Capcom shares surged 1,200% over past 10 years, with experts praising its strong back catalog sales
Capcom remains one of the most successful Japanese game companies. And the steady growth in its share price only strengthens the company’s position among competitors.
Capcom shares are outperforming its Japanese rivals
As reported by Bloomberg, Capcom’s stock is up by a third this year thanks to a streak of hit releases like Resident Evil 4 and Street Fighter 6. On top of that, it has grown by more than 1,200% over the past decade.
At the moment of writing, Capcom shares are trading at ¥5,664 ($40.34) per share. Some analysts set a target price of ¥6,400.
For comparison, here is how the share price of Capcom’s rivals in the Japanese games market has changed over the same period:
- Koei Tecmo — +841.7%;
- Bandai Namco — +528%;
- Square Enix — +396%;
- Konami — +246%;
- Sega Sammy — +34.6%.
Capcom shares surged 1,213% from July 26, 2013 to July 26, 2023
What are the factors behind Capcom’s impressive growth?
According to market analysts interviewed by Bloomberg, here are the main drivers of the Resident Evil maker’s growth:
- Sales of back catalog games account for 70% of Capcom’s revenue, which allowed the company to “break the cycle of earnings volatility that depends on big new releases”;
- Focus on underserved and developing markets, such as Brazil, Saudi Arabia, and Turkey, mixed with heavy discounts on classic titles;
- Selling games in 230 countries, the largest number among other Japanese publishers, with the goal of reaching 100 million units sold per year;
- Capcom was one of the first publishers to start porting its console hits to PC, increasing the popularity of its core IPs beyond their original platforms.
“Capcom’s focus on high-quality game production, back catalog monetization, multiplatform publishing and internationalization of its workforce in Osaka turned it into a rocket ship within a matter of years,” Kantan Games CEO Serkan Toto told Bloomberg.
Despite all the positive factors, experts believe that Capcom may face some challenges if its 82-year-old founder Kenzo Tsujimoto, who is credited with the company’s success, resigns.
Capcom’s financial results for Q1 2023
- According to its latest financial report, Capcom’s net sales reached ¥43.8 billion ($311.7 million), up 73.8% year-over-year.
- The growth was driven by strong sales of new releases (SF6, RE4) and back catalog titles.
- Operating income was ¥24 billion ($171 million), up 99.4% year-over-year. The company is now on track to achieve 11 consecutive years of full-year operating profit growth.
- During the three months ended June 30, Capcom sold 13.5 millon units of games (compared to 11.7 million in the same period last year).
