Could a Capcom Revival be coming at long last by way of a new Resident Evil? (by Naoki Fujiwara, April 19, 2014, 12:00.)



Having been preoccupied by the success of Monster Hunter 4 for the Nintendo 3DS portable gaming system, prominent game developer Capcom is significantly lagging behind when it comes to having a majorly profitable smartphone game to call its own. The company not only reduced its earning forcast for the fiscal quarter ending March 26 to the tune of 5 billion yen [approximately $50 million USD] in the wake of a game development cancellation, but it also has yet to put out any major software for the PlayStation 4 console, which has been received well in Western territories. Unless Capcom learns to stop depending so much on its Monster Hunter franchise, it could well find itself in a bind down the road.



Is Capcom's pride making itself an enemy of smartphone games?



Having become a household name by way of games such as the Resident Evil series, Capcom as a game developer is one of the major representatives of the Japanese video game industry, putting out a number of games that are tailored primarily towards hardcore gamers, people who fervently play video games. Save for Nintendo, with most other Japanese video game companies being left behind by their more technologically advanced counterparts in the West, Capcom has become a bit of a lone wolf, in turn shouldering a lot of gamers' hopes and expectations as it goes about its business.



In contrast to traditional games, smartphone games routinely target more "casual" players, with qualitative emphasis on the development side focusing less on a game's craftsmanship and more on its monetization schemes and how to make money from its players. Many gamers in the traditional sense therefore tend to distance themselves from smartphone games. As a result of Capcom's insistence on its games having that high quality craftsmanship, its knowledge about how to go about developing for smartphones is lacking and is a key factor behind its lateness in producing a major hit for them.



Effectively, given the sort of experience that the company's developers have accrued up until now, Capcom's management has made it clear that they won't take a serious transition into smartphone game development lightly and that doing so would be a blow to their pride. Although game development costs for smartphones are normally curtailed in favor of raising profits, Capcom's smartphone games have cost them a lot of money and have in turn resulted in a duds. Specific titles haven't been mentioned by the company, but Monster Hunter: Massive Hunting, which was released in February last year and stopped service in late March, is seen to be an especially major culprit when it comes to its mobile doldrums.



As a result of these factors, Capcom posted its 5 billion yen losses on March 31 for its quarterly earning report. This therefore has brought down its projected operating profits down by 2 billion yen to a total of 10 billion yen [approximately $100 million USD], with overall profits being reduced by 3.5 billion yen to a total of 3.3 billion yen [approximately $33 million USD].



Nevertheless, sales figures for Monster Hunter 4 far exceeded the company's projections, resulting in Capcom getting an extra 4.5 billion yen over its initial expectations for company-wide sales, upping the final number to 101.5 billion yen [approximately $1 billion USD] and marking the first time the company has crossed the 100 billion yen threshold. For better or for worse, Capcom has increasingly hedged its bets on the success of its Monster Hunter franchise.



What made Capcom go with the Xbox One over the PS4 for a big retail game?



Capcom's problems aren't limited to its prospects with smartphone games, however. They were also late to start developing a major game for the PlayStation 4, which has been a huge hit so far in Western countries and has a lot of passionate gamers supporting it.



As of this writing, the only thing Capcom has on the table for the PS4 is a downloadable title, Deep Down, with nothing bigger in the pipeline that could satiate fan expectations. What's more, Deep Down, which doesn't have a set release date, is also only going to be a free-to-play game.



Capcom president Haruhiro Tsujimoto asserted that "Free to play games are the norm for smartphones, but there are instances where they've also succeeded on consoles, so we see it as a challenge worth taking upon ourselves." The company has faith that it'll put out a reputable game, but its monetization scheme could ultimately make or break it in the eyes of its fans.



Meanwhile, on the Xbox One, the PS4's rival console made by Microsoft, Capcom has already put out a million-selling hit, but that console won't be coming to Japan until September. This has left Japanese gamers feeling left out in the cold while they're left waiting for a big new console game to play of their own. On top of that, sales of the Xbox One hardware are trailing behind that of the PS4, putting Capcom in a bind; even if it made a tactical error in focusing on developing for the Xbox One, they're too fargone to take it back at this stage.



Could Capcom be planning something for E3 in June?



With Capcom late to the smartphone game development scene and dissatisfaction surrounding its current PS4 output, one could argue that the developer has seen better days. Nevertheless, plans are being put into action to turn the situation around.



On the smartphone front, for instance, Capcom up until now developed for them at both its main headquarters in Osaka as well as its branch office in Tokyo. But from this April onwards, those efforts will be consolidated as part of the company's online PC game development team in Tokyo. With monetization of online PC games greatly resembling those of smartphone games, Capcom hopes that the move will yield a lot of synergized efforts going forward.



And then there's the matter of E3. Set for June, the publisher plans to show off a major game of some sort for the PS4. Fans are getting increasingly hyped up for the event, as they take it to mean that a new Resident Evil game is on the horizon. Resident Evil 6, the last game in the series, sold over 5.6 million units and it's expected that a potential 7 would sell equally as well if such a thing were to come out.



For the time being, Capcom has Monster Hunter 4G set to arrive in stores this fall as a revamped version of Monster Hunter 4, but an analyst familiar with the game industry expressed restraint about its potential success, stating "I feel confident in saying that Monster Hunter is going to prove to be less and less of a golden egg compared to its highs for the 2007-2008 fiscal year [This is when the portable iterations of Monster Hunter 2 were running amok on Japanese sales charts]. Obviously they need to make a splash on smartphones, but they also need something else that's big as a traditional game or else Capcom could find itself left behind by speedier Western game developers." To say the least, Capcom is definitely at a crossroads at this stage.