Capcom takes a $48 million charge on underperforming mobile and PC online games

FY14 net income downgraded by $19 million

Capcom takes a $48 million charge on underperforming mobile and PC online games

Japanese game publisher Capcom (TYO:9697) has revised its FY14 forecast for the 12 months ending 31 March 2014.

The good news for investors is that due to sales of Monster Hunter 4, it now expects sales to be $44 million higher (¥4.5 billion).

The bad news is that net income will be down by $19 million (¥2 billion), because of a special loss that follows an examination its mobile games operations and the performance of PC release Monster Hunter Frontier G.

Inexperience matters

Capcom says that the performance of its mobile and PC online business has been "consistency below expectations".

Notably, it had split mobile development between its offices in Osaka and Tokyo, with the Osaka teams lacking the experience of making native games. It will now look to combine the skills of its Tokyo and Osaka workforces.

Capcom said it also experienced "fierce competition" within the PC online market.

For that reason, it's reorganised the products and operations of these groups and decided to record a "business structural improvement expenses" of around $48 million (¥5 billion).

Last quarter

During FY13 Q3, Capcom Mobile saw a year-on-year 39 percent drop in sales to ¥5.2 billion ($49 million).

This was partly due to the decline of Japanese platform GREE as the Japanese feature phone gaming market collapsed, and partly due to the lack of recent hits from its western-focused casual gaming division Beeline Interactive.

[source: Capcom]

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A Pocket Gamer co-founder, Jon is Contributing Editor at which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.