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Capcom Q2 Earnings Results FY3/2020: Iceborne 2.8M units, digital contents net sales down YoY due to digital shift

ggx2ac

ggx2ac

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Source: http://www.capcom.co.jp/ir/english/news/html/e191029b.html

Capcom Co., Ltd. today announced that in its consolidated business results for the six months ended September 30, 2019 net sales were 37,272 million yen (down 14.0% year-over-year), operating income was 13,992 million yen (up 33.2% year-over-year), and ordinary income was 14,002 million yen (up 36.0% year-over-year). Net income attributable to owners of the parent was 9,846 million yen (up 43.7% year-over-year).

This quarter, despite a dip in net sales year-over-year, in the core Digital Contents business Monster Hunter World: Iceborne shipped 2.8 million units supported by consistent popularity, driving profitability improvements, while sales growth of high-margin digital downloads, including major catalog titles such as Resident Evil 2 and Devil May Cry 5, also contributed, resulting in the highest profit at all levels at the end of a second quarter in company history.
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Regarding Digital Contents:
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  1. a. In this business, Monster Hunter World: Iceborne (for PlayStation 4 and Xbox One) experienced solid sales and led profit growth. In addition, healthy sales of high-margin catalog titles also boosted profit. Specifically, sales of Resident Evil 2 (for PlayStation 4, Xbox One and PC) and Devil May Cry 5 (for Xbox One, PlayStation 4, and PC), both hits in the previous fiscal year, continued to grow due to an expanded user base. Monster Hunter: World (for PlayStation 4, Xbox One and PC), which was launched in January 2018, also continued to display its long sales life.
  2. b. The resulting net sales were 29,163 million yen (down 14.7% from the same term in the previous fiscal year) due to an increase in the percentage of digital sales. Operating income was 14,503 million yen (up 23.4% from the same term in the previous fiscal year) mainly due to contributions from Monster Hunter World: Iceborne and catalog titles.
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What that means is, they're down in Net Sales YoY because they didn't have as many physical games to ship.

When you have Iceborne being mainly a digital only title (ignoring Master edition), it means Capcom can't ship millions of copies at launch which gives them money from retailers so they're relying on consumers to buy the game from the relevant digital platforms.

Source: http://www.capcom.co.jp/ir/english/data/html/result/2019/2nd/4.html
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SinCityAssassin

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Capcom stated it reached 2.5 million shipped for Iceborne after its first week, so the three weeks after yielded 300k.

That said, despite lower sales, still up on profit.
 
Mezoly

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"Monster Hunter: World (for PlayStation 4, Xbox One and PC), which was launched in January 2018, also continued to display its long sales life."
Can you say strong legs?
 
pswii60

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Stygr said:
Maybe next time treat the 2nd best performing platform for MH better lol

300k after three weeks is disappointing.
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We're talking PC I assume?

They'll see those sales in January I presume.

But without cross-progression they won't be seeing many people double dipping, which is why the staggered release doesn't really provide any benefit to them that I can see.
 

Deleted member 8196

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pswii60 said:
We're talking PC I assume?

They'll see those sales in January I presume.

But without cross-progression they won't be seeing many people double dipping, which is why the staggered release doesn't really provide any benefit to them that I can see.
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Of couese Iceborne will do good in January, but it's still whack.

Your best performing game is having a staggered release and skipping the 2nd best platform, the one with the highest digital margin compared to PS4 and Xbox One.
 
SinCityAssassin

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Digital shift for this second half of the year is also why operating profits are up, no real physical media to ship. So the trade off is there.
 
Theswweet

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Zedark said:
Really? 20% of owners buying an expansion at $40 after 4 weeks sounds pretty good to me.

Edit: And keep in mind that PC doesn't have access to it yet, so that should give a surge come January (January, right?).
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It's even closer to 1/3rd of those that bought it on console, depending on exactly how much the game has sold on PC.

Edit: Actually, to put it another way - at least on PS4 the basegame has around a 50% completion rate (based on PSN trophy info) . Assuming that the game has sold around 10m on consoles, then you're looking at over half of the folks that finished MHW's basegame went on to buy Iceborne at launch. That's good retention.
 
SinCityAssassin

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Additional thing I see, that operating income for fiscal is now forecast down, expecting lesser income from mobile.

Zedark said:
Really? 20% of owners buying an expansion at $40 after 4 weeks sounds pretty good to me.

Edit: And keep in mind that PC doesn't have access to it yet, so that should give a surge come January (January, right?).
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I'm less curious about the total number and more about the collapse after the initial week. 300k after the first week to end of month. I'll expect a large surge for PC but it's curious.

Theswweet said:
It's even closer to 1/3rd of those that bought it on console, depending on exactly how much the game has sold on PC.
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Realistically it should be between 1/5 to 1/4 the console base by this point if sales continued to be steady. Last August, Capcom boasted 10 million sold at the launch of the PC version and it was reported at 8.3 mil the month before.
 
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Mbolibombo

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Impressive, should make shareholders happy.

Iceborne very frontloaded, wonder how it will leg out until the PC version releases.
 
Naga

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So only 300k copies for Iceborne since launch? Disappointing.
Their PC strategy for MonHun (let's not even talk about Switch) has been pretty terrible sadly.

Really good results otherwise.
 
Gotdatmoney

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Stygr said:
Maybe next time treat the 2nd best performing platform for MH better lol

300k after three weeks is disappointing.
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Expansions like this would naturally be a lot more front loaded. I assume what they are doing with PC is to have more balanced revenue across the fiscal year.

2.8 million is mighty impressive.
 
Terraforce

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Stygr said:
Maybe next time treat the 2nd best performing platform for MH better lol

300k after three weeks is disappointing.
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In what world is ~3M purchases in less than a month not a good performance for a DLC expansion? All of my what? I get you're sad it's not on your platform of choice, but this post is just silly.
 
Saint-14

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Terraforce said:
In what world is ~3M purchases in less than a month not a good performance for a DLC expansion? All of my what? I get you're sad it's not on your platform of choice, but this post is just silly.
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Era will always find a way to be disappointed about MHW, the funny thing is the same thing happened with base MHW and all the no leg talk and yet it's over 13 million now.
 
Terraforce

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SinCItyAssassin said:
Turning on your own, huh?
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?

Saint-14 said:
Era will always find a way to be disappointed about MHW, the funny thing is the same thing happened with base MHW and all the no leg talk and yet it's over 13 million now.
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Yup, I remember several "only" and "doubt it'll have legs" posts at launch. I shouldn't be surprised at some of the ridiculousness that comes out of MHW threads here, but it's still crazy to see people contest it even now. Usually as with this case though, it's pretty clearly due to a bias of some kind.
 
Dog of Bork

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Saint-14 said:
Era will always find a way to be disappointed about MHW, the funny thing is the same thing happened with base MHW and all the no leg talk and yet it's over 13 million now.
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The idiocy surrounding this title's doomed legs won't ever end, I see. When it becomes the most successful expansion and ends up as the most successful game+expansion in the franchise by more than double, it will still be a failure.

2.8M is damn impressive to me, especially without the second largest platform. I'm one of the folks who double dipped on the base game but I've waited for IB on PC instead of double dipping again. Great results for Capcom. Looks like their strategy with this title really paid off, among other huge successes they've had this year.
 
fiendcode

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2.8m is a much lower ratio than I expected, especially with it being the first DLC expansion making it an easier upgrade than previous full price G expansions. Are these numbers excluding the Master Edition or something? It's surprisingly close to 4G, which did 2.2m in one week less but Japan only.

Saint-14 said:
Of course ratio is gonna be smaller when MHW sold over 3 times more than the older titles, Iceborne will easily outsell the older G ranks, by x2 when all said and done I'd say.
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With only 2.8m it's first quarter I'm not so sure anymore. Over 8.4m would be a tall order and even with the staggered PC release I'm not sure Iceborne will get there now.
 
Dalik

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Delaying the platform with 5+ mln copies wasn't very smart. Double dippers don't matter, incredible how they still can't see this.
 
SinCityAssassin

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Also it was 14 million. If you're gonna bash any sort of criticism or outlook on its sales so y'all can keep on going "beast mode", at least get the number right.
 
Terraforce

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SinCItyAssassin said:
He's predominately Sony. He's always in Sony threads. And he is not speaking from a position of jealousy. The point is the expansion remains incredibly frontloaded and not working to have launch parity with PC is hurting its sales rates.
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This is literally data from a span of 24 days, not even a full month. Not sure what pie in the sky expectations you had for DLC if you think these numbers are remotely disappointing. What kind of crazy numbers did you expect from mere DLC in such a small time frame??

And I'm saying this as a predominantly Nintendo gamer who is waiting for the PC release of Iceborne ironically enough.

SinCItyAssassin said:
Also it was 14 million. If you're gonna bash any sort of criticism or outlook on its sales so y'all can keep on going "beast mode", at least get the number right.
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Is this really necessary? This just seems petty.
 
JoJo'sDentCo

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Happy for the hard working people at Capcom. As long as they focus on quality and artistry they should be able to keep the success train rolling.
 
SinCityAssassin

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Terraforce said:
This is literally data from a span of 24 days, not even a full month. Not sure what pie in the sky expectations you had for DLC if you think these numbers are remotely disappointing. What kind of crazy numbers did you expect from mere DLC in such a small time frame??
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None, because I don't think anyone here is saying that the number is a failure and objectively its first week results were great. You can be impressed all you want with the number the put out on paper. But some of us here sort of care about sales potential. If the worry is unwarranted so be it, but if you're gonna dismiss that sort of discussion with accusations of platform bias then you don't bring anything to this conversation.
 
Saint-14

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fiendcode said:
With only 2.8m it's first quarter I'm not so sure anymore. Over 8.4m would be a tall order and even with the staggered PC release I'm not sure Iceborne will get there now.
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Not at all, this will be the only MH content until next gen, we still haven't gotten discounts for it and with PC release it'll go places, I mean maybe it won't be x2 more exactly but it'll be close regardless.
 
fiendcode

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Terraforce said:
This is literally data from a span of 24 days, not even a full month. Not sure what pie in the sky expectations you had for DLC if you think these numbers are remotely disappointing. What kind of crazy numbers did you expect from mere DLC in such a small time frame??

And I'm saying this as a predominantly Nintendo gamer who is waiting for the PC release of Iceborne ironically enough.
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I expected better numbers than previous G expansions.

World literally tripled MH4 sales but Iceborne has barely exceeded 4G. I'm not sure what's to explain the low retention, has most of the audience moved to PC or just moved on in general?
 
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