News Article

Capcom Expects A Significant Decline in Packaged Games Come 2017

Posted by Andy Green

Will be focusing more on digital

Capcom has predicted a significant fall in its packaged game sales come 2017, but believes other areas of its business will help make up for the drop in revenue.

In its annual report the Japanese giant revealed it shipped 14 million units overall in the 12 months ending 31st March 2013, with North America being its largest market, making up for 38 percent of all sales. Japan was the second biggest market with 32 percent, Europe came third with 26 percent, while 4 percent of all boxed copies were sold in Asia.

However, after analysing the consumer market by platform, Capcom said it expects to see a "severe contraction" in the packaged game market, claiming it will drop by a significant 28.8 percent compared to 2012, representing $5.3 billion.

However, the company forecast strong growth in the downloadable content market, which will jump by a staggering 109.9 percent from 2012, an extra $7.8 billion. Unsurprisingly, Capcom said it would be allocating management resources to DLC within the consumer market "to ensure sufficient earnings".

Currently, DLC is 11.3 percent of Capcom’s business and the firm is looking to increase that figure to strengthen its digital strategy. According to the report, DLC now accounts for 27.8 percent of the consumer market and the company sees plenty of merit in boosting production in this area. Firstly, it states the reduced production costs of digital distribution and the ability to avoid inventory risks are attractive in the current environment, while "the ability to realise long-term, stable additional sales by capturing users with the ongoing distribution of DLC" is another plus.

It went on to say it will be providing additional content strategically after the launch of major titles like Resident Evil and Street Fighter to lengthen the product's lifecycle and will also expand download only titles such as Dungeons & Dragons: Chronicles of Mystara.

There are signs that Capcom already has the wheels in motion as Phoenix Wright: Ace Attorney - Dual Destinies is being released in North America and Europe as a downloadable only title, while its predecessors were all packaged. The company clearly sees value in the distribution of digital content as it reduces production costs and shortens the time needed to localise.

Meanwhile, the firm said it would be migrating DLC development in-house to counteract a number of quality issues that have arisen in using overseas development companies. It said since announcing its intention to move work abroad in 2009, there has been "a notable trend towards polarization among overseas development companies in response to considerable technological innovations in the market".

It explained that some companies like Blue Castle Games, which was acquired by Capcom in 2010 and is now simply known as Capcom Vancouver, were able to develop hit titles, but others were plagued by quality issues and frequent delays.

Migrating development in-house allows us to use our accumulated expertise to improve quality and strictly enforce schedules while creating a mechanism enabling development and marketing departments to respond to digital advances in an aim to increase the proportion of DLC and improve profitability.

Based on this annual report it looks like we'll be seeing a lot more downloadable software and additional content from Capcom in the years to come, while its packaged offerings may become less prominent.

Do you think packaged games will still be going strong in 2017 or are Capcom correct to shift some focus to its DLC operations? Let us know your thoughts in the comment section below.


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User Comments (59)



Funny_Moblin said:

Well, I always try to get physical copies of games no matter what...and still, physical games will always still be around because there's always the collector games such as Super Mario All-Stars.



pepsiplunge said:

This would be devastating news if it were 6th gen capcom.
The only capcom games that I'm interested in are ace attorney and monster hunter.
Still, I hope this doesn't become the standard in the future.



unrandomsam said:

I would be interested in a Megaman ZX compilation for 3DS.

Or the rebalanced currently Jap only PSP version of Ultimate Ghosts and Goblins for 3DS.

I liked the first Bionic Commando Rearmed but Capcom worked to destroy the people behind that.



Macarony64 said:

Has long that I find my physical copy I don't care but if they go all digital no matter who I wont buy.



Undead_terror said:

My last Capcom game was RE:TM3D, got it digital but that's because at the time I couldn't find it anywhere cheaper, but I won't support them if the are being cheap and crappy.



bezerker99 said:

/me hugs his physical copy of CAPCOM's Monster Hunter 3 Ultimate.
/me hugs it foreverrrr and everrrrr....



Einherjar said:

As long as Capcom focuses on doing jack squad with its mayor IPs, it doesnt matter if these are digital of physical, eitherway, they are non-existant. Like many of us predicted, the collaboration with Nintendo brought us Nintendo themed costumes in MH4. Not the worst thiung that could have happend, but considering capcom history and backlog, its more than idsappointing.
The simple reason why they arent making the money they used to make is, that their games are getting worse franchise after franchise. Even if they come up with a fresh IP like Dragons Dogma, which was an incredible blend between Monster Hunter and Western open world RPGs with a touch of japanese game design, it was quickly littered with micro transactions, a quasi sequel that was just the same game again with a small Add on. Or the Street Fighter 4 thing. The first updated version simply felt like a love letter to fans. Many things fans asked for were included, the game was tinkered after wishes and sugustions and was beefed up enough to justify a rerelease with a reduced price. Then it was said that they wont make another one...and another one came...and THEN they WONT make another one...aaaaand another one is planned.
They are walking in place, sitting in the few lorels they have earned, deaf and stubborn towards their fandom in recent times and expect people to buy their games ?
The solution isnt to reduce physical copys of games, the solution would be to listen to the people that are asking for decades for a game you announced and then canceled and NOT to release westernized games that meet hate and disgust as soon as they are announced but still get made anyways. I dont see the logic behind that.



Bass_X0 said:

Many things fans asked for were included, the game was tinkered after wishes and sugustions and was beefed up enough to justify a rerelease with a reduced price. Then it was said that they wont make another one...and another one came...and THEN they WONT make another one...aaaaand another one is planned.

Its off-disc DLC. You know, the thing that people demanded they wanted after the on-disc DLC debacle with Street Fighter X Tekken? Super SFIV was a major sequel. Arcade Edition and Ultra are minor low-cost updates. There's a huge difference.

The fighting game community keep demanding more characters to be added and Capcom keeps giving in. If they don't give in, the fans will continue to demand for more characters. And Capcom can hear us doing so.

As long as Capcom focuses on doing jack squad with its mayor IPs,


the solution would be to listen to the people that are asking for decades for a game you announced and then canceled and NOT to release westernized games that meet hate and disgust as soon as they are announced but still get made anyways. I dont see the logic behind that.

Games being announced then cancelled or not being released outside of Japan is nothing new. Its been going on for decades. Those of us who have been gaming since the early nineties are used to it by now.



Tasuki said:

Well looks like MHU3 will be my last purchase from Crapcom.

@TBD: Couldn't have said it better myself.



bezerker99 said:

@unrandomsam I wouldn't expect anytime soon. They had the online servers up for 3 years for MHT. The main reason, I thought, they shut them down was to promote and get people to buy MH3U.



unrandomsam said:

(e.g making it so you need all the DLC to use online and just adding it bit at a time every few months.)



Intrepid said:

If Capcom expects a decline in physical, they can also expect a decline in sales.

Seriously, I'm done with the company.



unrandomsam said:

The back catalog is what I want (CPS1/CPS2)

3 Wonders
1944: The Loop Master

(Probably loads of others I don't know about but it needs to be better quality emulation than Dungeons and Dragons).



Corleonis88 said:

if they cut down the price of retail games by making them for the eshop only, then bring it on.



Yosher said:

I'll always, ALWAYS be getting the physical copy of a game so long as it's available. Screw the future of digital only games. I think it's bad enough they stopped making proper manuals.



Captain_Gonru said:

@Funny_Moblin While I'm with you on physical copies, the notion that they'll "always be around" presupposes that systems will always exist that accept a physical medium of some type. If the next generation of consoles is digital distribution only, then there would be object to buy in a store, thus no "collectors edition" of anything.



DarkLloyd said:

A few things will happen if they cease packaging the decisions will vary for me.

1: i stop buying the games

2: i will not buy at full price only when they are dirt cheap which likely take too long so refere to number 1

3: still thinking but its not in favor of the companies that try pulling this



LordsOfSkulls said:

Not buying the new Ace Attorney cause it Digital.

Bye bye capcom >.> i cant wait to see you guys go bankrupt so that smart companies can actually take over the IPs that we love and do them correctly. I hope you become THQ



Funny_Moblin said:

@Captain_Gonru Oh, you are right. Of course. A recent example would be the Ganondorf WW HD figure. Yes, I truly value physical games and I have very good memories, but if Nintendo decides to tie games to accounts rather than the system itself, then I'll immediately go digital.



Ren said:

2017? wow, do they realize that's in 4 years? If it's that long they'll be the last ones doing it. Geez you guys, might as well call it Y'all sure love your consumer trophy trinkets. They'll make good shanties one day, just imagine the value of a home made from all the E.T. carts should someone dig them up.



shinokami said:

I been done with Capcom since Mega Man's cancellation and the stupid teasers they pulled out with UMvC3 and the spit to the face with SF x Tekken.

Personally I was looking forward to AA5 but being digital only I will have to be forced to wait for a price drop or a special just in case the game doesn't deliver. The only way Capcom can earn my trust again is by either making MMZX3 or Starforce for the 3DS



Bass_X0 said:

Have you even actually played SF X Tekken, shinokami?

Or you just jumping aboard the hate train about a game you never played?

Even if you have, no doubt you will bring up Gems - something I've never downloaded or would have used if they were all already included.

On-disc characters? Sure I got them but then I'd have gotten a sequel anyway. Doesn't matter to me how the content I wanted and was willing to pay for was delivered.

A spit in the face? Not my face.



ultrakatie64 said:

I'd rather not play games at all then lose physical releases. I want to be able to go back and play games from ten, fifteen, twenty years ago. Running the risk of losing my games due to hard drive crash andor the PSN, eShop, or Xbox Market not being around any more is a real danger.

Video games are not sold like books. I've already gone completely digital with books because somewhere my favorite books will be available on an online store. Same thing with movies and music. Amazon, BN, Google. There will always be some place out there that sells what I am looking for. PC gamers have it good because they can choose from Amazon or Steam and will most likely have more options in the future. Console games need to stick to physical release until this problem is sorted out.



Vincent294 said:

Makes sense. Too much unneeded DLC is bad, a few bigger packs that add notable stuff & new games every couple years are plenty. If digital games have good manuals (crap, even 3DS games have some on-cartridge manuals that are nice) then I wouldn't mind getting them. I have a few on my 3DS & Xbox 360, though I generally stick w/ retail copies. But by 2017, who know what will happen?



Relias said:

Capcom says it's going digital next generation.. wow.. (I fully expected next gen to be pretty much digital anyway) that being said.. out of curiosity... how many people bought Duck Tales, Street Fighters, and Dungeons and Dragons.. somehow I don't see Capcom going anywhere.. ( And I know a lot of people on this site will probably be getting MH4)


Capcom.. we still like our retail boxes.. you are going to miss out on sales from Ace Attorney do to that... we do not care about how you see the digital future really.. especially since it's more than likely.. consoles will for the most part be gone.. by 2017... if not the 2020's but until that time we like our boxed games.. and expect them.. so naturally... as with all companies that get to big for their britches..

What we have here is a failure to communicate...



IKAY said:

When I buy a digital game, where does the smell of a new game comes from? A dispenser inside my gaming console?

Say no to download games! (Apart from those available that way only.)



Sam_Loser2 said:

I want physical copies whenever possible. The push for digital keeps making me nervous because it would seem they want to push physical copies out.



Freakazoid said:

I predict an unfortunate future for gamers, were console games will become the likes of smartphone games....



edhe said:

Until I can personally trade or re-sell a digital game, I will never embrace a download only home console.

And if not, then they'll have to have deals as enticing as Steam does, or gaming is going to get very expensive.



Deathgaze said:

Not physical = no sale from me. Digital is rubbish. I rather own my game, not have a licence to run some code.



Deathgaze said:

@IKAY No, say "no" to digital full stop. You're just encouraging publishers to skip physical copies all together. I've refused to purchase every digital game ever. It's hard but put your money where your mouth is.



Vader_MIB said:

Just to share my very recent experience regarding digital. Yesterday, i played Dragon's Crown on my Vita, which memory card contains saves from hard copies of games but also several digitally bought titles. In my evening commute by bus, my memory card just crashed. Vita was ignoring it or restarting every 5 minutes saying memory card was removed... So I lost my saves and digitally bought games. For the games, it is OK. They are linked to my Sony account.
But what if my 3DS dies and i cannot transfer the games (because they are linked to a system, not an account)...? Lost. Money lost, time lost...
So i was quite reluctant to buy digital copies, but i did following several very interesting deals and wanting some games like Friday Monsters. Now, I will do only for very cheap games, most probably on phones. For the rest, either hard copy, or too bad for the editor, but no game. I want Ace Attorney, but i won't buy it. Simple. Too much torture for the customer.



Shambo said:

I really dislike this all-digital stuff... Why, if Alone in the dark 4 could be released on GBC, PS1 & PS2 all boxed, all good versions for their respective system's capabilities, do people buy this? "Boxed is too expensive" from a major publisher, "can't port a (console x) game properly to (console y) because of (silly excuse z)"...
They're all losing my respect, and if Valiant Hearts doesn't come to Wii U, preferably retail, so will Ubisoft once again. I loved their good run so far, don't throw it away out of laziness (I can't think of any other even remotely reasonable reason to justify it skipping Wii U. Sure, it has two screens. Make them do the same, or add a quick way to check story, diaries, letters,...)



Ren said:

GOING to GET expensive?! Gaming is a ridiculously expensive hobby already and has been for a long time. Digital releases, MIGHT relieve that eventually but right now theres still a lot of differentiation between 'digital only' releases and 'retail digital' releases so the retail stuff is arbitrarily super expensive still but it'll go down when that distinction fades.
There is no better special guarantee with digital book stores over game stores that makes them safer. I understand the arguments here but ultimately we have to embrace a system that is just inevitable. Most consumers want good product and that's all, not a hunk to hold onto, game products are an experience not a block of plastic.
There is the real possibilty of games disappearing when a console does because of this but not any more than an out of print book copy (especially digital), or an unarchived film (lots of cheesy but 'important' films already dissapearing just from the VHS era heap of B-movies). There is not a perfect clear answer to the possibilty of losing things to poor archiving but that is just the way of the world. We show our support for the things we love and try to make it work with the current system. No publisher/ creator 'owes' us any special system, they do what they can to archive while running a business. DL content and full experiences is not just 'the future' it's now. theres no cheaper easier way to deliver now, why would any smart company NOT do it? As it matures it will get better and there will be better and better ways to archive materials digitally than holding on to a bunch of broken old consoles and scratched up discs.



Genesaur said:

I really hope we still get a hard copy of Monster Hunter 4, assuming there'll be a North American release of the game at all.



Snkfiend said:

Oh well then I already stated my goodbyes years ago and my opinions that I don't like Crapcom after the fiasco of Breath of Fire 4......and every great titles/series I grew up on they killed off so why should I give a flying care about them going digital.



DarkKirby said:

If you can get people to accept digital only and pay nearly the same price than of course the publisher is happy, as they make more money with less risk and nearly no distribution cost.

That said their decision on Phoenix Wright is extortion and Nintendo's console based rather than account based eShop is terrible.



Peach64 said:

People made the same fuss about music and books, saying they wanted stuff on their shelf, but digital will take over, as the advantages outweigh the drawbacks by far, for consumers and publishers. This is one of the biggest obstacles Nintendo faces, as it's far less appealing to buy their digital content than on either of the rival systems until they sort out a proper account system.

It does make me laugh that people on here say any owner of non-Nintendo systems must prefer graphics over gameplay, but then they're making their decision on wether or not to buy a game based on wether it comes in a box for them to look at.



SuperPeach said:

The day that games go completely digital is the day that I quit video games (or embrace other means).
Phoenix wright is an insta-buy for me but without a real copy in my hands I guess I'll never play another ace attorney game... Or even monster hunter for that matter.



JuanitoShet said:

Well, that's Capcom's case. They have a plan, and they're sticking with it. If they feel it's what's best for business, then they shouod go ahead with it.

Though they do have some of their fanbases's disapproval, it seems. I've never been a close Capcom follower, so this doesn't really have any importance to me.



Ren said:

@Peach64 very well said, thank you. It's clear this vocal minority is comprised largely Nintendo fans who are predominantly very young, idealistic and nostalgic. Few people are actually crying out in outrage over not having to deal with old physical discs anymore.
Maybe I'm alone here, but I shed no tears over losing access to the movie boxes with cool production stills and write ups on the back that drove many of our decisions of what movies to rent back in the day, and I'm not worried about any big films disappearing forever or even smaller ones. If the interest is there they will be available. Emulation is not just the realm of hackers anymore.



Bass_X0 said:

But what if my 3DS dies and i cannot transfer the games (because they are linked to a system, not an account)...? Lost. Money lost, time lost...

My 3DS died so I sent it to be repaired and it came back working just fine with all my downloaded games. Quit making crap up.

The only real issue is if you physically lose your 3DS or its crushed into tiny pieces.



Snkfiend said:

All I can say is Crapcom has 152 million "ONLY" in the bank how screwed are they? This is a sad times for them for the next gen of consoles and I wish Crapcom would be more involved with Nintendo too and stop being biased over porting BS games like SF and be more involved in their 20% of their fanbase rather further pissing them off.



LordGeovanni said:


I have had the same sort of problems getting my games back. Don't assume that just YOUR experience is enough to justify calling another experience as a lie. I am already on my 4th 3DS and I keep buying them because I like Nintendo and the system. I DON'T like download after the time that I really got screwed.

The bigger problem is that Capcom is pushing for download-only while there are still a lot of people who say that they do not want that. Unfortunately, it is not like there will be another 2013 E3 Sony reveal to put this stupid practice in its place. In fact, all of the companies are heading into this direction and I will NOT be surprise when an insider (company worker) finds a way to pirate the games and it gets "leaked" somehow. Digital download allows less ways to prevent piracy after all...

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