Capcom Company Ltd

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Capcom Company Ltd.

3-1-3 Uchi-Hiranomachi
Chuo-ku
Osaka,
Japan
Telephone: (
+ 81 06) 6920 3611
Fax: (
+ 81 06) 6920 5100
Web site: http://www.capcom.co.jp

Public Company
Incorporated: 1979 as IRM Corporation
Employees: 1,210
Sales: ¥70.25 billion ($626.0 million) (2005)
Stock Exchanges: Tokyo
Ticker Symbol: 9697
NAIC: 511210 Software Publishers

Capcom Company Ltd. is one of the world's leading video game publishers. The Osaka, Japan-based company is one of the oldest and most successful creators of video games, including such pace-setting series as Street Fighter, Mega Man, and Resident Evil. Capcom develops games for the arcade and home and handheld console markets. Since late 2005, Capcom has also targeted the fast-growing mobile games market for cellular telephones and PDAs. Supporting this expansion, the company acquired Canada-based Cosmic Infinity in May 2006. Capcom also produces and distributes video arcade machines in Japan, Europe, the United States, and elsewhere, and operates its own chain of video arcade centers in Japan. In addition to production of video game titles, Capcom also develops film and television series, based on its popular games and game characters. In addition to its Osaka headquarters, Capcom operates offices in Tokyo; Sunnyvale, California; London; and Hong Kong. Founder Kenzo Tsujimoto is company chairman and CEO. Capcom is listed on the Tokyo Stock Exchange. In 2005, the company's revenues topped ¥70 billion ($626 million).

ARCADE BEGINNINGS IN 1979

The late 1970s saw the first boom in the arcade video game industry, as titles such as Space Invaders, Frogger, and especially PacMan swept the world. Japan quickly emerged as a driving force in this new game segment, which rapidly surpassed the traditional pinball market. Among the early Japanese entrants to this market was Kenzo Tsujimoto, who founded IRM Corporation in 1979 in order to create and distribute electronic arcade gaming systems. Coin-operated arcade games remained a company priority through much of the 1980s; however, as early as 1981, Tsujimoto recognized the potential offered by home arcade systems. In order to tap that market, the company launched a subsidiary called Japan Capsule Computer Co. Ltd. According to the company's web site, the "capsule" part of the subsidiary's name stemmed, on the one hand, from "a container packed to the brim with fun," while on the other hand, the "capsule" format also came from "a desire to create securely packaged games to decrease the rapid expansion of pirated materials." Also in 1981, IRM changed its name, becoming Sanbi Co., and moved its headquarters from Matsubara to Habikino, both in Osaka.

By 1983, however, the company had begun to adopt the Capcom name, at first through the creation of a new subsidiary, Capcom Co. Ltd. While Sanbi was responsible for the group's arcade gaming systems, Capcom became the group's software distribution arm. The company also opened its Tokyo office that year, in support of the release of its first in-house developed coin-operated machines, "Little League" and "Fever Chance." In support of its arcade business, the company also moved into the operation of video arcades, opening its first site, called Acty 24, in December 1983.

Capcom's future direction, however, became clearer by 1984, when the company released its first arcade-based video game, Vulgus, a simple side-to-side "scroller." Yet the company was already at work on the game that was to prove its first true success. Released in December 1984, "1942" helped establish the Capcom name on the world video game map. In support of its growing international success, the company launched its first foreign subsidiary in the United States in 1985.

The company's early entry into the home video game console market provided it with new success that year, as the company adapted its 1942 title for the new and highly popular Nintendo Entertainment System (NES). The company quickly adapted a larger number of its coin-op arcade titles for the new gaming system, launching NES versions of Commando and Ghosts 'n Goblins in 1986. Both titles had debuted in the arcade machine platform in the previous year.

STREET FIGHTING TO THE TOP
IN 1991

The year 1987 brought the company two new milestones. The first was the release of Mega Man for the NES gaming system. Launched in December of that year, Mega Man went on to become one of the company's most popular and longest-lived game series, and the Mega Man character itself remained the company's mascot into the 21st century.

By then, the company had been joined by Yoshiki Okamoto, a young designer who had started his career with rival games maker Konami (of Teenage Mutant Ninja Turtles fame). Under Okamoto's direction, Capcom developed a new game which was later to revolutionize the video gaming world. That title, Street Fighter, was initially launched as a video arcade game, achieving mild success and inspiring the company to produce other fighting game titles, including Final Fight, released in 1989. That title was also released on the NES platform. In that year also, the company merged Capcom and Sanbi to form the new Capcom Company. The following year, Capcom went public, listing on the Tokyo Stock Exchange.

By then, Capcom had begun developing the follow-up to the earlier Street Fighter. In 1991, the company released Street Fighter II as an arcade machine. The new version of the game singlehandedly establishing the "beat 'em up" fighting game format as the motor for the video game industry as a whole. Importantly, the Street Fighter II arcade game replaced the former two-button system with a six-button controller, enabling the player to perform a wide range of fighting moves. At the same time, the game featured an innovative two-player mode. Street Fighter II became a worldwide success, inspiring international competitions and placing Capcom at the top of the gaming industry. The company quickly capitalized on the success of Street Fighter II, launching a version for the newly released Super NES game console in 1992. That title went on to become one of the best-selling video game series of all time and helped boost the company's sales past $550 million by the end of 1993.

Capcom capitalized on its Street Fighter success, expanding into other markets, notably the production of films and animated series. In 1994, the company released Street Fighter II as an animated film; that version was shortly followed by a Hollywood film featuring Jean-Claude Van Damme. By 1995, the company had also developed an animated series based on the Street Fighter II franchise.

COMPANY PERSPECTIVES

Our principle is to be a creator of entertainment culture. Through development of highly creative software contents that excite people and stimulate their senses, we have been aiming to offer an entirely new level of game entertainment. Our management objectives are also on strengthening relationships with shareholders, clients and our employees to satisfy demands and to bring about prosperous benefits.

While the "beat 'em up" genre had put Capcom on the global gaming map, the company remained focused on developing new game franchises. The development of the next-generation video console systems, especially the launch of the Sony PlayStation in the mid-1990s provided the company with the technological base to develop an entirely new type of game. Launched in 1995, Resident Evil established a new "survival horror" genre, and quickly gave the company a new international success. The Resident Evil title, which targeted a more adult public (and was rated for players over the age of 17), sparked another long-running franchise for the company. The title was also developed into a Hollywood film in 2004.

Capcom also built up its corporate infrastructure during the 1990s, acquiring Yunika Co. Ltd. in 1991. That subsidiary's name was changed in 1993 to Captron Co. Ltd., and became responsible for developing Capcom's real estate interests, and especially its venture into the operation of game arcades. In 1993, this led to the opening of Capco Circus Nigata East, that city's largest arcade center. In that year, also, the company added its first Asian-region subsidiary, Capcom Asia Co., based in Hong Kong.

On the international front, Capcom expanded its presence in the United States, adding distribution and production subsidiaries Capcom Coin-op, Capcom Entertainment, and Capcom Digital Studios. During the 1990s also, the company expanded its arcade operations to the United States, opening a number of arcade centers in California and Illinois. The company expanded its foreign operations to Europe in 1998, forming subsidiary Capcom Eurosoft in the United Kingdom that year. That subsidiary was later joined by a second U.K. operation, CE Europe, in 2002, and by CEG Interactive Entertainment, based in Germany and opened in 2004. In the meantime, the company expanded into South Korea, forming subsidiary KOKO Capcom Asia Co., Ltd. in 2001.

NEW GAMING PLATFORMS FOR
THE NEW CENTURY

In the late 1990s, Capcom launched a new games development subsidiary, Flagship Co., which was charged with developing new game scenarios. Launched in 1997, Flagship helped Capcom develop such successful titles as Dino Crisis, for the PlayStation, and especially Onimusha, for the new PlayStation 2. Released in 2001, Onimusha became the first game title for that platform to sell more than one million copies. That year saw the launch of another strong seller for the company, Devil May Cry, as well as the company's first titles for the new handheld console, Gameboy Advance. By 2002, the company had also expanded its offering to include the newly released Xbox, from Microsoft.

While Capcom continued to enjoy the successful rise of the video game console market, which had rapidly overtaken the film industry as the world's top entertainment sector, its arcade operations faced a steadily declining market in the United States. In 2003, the company announced its decision to exit that market, shutting all of its U.S. arcade centers by the end of 2004. The company's arcade operations remained strong in Japan, however.

Into the mid-2000s, Capcom took steps to adopt its game operations to the fast-changing technological landscape. The company targeted the online and broadband markets, signing an agreement with Club iT Corporation to bring its games to the G-cluster Gaming on Demand platform at the end of 2005. In another extension, the company launched the production of trading card games in 2006.

KEY DATES

1979:
Kenzo Tsujimoto founds IRM Corporation to produce arcade gaming systems.
1981:
Company forms Japan Capsule Computer Co. to produce games for video console systems; changes name to Sanbi Co.
1983:
Subsidiary Capcom Co. is formed as distribution arm.
1984:
Company releases first in-house developed arcade game, Vulgus.
1985:
Company forms subsidiary in the United States.
1987:
First Street Fighter title is unveiled for arcade market.
1989:
Sanbi and Capcom merge to form Capcom Co.
1991:
Capcom lists stock on Osaka Stock Exchange; releases Street Fighter II, revolutionizing arcade game sector and later video console sector; acquires Yunika Co. (later Captron Co.).
1993:
Company launches subsidiary in Hong Kong.
1996:
Capcom releases Resident Evil, another groundbreaking video game title.
1998:
Company forms U.K. subsidiary Capcom Eurosoft.
2004:
Capcom opens German subsidiary CEG Interactive Entertainment.
2005:
Company creates dedicated Mobile and Interactive Games division.
2006:
Company acquires Canadian mobile games developer Cosmic Infinity.

At the same time, Capcom recognized the growing potential of a new gaming market, that of the mobile gaming sector, primarily through cellular telephones. The company's first move came in 2004, when the company reached an agreement to supply Java-based titles for the i-mode cellular telephone services offered by DoCoMo, Bouygues Telecom, KPN, and others. By 2005, the company had formed a dedicated Mobile and Interactive Division, with plans to adapt many of its most popular titles for the smaller format. By 2006, Capcom's mobile gaming effort gained momentum, as the company announced its acquisition of Canada's Cosmic Infinity. That company specialized in creating games for the mobile telephone market, and also brought Capcom its license for the mobile game based on the popular Who Wants to Be a Millionaire television program. Capcom expected to accompany gamers wherever the future took them.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

Capcom Asia Co., Ltd. (Hong Kong); Capcom Charbo Co., Ltd.; Capcom Entertainment, Inc. (U.S.A.); Capcom Studio 8, Inc. (U.S.A.); Capcom U.S.A., Inc.; Captron Co., Ltd.; Ce Europe Ltd. (U.K.); Ceg Interactive Entertainment Gmbh (Germany); Clover Studio Co., Ltd.; Flagship Co., Ltd.

PRINCIPAL COMPETITORS

Sega Sammy Holdings Inc.; Nintendo Company Ltd.; Hasbro Inc.; Electronic Arts Inc.; Namco Ltd.; Activision Inc.; Ubisoft Entertainment SA.

FURTHER READING

"Capcom Goes Broadband," GameNow, November 1, 2003.

"Capcom Honcho Calls It Quits," GameNow, September 1, 2003.

"Capcom Plans New Mobile and Interactive Division," Wireless News, November 15, 2005.

"Capcom Soft on Europe?" AB Europe, July 2001, p. 7.

"Capcom Spins off to Bolster Stability," AB Europe, June 2000, p. 9.

"Capcom to Withdraw from Overseas Arcade Operations," Japan Toy and Game Software Journal, March 25, 2003.

Eisenstodt, Gale, "That Is Where the Money Is," Forbes, January 18, 1993, p. 56.

"Moody's Upgrades Rating on Game Maker Capcom," Japan Weekly Monitor, October 15, 2001.

"Okami (Capcom Company Developing New Computer Games)," Electronic Gaming Monthly, January 1, 2006.

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