Capcom doubles down on HD remakes to escape its revenue slump

Capcom managed to increase profits during its 2015 fiscal year despite a steep drop in revenue thanks to cost-cutting efforts like focusing on digital over retail game sales, and the company seems poised to double down on digital rereleases of old games in the year ahead.

"HD remasters of our catalogue hit titles will be one of our key business activities," reads a Capcom spokesperson's response to a question posed in a recent investor Q&A. "For example, overseas download sales of 'Resident Evil' (HD Remastered) in the past fiscal year were far higher than we expected."

Despite that, Capcom's financial report for the fiscal year ended March 31, 2015 shows sales revenues in its Digital Contents department (which encompasses the company's video game businesses) dropping 31.1 percent year-over-year to 4.5 billion yen (~$36.8 million USD). However, profits actually jumped 127.4 percent year-over-year to 1 billion yen (~$8.1 million USD) thanks in part to what Capcom describes as efforts to "reduce the cost of sales" by focusing on digital content over retail.

"A steady increase in the sales volume of digital download sales of repeat titles contributed to profits due to their high profitability," reads an excerpt of the report. Capcom's top earners for the year included the afore-mentioned Resident Evil remake as well as Super Street Fighter IV and Resident Evil Revelations 2, all of which can be purchased digitally.

Capcom's other divisions, which include its pachinko/slot machine and game guidebook businesses, reported year-over-year drops in both sales and profits due to weak markets, underperforming products and, in the case of Capcom's arcade operations, "fickle weather" in Japan.