Capcom's latest financial report has revealed that the publisher experienced a growth in profit of more than 90 per cent last year - but that hasn't prevented the closure of a major in-house development studio.
For the year ended March 31st, Capcom recorded profits of YEN 6.9 billion (EURO 48.2 million), up from YEN 3622 billion (EURO 25 million). Sales stood at YEN 70.3 billion (EURO 492 million).
Capcom attributed its success to the popularity of titles such as Resident Evil 4 and Monster Hunter 2, plus the increase in demand for handheld games such as Mega Man Network 6 and Phoenix Wright: Ace Attorney.
"One of the major contributors for the growth was the new portable game consoles which generated a buzz in the market and played a central role in the diversification of the customer base by attracting female and novice game players," the report reads.
However, Onimusha: Dawn of Dreams, Without Warning and Beatdown performed below expectations, particularly in the West. In fact, US operating income was down 87.9 per cent as sales decreased by 18.3 per cent. In Europe, operating income fell by 89.6 per cent - despite a 9.3 per cent rise in sales.
The report confirms that Capcom has closed Studio 8, the development studio responsible for the Maximo games on PS2 and, most recently, Final Fight: Streetwise. Around 20 people have been made redundant as a result. Distribution subsidiary Capcom Eurosoft is also being shut down.
"The video game industry experienced a favourable growth in general while it was going through the period of 'generational shift', the transition of hardware to the next-generation stationary game consoles," the report reads.
"It is possible that the existing market share alignment will be totally redrawn as the competition over the market initiative in the game industry becomes further intensified. The launch of the advanced and sophisticated game hardware will result in an urgent need for software makers to address the problem of increasing development costs."