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Introduction & Market Context
Capcom Co., Ltd. (TSE:9697) presented its first half fiscal year 2026 results on October 29, 2025, showcasing substantial growth across all business segments. The Japanese video game developer and publisher reported a 44% year-over-year increase in revenue and a remarkable 90% jump in operating profit, driven primarily by strong catalog sales and its amusement equipment business.
Despite these impressive growth figures, Capcom's stock saw only a modest 0.85% increase following the announcement, closing at ¥4,034, as revenue fell slightly short of market expectations. According to the earnings call transcript, Capcom posted revenue of ¥35.65 billion for Q2, below the anticipated ¥38.15 billion, marking a 6.55% shortfall. However, earnings per share of ¥24.57 significantly exceeded forecasts of ¥22.14.
Quarterly Performance Highlights
Capcom's first half results showed substantial improvements across all key financial metrics. Net sales reached ¥81.1 billion, up 44% from ¥56.4 billion in the same period last year. Operating profit saw an even more dramatic increase, jumping 90% to ¥39.3 billion from ¥20.7 billion, resulting in an improved operating margin of 48.5% compared to 36.7% in the previous year.
As shown in the following chart of Capcom's H1 results and full-year plan:
CFO Miyazaki Satoshi noted during the earnings call that the company is "progressing very smoothly towards our goal of 13 consecutive years of operating profit increase." The company maintains its full-year forecast of ¥190 billion in net sales and ¥73 billion in operating profit, representing year-over-year increases of 12% and 11% respectively.
Digital Contents Performance
The Digital Contents segment, which includes console and PC games, remained Capcom's primary revenue driver, generating ¥49.8 billion in net sales, a 25% increase year-over-year. Operating profit in this segment rose by 52% to ¥31.3 billion, with an impressive operating margin of 62.9%.
Executive Officer Shimachi Yoshikazu highlighted that "repeat sales have increased by 20%, reaching the highest half-year sales in our history." This achievement is particularly noteworthy given the absence of major new releases during the period.
The following chart illustrates Capcom's record-breaking unit sales performance:
Capcom achieved its highest-ever total unit and catalog unit sales for a first half period, with 23.85 million units sold compared to 20.03 million in the previous year. Catalog titles accounted for 22.85 million units, demonstrating the enduring appeal of Capcom's game library.
The company's top-selling titles during the period included Devil May Cry 5 (2.13 million units), Resident Evil Village (1.57 million units), and Resident Evil 4 (1.27 million units). These strong catalog performances were supported by strategic pricing and digital promotions.
Looking ahead, Capcom highlighted two major upcoming releases:
Resident Evil Requiem is scheduled for release on February 27, 2026, while Monster Hunter Stories 3: Twisted Reflection will launch on March 13, 2026. These titles are expected to contribute significantly to Capcom's full-year targets.
Amusement and Other Business Segments
The Amusement Equipments business emerged as a standout performer, with net sales surging to ¥15.1 billion from ¥3.1 billion in the previous year. Operating profit in this segment increased six-fold to ¥9.0 billion, driven by strong performance of new and repeat sales of pachislo machines.
As illustrated in the following slide, Capcom's pachislo business saw tremendous growth:
Total pachislo sales volume reached 38,600 units in the first half, more than double the 17,000 units sold in the same period last year. Key titles included Devil May Cry 5 Stylish Tribe (11,000 units) and Shin Onimusha 3 (18,200 units).
The Arcade Operations segment also showed healthy growth, with net sales increasing 14% to ¥12.4 billion and operating profit rising 25% to ¥2.0 billion. Capcom opened four new arcade locations during the period, including Capcom Connect Space in Osaka, bringing the total store count to 57. The company plans to expand to 63 stores by the end of the fiscal year.
The Other Businesses segment, which includes character licensing and merchandise, saw net sales increase 50% to ¥3.6 billion, with operating profit rising to ¥2.0 billion. In-game collaborations with other companies' titles boosted sales in the character business, while events like Street Fighter League supported brand awareness.
Forward-Looking Statements
Capcom's presentation highlighted the company's impressive franchise portfolio, which continues to drive long-term growth:
The Resident Evil series leads with 178 million units sold lifetime, followed by Monster Hunter (123 million), Street Fighter (58 million), and Mega Man (43 million). This strong intellectual property base provides Capcom with substantial opportunities for continued catalog sales and new title development.
Despite the revenue miss noted in the earnings call, Capcom's overall financial position remains solid. Total assets stood at ¥298.9 billion as of September 2025, with net assets of ¥245.2 billion. The company's strong balance sheet and cash position support its ongoing investment in game development and business expansion.
Capcom faces some challenges, including a 50% year-over-year decline in mobile contents revenue and increased competition in the gaming industry. However, the company's focus on leveraging its strong IP portfolio through digital sales and strategic partnerships positions it well for continued growth. With two major titles scheduled for release in the final quarter of the fiscal year and strong catalog performance, Capcom appears on track to achieve its 13th consecutive year of operating profit growth.
Full presentation:
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