Capcom has had to revise its earnings expectations thanks to a massive restructuring of its development operations. The restructure means, among other things, that a number of projects have been cancelled and in the future greater emphasis will be placed on developing titles in-house.
The 7,200m yen (£48m) restructure has been booked as a 'special loss'. In Capcom's words: "In view of the sudden and significant changes in the operating environment of the Digital Contents business, Capcom reviewed its business expansion strategy for the sector and restructured its game development organization to reflect changes in its game development strategy."
The company noted that titles have been cancelled "due to delays in responding to the digital contents and the resulting inability to address market needs". It also noted the "discontinuation of development of certain titles outsourced overseas that are no more compatible with the current business strategy".
Another countermeasure mentioned in response to what Capcom sees as "Drastic changes in the industry’s market environment" is an increase in the amount of DLC the company will put out.
Industry observers may be interested to see that as a further part of its market analysis the publisher notes, "Concentration of AAA titles in the hands of few foreign competitors".
The upshot of all the above is that Capcom has revised its net income forecasts for the new financial year down by over 50%, from 6,500m yen (£43.2m) to 2,900m yen (£19.2m).