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Europe kicks Capcom earnings hard

Japanese publisher Capcom has pointed to problems in Europe and banking issues after it transformed previous estimates for a healthy fiscal year into a massive loss.

The Japanese publisher lays blame squarely at the gates of Europe and a banking subsidiary for a huge swing from profit to loss.

Capcom has revised financial estimates for the fiscal year ending March 31 from a 4.2 billion yen (£21 million) profit to a 9.4 billion (£49 million) yen loss.

The company has pointed to 'strategic alterations' to its European operation and a major hit taken from its banking house, Status, and mainly from one debt made unrecoverable due to client insolvency. Status is now to be closed.

E3 is expected to be a telling time for Capcom, who is holding its line-up closely under wraps. Big name franchises such as Resident Evil, the fourth game of which is currently provoking admiring glances from all sectors, will almost certainly appear, but its backup is as yet unannounced.

The company has been involved in a lengthy internal restructuring, the latest announcement of which is the formation of Clover Studio, headed by development hero producer Atsushi Inaba of Viewtiful Joe fame. Clover is to be run as a wholly owned subsidiary in Japan, apparently to afford its creatives more freedom. Staff include those with teeth cut on the likes of Resident Evil and Mega Man.

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Patrick Garratt

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