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Capcom Q2 Fiscal Report 2018 Results and Updated Platinum Page ( MVCI 900K )

famikon

famikon

Banned
Oct 25, 2017
4,604
ベラルーシ
Umibozu said:
It can be related to market perception of their health, expectations of dividends, or speculation from investors. Stock price does not mean their business is healthy.
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Capcom is profitable, and net sales and profit are up YoY. This is basically all you need to know.

In addition, MHW is a good chance to grow IP – another reason why investors are happy.
 
Saint-14

Saint-14

Banned
Nov 2, 2017
14,477
Umibozu said:
It can be related to market perception of their health, expectations of dividends, or speculation from investors. Stock price does not mean their business is healthy.
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Eh, can't you use this argument for any company out there? I wonder where all the Activision is doomed comments are.
 
OP
OP
Ryuichi Naruhodo

Ryuichi Naruhodo

Member
Oct 25, 2017
1,511
Capcom posted the Q&A in the Japanese version of their website , Looks like investors had a lot of Questions this time

http://www.capcom.co.jp/ir/data/explanation.html

Here is a Google translated Version

Regarding "Marvel VS. Capcom: Infinite", I would like to ask about the achievement accuracy of 2 million full-term plans based on the current sell-through.
The first half results are progressing on the assumption line against the plan. In addition to distributing additional characters, we will aim to achieve full-year plans by promoting in line with Thanksgiving and New Year's holiday season.

In the first half, how much did the cost of "Marvel VS. Capcom: Infinite" be recorded?
We do not mention detailed figures, but as for cost accounting of development costs, we are trying to follow the principle of accounting and make it the same timing as sales. We allocate the development cost proportionally according to the number of sales for the lifetime, so we account for 900,000 pieces sold in the first half of the total development cost.

Please tell me about "Monster Hunter: World" at the moment.
We have earned high praise at Tokyo Game Show and other exhibitions around the world, and we recognize that user satisfaction is high. From now on, we will try to maximize sales by proactively developing promotional measures not only in the Japanese market but also in the European and American markets.

Please tell me about the progress on mobile licensing projects posted in the first quarter and the future licensing projects.
There is nothing we can tell at the moment. We will inform you at any time as we can announce it.

I would like to ask about the breakdown by sub-segment about 2.7 billion yen increase in digital contents as compared with the same period last year.
About 2.7 billion yen, about half constitute consumers, the rest consists of mobile and PC online.

I would like to ask about expectations for Nintendo Switch and how to deal with the same hardware.
I think that the strong performance of Nintendo Switch is a very pleasing thing to impress the presence of deferred hardware. We will respond to the same hardware based on our basic strategy of multi platform. We also need to consider how to make use of different hard characteristics from other stationary machines.

In recent years the number of medium and small titles has decreased, but how about allocating resources not only for AAA titles but also for medium and small type titles? Also, is resource allocation appropriate in the development system?
We are also investing in small and medium type titles in parallel, and development of undisclosed titles is progressing at this time. Regarding the allocation of development resources, we have adopted over 100 graduates each year, and maintaining a high occupancy rate by newly arranging while identifying suitability.

I would like to ask about the influence of the revision of the regulations on pachislot machines after Unit 5.9 on future results.
At present, there is uncertainty about the market environment, and it is expected that it will become even more severe by the rule revision in February next year. Although we are conducting various simulations to respond flexibly, it is necessary to consider factors including a factor of 10 trillion yen, as well as factors other than changing the conforming rules, so judge only at the present moment I think that it is too early to do. We are already conforming to the two models planned to be introduced in the second half of the year and we will measure the timing of the proper introduction in order to maximize the sales volume.

Regarding amusement facility business, sales increased continuously over the previous term, but I would like to ask about current situation and future prospects.
As a result of contributions by popular prizes including specific characters, mainly to shopping center type stores, sales and profits increased compared with the previous fiscal year. Although the effect of the increase in customer unit price due to the revision of wind regulation law in the previous term went through in full in July, existing stores are still higher than the same period of the previous year, and we believe that the market environment will continue to be steadily continuing.

Regarding the development cost of consumers, if it is difficult to amortize by title sales, will eventually be treated for impairment?
If it is judged that it is difficult to write off, processing such as impairment is an option. We have not talked specifically on the criteria, but we have set up a response in consultation with the audit firm every quarter.

Will in-game billing be implemented in "Monster Hunter: World"?
There is nothing to tell to other than the information released at the present time.

I would like to ask about the efforts to make PC online into profitability and growth.
As PC market growth is slowing down, it is our policy to prioritize consumer and mobile growth. Regarding PC online, we aim to maintain sales of "Dragons Dogma Online" and "Monster Hunter Frontier", and aim for a profit by cutting costs etc.

Can you release two models scheduled for the second half in pachislot?
Two models planned to be sold by our company have been approved for conformity.

e I would like to know the income and the cost related to sports.
In general, income includes licensing income in licensing incidents, video rights fee as event organizer, entrance fee income, etc. Meanwhile, there are cost as opening costs accompanying the event organizing.

Please tell me about the future profit image of e sports.
Currently, we are considering commercialization from various angles, such as utilization as a promotion and earning as an event operator, and we have not decided on specific revenue targets at the moment.

In the mobile business, what know-how of planning, development, and management is lacking?
The know-how of planning, development and management should be considered together, and we recognize that there is room for improvement comprehensively at the present moment.

In collaboration of mobile, I would like to ask the medium- to long-term policy.
We will pursue all possibilities without imposing restrictions on measures, including promoting our own development, as well as collaborating with other companies, as our previous strategy. We aim to introduce high-quality content that is supported by the market.

From now on, it is considered technically possible to develop the same content without the barriers of mobile, consumer and PC, but is the development and collaboration system in place?
Currently, developers are engaged in title development without platform boundaries, and there are cases where developers belonging to the consumer division develop mobile titles.
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Lots of Mobile and E-sports Questions

I guess it will be a couple of few hours until it is Probably translated
 
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Rainrir

Rainrir

Attempted to circumvent ban with alt account
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Oct 25, 2017
1,337
famikon said:
Stock price increase shows exactly the opposite, no matter how you spin it.
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I am not in the "Capcom is doomed" camp, but stock price is increases is due to investors building in expectations that things will "get better" and not so much things are fine "right now". In general, stock is not overpriced due to investors overestimating current performance (which you can't if you even look at the reports in any capacity), but due to investors overestimating the future potential (this is why asking "Is Amazon overpriced?" is the fastest way to start an endless flame war on stock speculation discussions)

To talk about the mobile example, the investors price Capcom higher not because Capcom is now doing well in that space right now or even its past strategy is sensible, but rather Capcom's statement went from "We are currently look for partners to license our IPs and provide mobile content to the market" (Last Year) to "We are now working with our partners to introduce our mobile content to various regional market" (This Year)

To investors at this stage of time, this represents a progress in the strategy that Capcom management choose to pursue. Investors don't really know if this strategy is better, if it will even work, or Capcom management can even execute it competently. It just represents some (somewhat) blind optimism that Capcom has progressed with its strategy and "this time it will be different" (from their past mobile efforts).

In their report, Capcom also
  • promised to sell far more software (which they may or may not),
  • said that the Pachislot/Pachinko market has stabilized (even though they released a bomb)
  • said the amusement business has started to recover (after brutal contraction in the past years)
  • expand the OTHER BUSINESS (licensing/e-sports) segment, in which they earn 40% margin (crazy relatively to their other segments). This is why Megaman's corpse was dragged out at TGS.
  • Going to cost cut (which means even more stretched development ability)
So you can see as whole this are all aspirational goals and/or positive market conditions, and the investors price the stock based on what Capcom can do in the future. In fact a big stock adjustment upward usually means people expect a drastic improvement, which only means that the company is starting from a low base (from max potential), or an inauspicious current position (think Wii U Nintendo to Switch Nintendo). Real test is if Capcom delivers on its promises by the end of FY and beyond.

Note that Nomura Securities, who gave Capcom a "BUY" rating and an increase in target stock price has this to say of Capcom.
Nomura Securities via Takahashi Mochizuki said:
野村證券：ゲーム業界ではE-sports、MOBA、基本無料型のオンラインゲームやお裾分けなど、開発力が高くオンラインバトルに適したコンテンツを保有するカプコンにとってはポジティブな流れが続くだろう。一方、会社としては運営力にを感じているとのこと、再評価にはまだ足りない。
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Translation said:
In an online game industry is basically divided between E-spots title, MOBA games, and Free-to-Play games, Nomura continues to have a positive outlook on Capcom, a compay that combines high development capability, and possessing content suited for competitive online play, On the other hand, with regards to the the management/operations of the company, it is not yet enough to warrant a reassessment.
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A recommendation to buy and a price upgrade does not mean Nomura thinks Capcom's management is OK, but just the view that that Capcom has future potential from its current state.
 
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