News Article

Capcom Investing $80 Million in Two New R & D Buildings

Posted by Thomas Whitehead

All part of boosting internal development

Capcom may have enjoyed another smash hit with Monster Hunter 4 in Japan, with hopes of the Ultimate release achieving success worldwide, but it's had a hit-and-miss period in other areas. Just recently the company cut its profit projections by 50%, citing investment, an underperforming mobile sector and disappointing sales of Monster Hunter Frontier G as factors.

While still turning a profit, the company is keen to make changes to improve its long term prospects. In 2013 it announced its intention to rely far less on outsourcing development and to focus more projects in-house, and has now confirmed a major investment to facilitate that change. Two new R & D buildings are now under construction, with a cost of ¥8 billion (approximately $80m) between them. These buildings will include sound studios and motion-capture facilities, with Capcom issuing the following statement.

Capcom has been focusing resources on strategic and growing areas under a policy of selection and concentration in order to operate with speed and flexibility.

Constructing these new R&D buildings will make game development operations more efficient by centralising these operations and upgrading speed and control.

The company is also expanding its internal development staff by around 100 per year, with an end goal of 2,500 internal developers by March 2022.

[via gamesindustry.biz]

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User Comments (36)

TheRealThanos

#1

TheRealThanos said:

Wow, that is a big investment for a company that was recently estimated to have only $150 million left in the bank. Hope for them and the employees that things will take a turn for the better.

Gamer83

#5

Gamer83 said:

How utterly stupid. A company that has no money spending more of it. What Capcom should be doing with all its games right now is signing deals like it did with MS for Dead Rising 3. Sucks for people who own a certain console and want to play a certain game but at this point Capcom has f'ed itself so bad that that is what it needs to be doing. Not spending money it doesn't have on new R&D buildings. Reminds me of Sony spending money it doesn't have on useless stuff like VR. If you're going to run your company into the ground at least do it chasing something that makes sense.

Deathgaze

#6

Deathgaze said:

Good on them. I've been very upset with Capcom throughout the whole PS3/Wii gen up til now. I also hate it when Japanese publishers outsource to Westerns, so good news all round it seems.

Ninhau

#8

Ninhau said:

they finally figured out that they cant be milking the same stuff every year

Ninhau

#9

Ninhau said:

@Gamer83
R&D stand for Reasearch & Development... you know, the kind of activity that brought us Dead Rising, Resident Evil, Street Fighter etc... in the first place.

unfortunately, its the same mentality as yours that put Capcom in the tight spot. Leaning back and milk the same old same old franchises will kill Capcom in the medium run. Guess you dont care, though

sikthvash

#10

sikthvash said:

Capcom's name, to me at least, is no longer synonymous with quality and fun as it used to be. Sure, they still can make great games, but I fear their reputation has taken a tumble with a few stinky sequels and the DLC handling. Hopefully they will re-kindle the love from fans with some new IPs, a fresh Street Fighter experience and maybe a few nods and winks to the good old days of Ghost n Goblins

Chomposaur

#11

Chomposaur said:

Counting down the days until megaman IP gets sold to nintendo or back in the hands of Inafune

The MH4 money they invested in the smartphone marked bombed they lost millions

I predict Capcom will go bust this generation

jillsand

#12

jillsand said:

@TheRealThanos That 152 million in the bank thing is so annoying. You kids repeat it over and over but it means nothing... Capcom is far off being broke and it's actually one of the few who are still making tons of money in the gaming industry in Japan

150 million "dollars in the bank" is pretty standard for Capcom, they were able to live with those and even with lower numbers for decades. Money in the bank is basically IDLE MONEY, it is a much smarter business to invest most of your funds instead of sitting on them doing nothing.
If you want hard numbers, here they are. Total amount of money in the bank:

Year 2003 - 14,894 millions of yen
Year 2004 - 16,957 millions of yen
Year 2005 - 12,948 millions of yen
Year 2006 - 678 millions of yen
Year 2007 - 9,200 millions of yen
Year 2008 - 13,061 millions of yen
Year 2009 - 7,378 millions of yen
Year 2010 - 12,299 millions of yen
Year 2011 - 27,655 millions of yen
Year 2012 - 11,348 millions of yen
Year 2013 - 14,327 millions of yen (152,415 millions of dollars).

From Capcom's Annual report, pages 7 and 8.
150 million dollars is more than Capcom usually have in the bank, which, remember, means nothing.

KingMike

#13

KingMike said:

Uh... isn't $80 million for buildings something Capcom shouldn't be able to afford these days?

jillsand

#14

jillsand said:

@Gamer83 You are 'utterly stupid' if you think that capcom cannot afford such investment... it's minor compared to the assets they have... would you think they have no idea how to run a company with 1 billion dollars of market cap?

jillsand

#15

jillsand said:

@KingMike clearly they can afford it, if they spend it... seriously I couldn't care less about capcom, like any other gaming company... I'm here because I'm a nintendo fan actually, but I just play games I like regardless of the company... but reading all these comments about capcom being broke it's kinda frustrating... you guys have no idea what you are talking about... evidently they know how to run a 1 billion dollar business if they came to this point so far... you guys in the west have a weird misconception about capcom being broke... here in Japan it's one of the top gaming companies...

Deathgaze

#16

Deathgaze said:

@Chomposaur They're far to big to go bust within the foreseeable future. Now I know you're about to point me to articles about them having 150M in the bank, but what people seem to forget is that they can sell off IPs and assets before throwing in the towel.

unrandomsam

#17

unrandomsam said:

This is what they should be doing. Ignore the West do what they are good at. Make another Ghosts n Goblins game.

(It probably isn't what they should be doing but what I personally want them to be doing is making games that would work as a coin-op. Difficult but possible where you love it start to finish).

kensredemption

#18

kensredemption said:

What they need really is a new IP showcasing their Panta Rhei engine that's accessible on all next-gen platforms. I was giddy when I read an article on here a few months back about its flexibility, but I've yet to see any games making any use of it. Deep Down on the PS4 was supposed to be the first. Exclusivity will kill them since it hampers accessibility. Hell, much as I want to play Dead Rising 3, I don't want to spring a good chunk of my income to get an Xbox One just to play it. More accessibility means a wider market and more opportunities for consumers to get their hands on it. All they'd need to do in the meantime is make sure people actually buy it.

jillsand

#19

jillsand said:

@Deathgaze People have actually no idea how big japan is here in japan, they even publish and localize GTA, to give an example...

And outside of making and publishing games, they have so many ways of income, including capcom themed bars, theme parks, movie licensing deals... hell, they could live off of Monster Hunter merchandising alone.

TeiselBonne

#21

TeiselBonne said:

That's REAL cute. Putting Servbots and Megaman in front of their HQ. They are some classy trolls, I'll admit. Putting practically cancelled materials out in front, that is. It's almost as if they're showing them the door. :(

WaxxyOne

#22

WaxxyOne said:

I can save them $80 million dollars on R&D... Capcom, your fans want more Mega Man. I will gladly accept a mere 10% of the investment money I just saved you...

unrandomsam

#23

unrandomsam said:

Strange they wouldn't do Megaman 11 when the last time it only cost them 50,000$ (Presumable even less for more similar sequels). Unless it didn't even make that back.

Einherjar

#24

Einherjar said:

Sales plummit because games are made in the exact opposite way their target audience prefers them. Lacking income because of critical abscence of major IPs. Consumer alienation due to constant and shameless milking of the same games year after year.
Logical conclusion ? Throw the money you dont have (capcom statement: No money to poduce much needed sequels to franchises, Street Fighter V for instance) at two new R&D buildings, so you have more room to not spend the money you dont have on games which no one wants.

MAN1AC

#25

MAN1AC said:

Doubling down on that mobile division ;)
Edit: I was trying to make a troll post but holy crap this is to expand their mobile division -______-. This company cant burn to the ground fast enough. Absolutely disgusting.

Capt_N

#26

Capt_N said:

@Chomposaur: Capcom may not necessarily sell to Nintendo. If they sold off MM, they probably would consider multiple offers, since they would want to make the most off the sale.

@Everyone else: Well, if it will help them make more money, then great for them. I wonder how Capcom will react, should Mighty No. 9 be profitable? Will they think a Mega Man title won't sell hot on the heels of MN9, & wait to release? Will they release a MM title anyway? Or will MN9 not have any effect on Cap's view of their own ip, that fans want something from?

Hy8ogen

#28

Hy8ogen said:

Just make a proper Megaman game and I'm not talking the fugly X7 and X8. X-X6 is dah shtzs. Also please make MH4U for Wii U Plox.

Technosphile

#29

Technosphile said:

So they're keeping development in Japan? It's about time.

It's also too late. Thanks for dragging the Final Fight, Megaman, and Strider names through the mud by outsourcing to the west, Crapcom.

audiobrainiac

#30

audiobrainiac said:

Maybe this'll help them give us what we want, eventually. Or it could just be tacking on 4-5 more years of disappointment. We'll see....

BoobooMama

#32

BoobooMama said:

This is great news! I think they finally realized their fans (me included) don't want games that are 'catered to the west. Just focus on making great Japanese games. That's what we want.

AkinaChan

#33

AkinaChan said:

Instead of taking risks in this department, perhaps they should take risks in making another Mega man game and, you know, not canceling it -_-

AugustusOxy

#34

AugustusOxy said:

Good, then maybe they'll merge with Namco Bandai finally.

After that Nintendo can buy all three of them and have a strangle hold on most Japanese game makers, just like how Microsoft and sony have strangleholds on most American game makers.

Superryanworld

#35

Superryanworld said:

I've enjoyed capcom games since the early 90's,but I wonder about the company's current state.When I think capcom games i had the most fun with over the last few years I think monster hunter,dead rising,ssf4,umvc3,re revations,megaman 9&10,and Okami hd.Then I see games like resident evil 5&6 trying to go all action to pull in cod sales numbers and they upset long time fans,and got less than stellar sales to boot.I enjoyed the remake of DMC,but felt it was only done to drum up bigger sales.The reboot of bionic commando was a nightmare,and their new ip remember me didn't do so well either.I also hope the next streetfighter game doesn't handle dlc like sfxt did.I still have fun with capcom games, but with the way Keiji Inafune left the company,and the way capcom has handled the franchise( that basically caused the creation of mighty number 9 ),and damaging old ip's I''m curious to see where capcom goes from here.

TheRealThanos

#36

TheRealThanos said:

@jillsand "You kids?" No offense but I'm a 43yo IT Sales & Marketing professional and happen to have quite a bit of experience in sifting through company financials. Whichever way you look at it, it IS a big investment for Capcom, considering the state they're in, and seeing as so many media reported the same story (and some of them in elaborate detail), there should at the very least be some truth in it. It could certainly be true that they have money on the side and they do have money invested in other areas such as the examples you gave, which also makes them money in return, but none of that takes anything away from the fact that they have very little savings in their account for a company of their stature. There are very few other software companies of the same size with such a small amount of cash reserves. Other than that, I actually think it was the right move for them to make, because they have to do something to be able to get back to making a healthy profit in the software market and investing in new property, personnel and probably IP's might get them just that, whereas standing still could very well be the final nail in the coffin for them, so this is at the very least the better choice for them to make. Now we just have to wait and see if it will bring them the success that they are so in need of. Recent events also point to that, as stated in this article:
http://www.nintendolife.com/news/2014/03/capcom_cuts_profit_projections_by_over_50_percent_despite_strong_sales_of_monster_hunter_4

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