Capcom Q1'22 earnings down 50%, but the company is not in trouble

Capcom's Q1 Fiscal Year 2022 results show significant drops in year-over-year earnings, but that's because Capcom is having a hard time competing against its previous record success.

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Companies not only compete with other companies, but they also compete with themselves. Investors, analysts, and companies are always comparing the current periods against past quarters or years for signs of growth.

So when Capcom delivered a record Q1 period in the FY2021 financial year, it set a new milestone that it would have a hard time breaking. This fluctuation between high points and stabilized earnings is typical of any games publisher.

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That's what's happening with Capcom's current Q1'22 performance. Based on data provided by Capcom and converted by us, the publisher's metrics are down by a significant portion. Net Sales are down 50% year-over-year to $217 million. This loss is because Capcom had two mega-hits during Q1 last year including Resident Evil Village and Monster Hunter Rise. Compare Q1'22 with, say, Q1'20 and you'll see this is actually an increase in earnings.

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Despite the drop, Capcom says its Digital Contents revenues were healthy, driven by Monster Hunter Rise Sunbreak, which has already achieved 2 million sales. Arcade Operations are also stabilizing as more people venture into malls and arcades to play games, and the Amusement segment is roughly flat.

Capcom says it is confident it will achieve record operating income growth through FY22.

Below we've compiled quarterly earnings data based on historical foreign exchange rates and public data from Capcom.

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