Capcom acknowledges that digital delivery has been a game-changer for the gaming industry, helping to offset the inherent risks through cost reduction and increased sales volume. The shift towards digital has been driven by consumer preference for convenience and publishers’ strategic pricing. Digital distribution allows companies like Capcom to implement frequent sales and discounts, not available through traditional retail channels. This strategy has proven successful for Capcom, contributing to a remarkable 10-year streak of consecutive year-over-year operating profit growth. The company attributes this success to the digital landscape, which has mitigated the volatility and risk factors it previously faced in international markets.
During a recent investor Q&A, Capcom management emphasized the transformative impact of digital on their business. Capcom’s sales data further highlights this trend. From FY17 to FY23, their game sales exhibited a 10.8% Compound Annual Growth Rate (CAGR), primarily driven by digital distribution. Digital sales represented 53% of total game sales in FY17, soaring to a staggering 93% in FY23, which ended on March 31, 2024. Capcom’s strategy of offering significant discounts on its games has been instrumental in this digital sales surge. In the investor Q&A, the company stated, “Regarding game software, we are working to capture new users globally by offering our catalog of past games at affordable prices, among other methods.” Capcom aims to achieve annual game sales of 100 million copies, and digital will play a pivotal role in realizing this ambitious goal.
