for Highschool students:

Q: Tell me about the Monster Hunter title you are developing for teenage children, mentioned at your Annual General Meeting of Shareholders.

A: There is no information that we can share at this time.

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RE3 price measures:

Q: Tell me how Resident Evil 3 has been received, and what pricing strategies there are for the future.

A: With reference to sales trends for the original Resident Evil 3: Nemesis as well, results have not especially deviated from our internal sales plan. Looking ahead, we will consider pricing strategies targeting the holiday season, starting in autumn and running to the end of the year.

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Regarding Next-Gen software pricing:

Q: What is your policy regarding pricing for next-generation titles?

A: We do not have a set policy at this time. We will consider our approach having analyzed both our strengths and weaknesses while closely monitoring industry trends.

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[Wander_]

they really would like to ask.

 

[Neonep]

The no delay thing is super interesting, that means they have some announcements still to be made this year.

 

[Hero of Legend]

Nintendo matching Xbox in digital sales is good I assume. In the past they'd have easily been dead last (bar MH on 3DS).

 

[Deleted member 31092]

"Monster Hunter for highschoolers" sounds like a slice of life Anime lol.

Also not a good showing for XBO to have the same digital share as Switch considering their respective lineups.

 

[Deleted member 9746]

I'm happy to hear the plan has exceeded the plan.

 

[Platy]

Nintendo matching Xbox in digital sales is good I assume. In the past they'd have easily been dead last (bar MH on 3DS).

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specially considering how little switch received compared to xbox

 

[RestEerie]

Wow....aiming to have 90% in digital sales...rip physical

 

[AquaWateria]

Gotta say the Nintendo fanbase really love eating up Capcom's old ports considering thats most support they can even offer the system.

But hey I'm one of those fools that buy up their old ports lol.

 

[The Last One]

Wow 60%. Interested in VII Remake results regarding the digital physical split, it's probably close to this since both game came out really close to each other.

 

[cw_sasuke]

Next MH unveil at the big fall Direct in September/October or are we thinking next year ?

Gotta say the Nintendo fanbase really love eating up Capcom's old ports considering thats most support they can even offer the system.

But hey I'm one of those fools that buy up their old ports lol.

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I mean most of these ports are quality and based on great games and classics.

It's not like the customer is buying shovelware lol. Just in terms of quality software not many publisher bring more to the Switch table than Capcom - even thought it's mostly older titles.

 

[s y]

lol @ the switch matching xbox sales considering the output. nintendo fans fiending for capcom.

 

[Augemitbutter]

Wow....aiming to have 90% in digital sales...rip physical

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they would like to dream. Not anytime soon unless they go full service.

 

[AquaWateria]

Next MH unveil at the big fall Direct in September/October or are we thinking next year ?


I mean most of these ports are quality and based on great games and classics.

It's not like the customer is buying shovelware lol. Just in terms of quality software not many publisher bring more to the Switch table than Capcom - even thought it's mostly older titles.

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I can definitely agree on the ports being quality, but damn some of them can be pricey tho.

 

[ZeroCDR]

gimme those FY2020 sku announcements pls

 

[cw_sasuke]

I can definitely agree on the ports being quality, but damn some of them can be pricey tho.

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True though I think most people buy these games once on sale...on every digital store. Capcom has their games all the time on sales and the audience usually knows to wait a bit...especially on Switch.

PS. But the results are overall positive when you consider that at the beginning of the Switch cycle Capcom was doing what they could to ignore the platform ...when it was even included for the Mega Man Legacy Collections lol.

 

[Yuntu]

they would like to dream. Not anytime soon unless they go full service.

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Why not? RE3 is already at 60% and this gen digital has been growing in a very fast fashion. 90% at the end of next gen is entirely possible imo.

 

[Augemitbutter]

Why not? RE3 is already at 60% and this gen digital has been growing in a very fast fashion. 90% at the end of next gen is entirely possible imo.

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we don't know how many people are going to give up all their rights buying full price games willy-nilly in the future. Lots of uncertainty with the virus.

 

[AshenOne]

Digital Sales percentage in general: PlayStation 35%, PC 35%, Xbox 15%, and Nintendo 15%.

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Hmmm....I wonder how much is their Digital sales percentage vs Physical in general. 70% vs 30% or 75% vs 25%?

 

[Yuntu]

we don't know how many people are going to give up all their rights buying full price games willy-nilly in the future. Lots of uncertainty with the virus.

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This trend was already there before Covid.

 

[Mr Swine]

Gotta say the Nintendo fanbase really love eating up Capcom's old ports considering thats most support they can even offer the system.

But hey I'm one of those fools that buy up their old ports lol.

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Well we are two then.

But then again where can you buy Capcom last gen games and play them on a portable?

 

[shadowman16]

Well we are two then.

But then again where can you buy Capcom last gen games and play them on a portable?

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Portable Capcom games are pretty much the reason I've grabbed all (yes, even DMC2...) the Capcom ports on Switch, and I enjoy them!

 

[Sand_Fox]

Wow 60%. Interested in VII Remake results regarding the digital physical split, it's probably close to this since both game came out really close to each other.

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The CEO of Square Enix mentioned in a recent interview that the digital sales for FF7R was between 40% and 50%, the highest they ever had.

Square's financial report for Q1 will be public tomorrow, hopefully we'll get more details then.

 

[Pancakes R Us]

they really would like to ask.

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Hah.

 

[IIFloodyII]

PS having the same digital split for RE3 as PC is surprising. As is PC only being 35%, I'd have thought pretty much everything on PC would be like 90%+ digital, vs other platforms probably 50-60%, to the point where I think I'm misreading it or they are rounding up/down a bit.

 

[Dust]

Why are so stingy with that MH Switch title, I really hope they will show it at TGS.

 

[Hamster Plugin]

PS having the same digital split for RE3 as PC is surprising. As is PC only being 35%, I'd have thought pretty much everything on PC would be like 90%+ digital, to the point where I think I'm misreading it.

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It's not the digital share on platforms. It means that 35% of all digital copies are sold on Playstation and another 35% of all digital copies are sold on PC.

 

[sfortunato]

The breakdown of platforms is generally PlayStation 35%, PC 35%, Xbox 15%, and Nintendo 15%.

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Pretty astonishing considering Switch has no big new releases from Capcom and all sales are coming from catalogue titles.

 

[Raigor]

PS having the same digital split for RE3 as PC is surprising. As is PC only being 35%, I'd have thought pretty much everything on PC would be like 90%+ digital, vs other platforms probably 50-60%, to the point where I think I'm misreading it or they are rounding up/down a bit.

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It's not about RE3.

The total digital sales for all Capcom games are splitted like that, meaning that if they sold 10 million digital games in the FY (for example)

3.5 million came from PSN
3.5 million came from PC/Steam
1.5 million came from Xbox
1.5 million came from NSW eShop

 

[IIFloodyII]

It's not the digital share on platforms. It means that 35% of all digital copies are sold on Playstation and another 35% of all digital copies are sold on PC.

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Yeah I kinda figured it was probably that after posting, but makes alot more sense. Though even that is still pretty surprising given what the platforms average share is, though I guess Covid probably explains that, as PS is probably selling much more digitally than it would otherwises, whereas PC is just selling the same.

 

[IIFloodyII]

It's not about RE3.

The total digital sales for all Capcom games are splitted like that, meaning that if they sold 10 million digital games in the FY (for example)

3.5 million came from PSN
3.5 million came from PC/Steam
1.5 million came from Xbox
1.5 million came from NSW eShop

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Oh fuck, it is, RE3 isn't even on Switch, so the regional breakdown is separate from the splits.

 

[Spiegel]

It's not about RE3.

The total digital sales for all Capcom games are splitted like that, meaning that if they sold 10 million digital games in the FY (for example)

3.5 million came from PSN
3.5 million came from PC/Steam
1.5 million came from Xbox
1.5 million came from NSW eShop

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Using numbers from this quarter

Total digital in Q1: 7.35M
Resident Evil 3 digital: 1.62M

PSN/Steam: ~2.57M (each)
Xbox/eShop: ~1.10M (each)

 

[ggx2ac]

Bump

 

[Naga]

English Q&A is up:

Quarterly Reports (Japan GAAP) |Reports and Materials | CAPCOM

Capcom's financial results, presentation materials, question and answer summary.

www.capcom.co.jp

 

[ggx2ac]

OP has been updated with the English transcript.

 

[808s & Villainy]

Wtf do Nintendo fans have to do at this point to get real support? I feel like it's a catch-22. Support old ports and that's all Capcom releases or don't support them and Capcom thinks there's no audience for anything

 

[Fisty]

Digital copy share of PS4 same as PC? Interesting

 

[Trim]

Wtf do Nintendo fans have to do at this point to get real support? I feel like it's a catch-22. Support old ports and that's all Capcom releases or don't support them and Capcom thinks there's no audience for anything

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They have to ask Nintendo to do a better job as a manufacturer to meet Capcom's expectations.

If they continue to not do that (lackluster online, hardware too different and weak compared to Sony and MS, ect) this situation will continue, sales (Switch, Wii) or not (Wiiu, GameCube).

 

[808s & Villainy]

They have to ask Nintendo to do a better job as a manufacturer to meet Capcom's expectations.

If they continue to not do that (lackluster online, hardware too different and weak compared to Sony and MS, ect) this situation will continue, sales (Switch, Wii) or not (Wiiu, GameCube).

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So basically unless Nintendo makes a machine that directly competes with Sony and MS then, despite them producing the same revenue for Capcom with old ports as Xbox does, it's not worth the effort porting? How does this make sense? Also what Capcom games wouldn't be supported using Nintendo online? MHW doesn't have any special features. The RE games are single player...

 

[Naga]

So basically unless Nintendo makes a machine that directly competes with Sony and MS then, despite them producing the same revenue for Capcom with old ports as Xbox does, it's not worth the effort porting? How does this make sense? Also what Capcom games wouldn't be supported using Nintendo online? MHW doesn't have any special features. The RE games are single player...

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Which doesn't make much sense considering that their 3DS support was fantastic, and that most games (that aren't RE Engine) can run on Switch. And that Nintendo followed Capcom HW recommendations before releasing the Switch.

It's just a different strategy at the moment, but not a matter of "will never happen unless they have a PS/Xbox-like console" yeah.

 

[Neoxon]

So basically unless Nintendo makes a machine that directly competes with Sony and MS then, despite them producing the same revenue for Capcom with old ports as Xbox does, it's not worth the effort porting? How does this make sense? Also what Capcom games wouldn't be supported using Nintendo online? MHW doesn't have any special features. The RE games are single player...

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MHW is a PlayStation console exclusive in Asian markets, & most of their other recent games are on the RE Engine. Until said engine becomes compatible with the Switch, I wouldn't expect much as far as new games go (especially given that they're doubling down on next-gen so soon).

 

[logash]

So basically unless Nintendo makes a machine that directly competes with Sony and MS then, despite them producing the same revenue for Capcom with old ports as Xbox does, it's not worth the effort porting? How does this make sense? Also what Capcom games wouldn't be supported using Nintendo online? MHW doesn't have any special features. The RE games are single player...

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It's about investment right? Essentially Capcom can make the same game for 3 different platforms with little investment but Switch ports require more work. While I am sure they will make their money back, the question is how much profit would they make. The Witcher 3 suggest that it would be significant but I really do think that people underestimate how hard it is to port down. The RE engine is not the REDengine and we have no idea if it's even possible to port it down. Capcom isn't the only one not making Switch games. Most major third party devs are making old console ports for the system. The only other option is to make a game unique to the Switch which I think is even more risky since it potentially will only release on the Switch. I wonder if making a game from the ground up for the switch and porting it up to other platforms would be a better option.

 

[cw_sasuke]

Wtf do Nintendo fans have to do at this point to get real support? I feel like it's a catch-22. Support old ports and that's all Capcom releases or don't support them and Capcom thinks there's no audience for anything

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I don't see what Nintendo fans have to do with this u less you think Capcoms current gen games would miss Switch if it was as powerful as the other systems.

Games take 3-4 years of development and planning on the AAA level - retro fitting them to fit the Switch when they also had to adapt and prepare for the higher scale with PS4 pro, One X and PC wasnt viable.

 

[Deleted member 69501]

Random and somewhat related question. Where are the fun Capcom switch games? Have they released anything interesting this gen ?

 

[Trim]

So basically unless Nintendo makes a machine that directly competes with Sony and MS then, despite them producing the same revenue for Capcom with old ports as Xbox does, it's not worth the effort porting? How does this make sense? Also what Capcom games wouldn't be supported using Nintendo online? MHW doesn't have any special features. The RE games are single player...

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It's not just Capcom not giving real support to the Switch. Almost every third party is doing the same thing.

At one point you have to question the manufacturer's job.

 

[NDA-Man]

RE3 price measures:

Q: Tell me how Resident Evil 3 has been received, and what pricing strategies there are for the future.

A: With reference to sales trends for the original Resident Evil 3: Nemesis as well, results have not especially deviated from our internal sales plan. Looking ahead, we will consider pricing strategies targeting the holiday season, starting in autumn and running to the end of the year.

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Seems they expected it to do less than RE2R from the getgo.

 

[SuperFakerBros]

It's not just Capcom not giving real support to the Switch. Almost every third party is doing the same thing.

At one point you have to question the manufacturer's job.

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Considering that there was no expectation for most other 3rd party publishers to do so while there was for Capcom, it's a little different here. Never mind that publishers that previously wouldn't or haven't given Nintendo the time of day before, like Bethesda and CD Projekt Red, have offered support for their higher end games

Companies don't always necessarily make the most sensible decisions

 

[Hero of Legend]

Random and somewhat related question. Where are the fun Capcom switch games? Have they released anything interesting this gen ?

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Okami is probably the best thing they put out on Switch if I had to pick one. Hell some(?) consider it to be the definitive edition as it has motion control painting in docked mode and touch painting in portable mode. Plus performance-wise it's basically as good as it could be IIRC?

Dragon's Dogma was also very well ported by Q-LOC who did the PS4 and XBO versions as well.

Devil May Cry 3 on Switch may also be the definitive edition as it has exclusive weapon-switching and co-op was it?

Resident Evil 5, 6, and both Revelations ports have gyro aiming and were all ported internally by Capcom. They're not perfect, but seemingly get the job done. Rev 2 is chunky at over 20GB though.

Capcom wasn't short on ports, just short on new titles. They only recent games they brought were Monster Hunter Generations Ultimate, Mega Man 11 (day 1), and Shinsekai. A minor nitpick, but the god awful scaling of the HUD in MHGU in docked mode killed my hype for it.

 

[Gilver]

Im going to pick up RE3 when its $20 bucks which should be soon as per the Capcom mo

 

[Hero of Legend]

Considering that there was no expectation for most other 3rd party publishers to do so while there was for Capcom, it's a little different here. Never mind that publishers that previously wouldn't or haven't given Nintendo the time of day before, like Bethesda and CD Projekt Red, have offered support for their higher end games

Companies don't always necessarily make the most sensible decisions

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I find it so bizarre that in a world where we got games like Doom 2016 and ESPECIALLY The Witcher 3 on Switch, Capcom can't be arsed to port MHW to Switch. Hell even Iron Galaxy offered to do just that.