Arcade Antics
09-30-2002, 01:40 PM
Just rumor for now, but... sad.
Capcom profit warning fuels buy-out rumours
Rob Fahey 11:17 30/09/2002
Vultures closing in as one of Japan's finest scales back operations
New guidance for the financial year ended March 2003 has been released by Capcom, showing the company posting a loss of 12.7 billion Yen (€106m) - a massive swing from previous estimates, which had anticipated a profit of around 3.8 billion Yen (€31.7m).
The difficult financial status of the company - which is also thought to have significant debts - has caused widespread rumours that it may now be an acquisition target for more cash-rich companies seeking to expand their development base in Japan. Capcom is an attractive target, particularly for platform holders, due to its extensive range of popular franchises such as Resident Evil, Onimusha and Streetfighter.
As ever, the main predator is thought to be Microsoft - who has reportedly sent a team over to Japan for discussions with Capcom's senior management. However, Nintendo is also thought to be in the frame, with the Kyoto-based company keen to continue its newly forged development relationship with Capcom, whose Resident Evil titles have given the GameCube much-needed credibility in the adult market.
Both companies could certainly afford to bail Capcom out without being in any danger of breaking the bank - and certainly, the money Microsoft has just paid Nintendo for its stake in Rare would be considered well spent on a venture like this. Nintendo is not traditionally acquisitive, but much has changed at the company since Satoru Iwata took the reins from long-serving president Hiroshi Yamauchi earlier this year, so the possibility cannot be discounted. Microsoft, meanwhile, certainly has the resources to swallow Capcom, and the desire to break into the Japanese market in a big way; however, the company has had no success in convincing Japanese publishers to sell in the past, despite highly publicised approaches to the likes of Sega and Square.
The drastic reversal of Capcom's fortunes is thought to be mostly due to some very bad investments in the Japanese property market on the part of the company. Japan's economy is intrinsically linked to the value of property, and the downturn experienced by the country in recent years has depreciated property massively, especially in the Tokyo area.
It's probably wise to consider any rumour of a buy-out in this instance with a hefty pinch of salt. Microsoft's name is generally associated with any company that underperforms in the games industry at the moment, but in fact, the Seattle-based giant has only acquired successful companies such as Rare, sensibly leaving those in dire financial straits aside. While Capcom would certainly be an attractive prospect for MS, and it is no doubt making investigations into the possibility of a purchase, it's far too early to seriously consider the prospect of a Microsoft-owned Capcom.
Source:C&VG, Nikkei Interactive and others
Capcom profit warning fuels buy-out rumours
Rob Fahey 11:17 30/09/2002
Vultures closing in as one of Japan's finest scales back operations
New guidance for the financial year ended March 2003 has been released by Capcom, showing the company posting a loss of 12.7 billion Yen (€106m) - a massive swing from previous estimates, which had anticipated a profit of around 3.8 billion Yen (€31.7m).
The difficult financial status of the company - which is also thought to have significant debts - has caused widespread rumours that it may now be an acquisition target for more cash-rich companies seeking to expand their development base in Japan. Capcom is an attractive target, particularly for platform holders, due to its extensive range of popular franchises such as Resident Evil, Onimusha and Streetfighter.
As ever, the main predator is thought to be Microsoft - who has reportedly sent a team over to Japan for discussions with Capcom's senior management. However, Nintendo is also thought to be in the frame, with the Kyoto-based company keen to continue its newly forged development relationship with Capcom, whose Resident Evil titles have given the GameCube much-needed credibility in the adult market.
Both companies could certainly afford to bail Capcom out without being in any danger of breaking the bank - and certainly, the money Microsoft has just paid Nintendo for its stake in Rare would be considered well spent on a venture like this. Nintendo is not traditionally acquisitive, but much has changed at the company since Satoru Iwata took the reins from long-serving president Hiroshi Yamauchi earlier this year, so the possibility cannot be discounted. Microsoft, meanwhile, certainly has the resources to swallow Capcom, and the desire to break into the Japanese market in a big way; however, the company has had no success in convincing Japanese publishers to sell in the past, despite highly publicised approaches to the likes of Sega and Square.
The drastic reversal of Capcom's fortunes is thought to be mostly due to some very bad investments in the Japanese property market on the part of the company. Japan's economy is intrinsically linked to the value of property, and the downturn experienced by the country in recent years has depreciated property massively, especially in the Tokyo area.
It's probably wise to consider any rumour of a buy-out in this instance with a hefty pinch of salt. Microsoft's name is generally associated with any company that underperforms in the games industry at the moment, but in fact, the Seattle-based giant has only acquired successful companies such as Rare, sensibly leaving those in dire financial straits aside. While Capcom would certainly be an attractive prospect for MS, and it is no doubt making investigations into the possibility of a purchase, it's far too early to seriously consider the prospect of a Microsoft-owned Capcom.
Source:C&VG, Nikkei Interactive and others