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Year Ended March 31, 2013 Code Number: 9697 Year Ended March 31, 2013 証券コード：9697 Corporate Philosophy “Capcom: Creator of Entertainment Culture that Stimulates Your Senses” Our principle is to be a creator of entertainment culture. Through development of highly creative software contents that excite people and stimulate their senses, we have been aiming to offer an entirely new level of game entertainment. Since Capcom’s establishment in 1983, we have developed numerous products around the world using our world-class development capabilities to create original content. This year we commemorate 30 years since our founding. Today, young and old, men and women enjoy a gaming experience all over the world. It is now common to see people easily enjoying mobile content (games for cell phones) on streets or enjoying an exchange through an online game with someone far away. Moreover, game content is an artistic media product that fascinates people, consisting of highly creative, multi-faceted elements such as characters, storyline, a worldview and music. It has also evolved to be used in a wide range of areas of media such as Hollywood movies, TV animation programs and books. As the ever-expanding entertainment industry becomes pervasive in our everyday lives, Capcom will continue to strive to be a unique company recognized for its world-class development capabilities by continuously creating content brimming with creativity. Front Cover Design Created with Our Fans We incorporated photos submitted by our fans into the front cover design to express the image of Capcom’s business supported by fans around the world. We received many photos of fans enjoying Capcom games in everyday life submitted to our corporate website. 1 CAPCOM ANNUAL REPORT 2013 Editorial Policy Strength Capcom’s This report was prepared for a wide range of readers, from individual shareholders to institutional investors, and is 3 Capcom’s Strength intended as a tool to aid in the understanding of Capcom management policies and business strategies. We strive to go beyond simply presenting company Highlights earnings and provide insight into game and entertainment 7 11-Year Summary of Consolidated Business market trends; we have also compiled a game industry Performance Indicators glossary included at the end of this report. Furthermore, in 9 Commentary on Main Financial Indices response to investor concerns, we have enhanced financial analysis, governance and other information. 11 Business Segments Highlights To the extent possible, we attempt to make data and Shareholders To Our content understood visually by making full use of photographs, graphics and other design elements. 15 To Our Shareholders (From CEO & COO) The information presented in this publication is also available online. 17 CEO’s Discussion of Performance Summary and New Medium-Term Business Goals Search Index Our Strategy for Growth At present Package game focused business model Package Software Sales of other editions and Stimulate interest with Package Software From COO events linked to interests promotion of next title 1st year 2nd year 3rd year 4th year 5th year 6th year To find out more about our businesses 1 title every 3--4 years sales cycle Lose fans during 3-4 year development period PP3–6, PP11–14, PP33–44 In future Enhanced digital strategy (DLC) business model Package and Link to interest with Stimulate interest with Package and Link to interest with Stimulate interest with Package and 23 Downloadable Software Downloadable Software Downloadable Software Our Strategy for Growth additional DLC promotion of next title additional DLC promotion of next title additional DLC additional DLC additional DLC additional DLC 1st year 2nd year 3rd year 4th year 5th year 6th year 1 title every 2.5 years sales cycle To find out more about the business performance 25 Growth Strategy Capture users with additional DLC, acquire long-term, stable earnings Asian Market North American and *2 PP7–10, PP17–19(Q1, Q2, Q3), PP33–44, PP63–68 (Including Japan) European Markets Emerging Markets Strength of Beeline brand social games Strengthen Beeline brand social games Strengthen Beeline brand social games Distribution of applications for Distribute application for smartphones Distribute application for smartphones smartphones Provide content developed from domestic Mobile Increase number of Capcom brand social SNS platforms overseas Improving the Consumer Business Contents game titles through partnerships with To find out more about the business or market environment outside development companies (Japan) MHF*1 development (Japan) Use STEAM and other platforms to sell PC Use Steam and other platforms to sell PC MHF*1 development (Taiwan) game downloads game downloads “Monster Hunter Online” development (China) Support cloud gaming PC browser games development PC Online Release new PC online title (Japan) (South America) Release browser game (Japan) P12, PP15–16, PP17–19(Q1, Q2, Q3), PP23–24, PP33–44 “Onimusha Soul” development (Taiwan) Download sales of past released titles Download sales of past released titles 27 Growth Strategy Additional content distribution Additional content distribution Downloadable Full title download sales Full title download sales To find out more about the business or Content Market Scale Market Scale Market Scale billion billion billion billion billion billion 16.1 dollars 23.6 dollars Growth rate 22.3 dollars 38.5 dollars Growth rate 4.7 dollars 11.5 dollars Growth rate medium-term business goals Strengthening the High-Growth Online Business (2012) (2017) 46.6％ (2012) (2017) 72.7％ (2012) (2017) 144.7％ *1: “Monster Hunter Frontier G” *2: South America, Africa, Middle East, etc. billion billion billion P20（Q4） Arcade game market*2 173.8 yen Home video game market 2,550 yen Character business market*1 1,239.5 yen 29 Growth Strategy To find out more about our business strategy Coin-operated games Home video games Figures Books billion PP15–16, PP19–22, PP23–32 Expanding Single Content Multiple Pachinko & Pachislo market*3 1,200.8 yen Usage Development “Monster Hunter” To find out more about our R&D Capabilities Pachislo machines*4 series Events billion PP3–4, PP23–32, 31 Conversation: An Analyst’s Perspective on Capcom’s Mobile contents market 1,230 yen separate volume Strategy for Growth Social games Orchestral concerts Attractions The Latest Development Report 2013 To find out more about the game industry glossary and Outlook for the Future Overview of Capcom’s Business P93 Overview of Capcom’s Business and 33 Outlook for the Future 33 Digital Contents 39 Arcade Operations 41 Amusement Equipments 43 Other Businesses Corporate Governance 45 Corporate Governance “Mega Man” Series 45 Conversation: An External Director’s Perspective This was the first title sold for the Super NES in on Capcom’s Governance 1987. Tough gameplay that ran counter to the looks of the character made this game popular, 47 Corporate Governance Structure and Initiatives producing products across a diverse range of 51 Creating Relationships with Shareholders and Investors media after initial sales launch. This flagship 53 Internal Management Structure and Initiatives Capcom title is popular with people of all ages. 55 Risk Management 57 CSR Initiatives 59 Directors and Corporate Auditors Financial Section 61 Financial Section 72 Consolidated Statements of Changes 62 Financial Strategy According to the CFO: in Net Assets R&D Investment and Fund Procurement 73 Consolidated Statements of Cash Flows Capcom’s 30th Anniversary 63 11-Year Summary of Consolidated 74 Notes to Consolidated Financial Commemorated on June １１, 2013 Financial Indicators Statements In addition to setting up an anniversary website, 65 Financial Review 91 Independent Auditor’s Report each of our Group companies is engaged in 69 Consolidated Balance Sheets commemorative business activities. 71 Consolidated Statements of Income/ http://www.capcom.co.jp/ir/30th/ Consolidated Statements of Comprehensive Income Corporate Data 92 Corporate Data 93 Game Industry Glossary 95 Stock Data 96 History separate volume The Latest Development Report CAPCOM ANNUAL REPORT 2013 2 Capcom’s Strength Strength 1 Three Million-Seller Titles This Year Brings Total to 57 One of the World’s Leading Creative Groups Generating Original Content Since our founding in 1983, Capcom has generated one creative game genre after another, from “Street Fighter” to “Resident Evil” 57 and “Monster Hunter”. In this the 30th year since our establishment, Million-Seller Totals (Titles) we are moving forward with the development of new title “deep 35 down” for next-generation consoles, representing the culmination 21 of Capcom technology and our next leap forward. 12 1995 2000 2005 2013 (As of March 31, 2013) 3 CAPCOM ANNUAL REPORT 2013 Strength Capcom’s Next Generation Console Development Engine “Panta Rhei” Development engines support daily game development and can be thought of as the core element of game manufacturers. In addition to the “MT Framework” integrated development environment we have employed since 2006, we are moving forward with the development of “Panta Rhei”, a new efficient development environment for the upcoming highly functional next-generation of game consoles. Together, these two engines will enable the creation of even more creative titles. CAPCOM ANNUAL REPORT 2013 4 Capcom’s Strength Strength 2 Annual Sales of 14,000,000 Units* Passionate Support from Fans Sparks Major Movement Appealing titles go beyond nationality, region and race to capture Package Software Global Sales fans’ hearts. Capcom has a number of series with passionate fans all Asia 4% over the world. In 2013, a global fad called “hadoukening” arose Japan where fans shared pictures of themselves on SNS in which they 32% Europe imitate “hadouken”, a deadly fighting technique made famous by a 26% character from the “Street Fighter” series. North America * Package software global unit sales 38% 5 CAPCOM ANNUAL REPORT 2013 Strength Capcom’s Strength 3 7 Hollywood Films Bring in 1 Billion Dollars* at Box Office Possessing an Abundance of Powerful Content for Unlimited Business Expansion Capcom titles with high potential are not limited to the game arena.
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