Capcom Investing in New R&D Buildings; Partnership with Tencent

Capcom - Ryu logo

Capcom’s trying to turn things around with new facilities… and a new partner.

Things haven’t been so rosy for Capcom as of late.  They reported a net income of 5,957 million yen (approximately $5.8 million US) on their 3rd quarter financial report for the 2013 fiscal year (the period ending Dec. 31, 2013), which was a 10.3% decrease from the same same period in 2012. People have been predicting doom and gloom for the house that Mega Man built, going so far as saying they’ll fold in another year or two. The company is hoping to change its financial fortunes with a couple of plays.

First, according to Joystiq, Capcom invested 79 million yen (or $8 million US) on two research and development buildings in Osaka. The hope is that these will help curb game development costs by keeping things more internal instead of farming it out to other developers (Joystiq also reported a while back that Capcom lost $7 million US due to game cancellations, which the company says is in part because of outsourcing game development to overseas companies). One of the buildings will be 8 floors tall and will be completed around January 2015, while the other will be 16 floors and be ready for January 2016. The R&D buildings will be home to about 1,000 employees fresh out of school; 100 new employees per year over the course of 10 years.

The other piece of Capcom news comes courtesy of Shoryuken, who report that Capcom is in talks with Tencent Holdings, and the two could be forming a partnership soon. Tencent, for those who don’t know, is the Chinese company who not only purchased League of Legends creators Riot Games for $400 million back in 2011, but worked with Activision Blizzard to bring Call of Duty games to China in 2012.

So what could this mean for Capcom? Well, with regards to the new buildings, I’m of two minds about it. On the one hand, I’m happy to hear that they’re eager to get hire up and comers. An injection of new blood into a company brings new perspectives, new ideas, and so on, which is so very important to keep things from becoming more stagnant. On the other hand, new blood won’t help anyone if they’re not allowed to flex their creative muscle. My fear is that those who’ve been with the company a number of years and who share the “old guard” mindset will tell these new kids, “This is how things have to be done, and you will abide by those rules.” In other words, even with fresh new faces, things will remain the same.

Then there’s the issue of spending all that money. The 8-floor building will cost 2.5 billion yen ($24.5 million US); the 16-floor 5.5 billion yen ($54 million). I mean, I guess we’ll find out how they fared last year when their full 2013 fiscal year report in early May, but I’m wondering if they can take that gamble.

As for the partnership with Tencent… hmm… it’s anyone’s guess as to what this could mean. Along with the gloom and doom, people have been whispering that some big company’s gonna come and outright purchase Capcom. Could that be Tencent? Or it could be like the Shoryuken article says, with Tencent helping Capcom get a bigger piece of the Chinese market? Maybe both?

What do you guys think of these recent Capcom happenings? Let me know in the Comments Section!


  • Tekknight

    I really don’t get Capcom’s deal. They are a top tier 3rd party developer who really kept it going. They milked the MegaMan series back in the early 2000s. Street Fighter 4 is a success. Monster Hunter, Dead Rising, Resident Evil. All big big names world wide. Capcom has made some of my favorite games ever. And now that fans WANT MegaMan, they won’t give him to us. They mistrust the market, not porting over games that would make them lots of money (Monster Hunter XBLA anyone?) They’re not even “forced” to finance a console like Sega was. Capcom has so many IPs to pull from and creative teams that it’s like they’re TRYING to fail.

    • Do you watch “The Jimquisition” over on The Escapist? Was gonna post it later in the week, but your comment got me thinking about the episode I watched yesterday:

      Essentially, there are only three types of games people are interested in (so says the almighty CEO and marketing people): Candy Crush, Clash of Clans, and Call of Duty. So if games don’t fall into line with one of those archetypes, then folks ain’t interested.

      My guess is that perhaps this mentality is slowly taking over at Capcom. Perhaps they feel that a lot of the games that made them what they are (save the recent wave of Street Fighter, but that’s probably because Yoshinori Ono is still at Capcom to fight for it) aren’t as big as they used to be, thus they either put them to bed (Mega Man) or change them drastically to adhere to what’s popular today (turning Resident Evil from survival horror to Michael Bay-light bombastic cover shooter; making Breath of Fire a Free-to-Play mobile MMO, etc.). This line of thinking causes those who probably want to keep doing those franchises the way they use to be to leave out of frustration (Keiji Inafune for example, or Koji Igarashi’s recent departure from Konami). Those left behind are then told to make games are simple to get into with microtransaction, or big Hollywood multiplayer extraveganzas that are yearly and will milk you for as much DLC as humanly possible.

      It’s sad that this kind of thing is spreading (forcing games to be pigeon-holed into one of those three genres).

      Then’s there’s the money loss with game cancelations, or games not being commercial successes (Remember Me didn’t do so hot)… it really is a mess over there :-/