Capcom Crisis: Resident Evil 6 sales failure embodies publisher woes

Capcom has had to downgrade its earnings forecast for the fiscal year ending in March due to the disappointing sales of Resident Evil 6. The sequel is just the most recent in a string of high profile failures for a company in dire need of renewal.

Not for the first time and likely not for the last time, Capcom has had to downgrade its financial forecast for the financial year that ends on March 31, 2013. The delay of Monster Hunter 4, the latest sequel in the evergreen role-playing game that’s kept Capcom’s domestic business in Japan so healthy over the last decade, is in part responsible for the company’s downgraded expectations, but it wasn’t the primary offender. Resident Evil 6 is the real reason behind Capcom’s lowered expectations.

“Sales of the major new title Resident Evil 6 were initially strong, but subsequently weakened,” reads Capcom’s advisory to investors, “As a result, sales for this title are certain to fall short of the plan.”

Capcom’s expectations for Resident Evil 6 were certainly ambitious. At the beginning of the fiscal year, Capcom expected the latest entry in its long-running horror series to sell 7 million copies, more than three times the sales expectations for its closest expected bestseller, DmC: Devil May Cry. The expectation wasn’t unwarranted, however. Resident Evil 5 sold 5 million copies during its first two months of availability in 2009, a sell-through rate of 100 percent of the companies first shipment of the game.

Capcom crowed that it had shipped 4.5 million copies of Resident Evil 6 in October, but from the sound of things the company has struggled to translate those sales to retail outlets into actual game sales.

The publisher has over-promised and under-delivered on global sales forecasts in the past. In fiscal 2010, Capcom predicted that it would sell 2.2 million copies of Lost Planet 2, but the game sold so poorly that it was forced to downgrade its profit forecast by 41 percent. The year before, Capcom’s financial performance predicted 1.5 million in sales for Bionic Commando and 2 million copies for Dark Void, which in reality sold just 700,000 and 520,000 copies as a result. Capcom blamed the performance of those titles on handing new intellectual properties to Western developers (GRIN and Airtight Games respectively), swearing that only established franchises would be developed by non-Capcom studios in the future.

The risks of releasing didn’t damn those games, though. Resident Evil 6 is a sequel to one of the most successful franchises in video game history. Capcom needs to recognize that its every one of its major failures in recent years was caused by marketing-focused development. Capcom shifted away from taking creative risks like funding internal studios like Clover (Viewtiful Joe, Okami) during the past console generation and invested instead in trying to cater to establish tastes. As a result it drove away its best creators and was left with half-baked sequels to moldering IPs. It’s maintained a stable domestic business in Japan with portable games like Monster Hunter and Ace Attorney, but its international business continues to decline.

Capcom’s current plans are to expand even further into the international market. That’s all well and good, but unless Capcom can recapture the creative spirit that defined the company in the years before this console generation, it will continue to watch its games fail, just like Resident Evil 6.