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Capcom posting profits, Namco losses; where do their arcade divisions stand?

Shaggy 12

It’s that time where we start to receive news about different public companies and their profit or loss over a certain period of time. These glimpes generally mention the arcade division of said companies in case they have them and that is the case with both Capcom and Namco, who we will discuss here. So how have their arcade divisions fared over the past nine months?

First off Capcom, who posted gains that were partly attributed to tax credits that the company was able to secure. One the arcade side: “Capcom’s arcade operations saw sales fall 11% but operating income was up more than 295% thanks to a “profitability improvement strategy.” This is talking about Capcom owned arcades and not Capcom-made and sold arcade titles. The jump in income happened despite the (paraphrasing slightly here) “Japanese economy not really seeing any recovery during the nine-month period, and consumer spending seemed to be in a slump…” Probably one of the more interesting things I find about Capcom’s report is how terrible their Wii game sales are, which is leading the company to scale back on developments for that system. This isn’t the first third-party developer I have heard of not making what they expected to off of Nintendo’s cash cow.

Link thanks to The Stinger Report

Next up is Namco, which doesn’t appear to be doing too well over these past nine months. The company saw a 76% drop in operating income during that time, loosing nearly $130million overall and they are expecting a full year loss of nearly $342 million. They have also announced that they will be laying off 630 employees. Whether this will affect their arcade divisions remains to be seen – according to the company, arcade game machines achieved “steady results” for the company along with their character toy sales. On the flipside however, Namco has two divisions dedicated to arcades – one to develop and sale games and another to operate arcade locations. According to the official report, “both the Visual and Music Content business and the Amusement Facility business posted sluggish results; the former owing to the downsizing of the visual package software market and the latter reflecting the significant effects of a slump in personal consumption.” That slump in consumption I believe is by Japanese consumers (as indicated by the first link above which mentions that specifically) but that might also include international market since I don’t know of consumption going up in most places. Either way it appears that Namco’s consumer (i.e. game console) division is where most of the trouble lays right now, with the only game showing strong results is the arcade port of Tekken 6.  Interesting how that works in a world where arcades are “dead” ,eh? With that in mind I really hope that they don’t go back to their ways of porting an arcade title over within a few short months of the arcade release however.

More info here (thanks Juan!):

Link 1 Link 2

While we’re speaking of Namco, I did find that there is a new account on Youtube called NamcoAmerica that currently features a promo video of Tank! Tank! Tank! and Go Go Grand Prix. I can’t seem to access their main site at the moment but it looks like they are jumping on the Youtube bandwagon, which is a good thing. here’s Go Go GrandPrix in case you missed that in our EAG coverage.

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12 comments
Smidget

“with the only game showing strong results is the arcade port of Tekken 6. Interesting how that works in a world where arcades are “dead” ,eh?”

umm..err..huh?

Arcades are “dead” BECAUSE of the strong console sales of games like Tekken. It’s not “interesting” at all. A great fighting game sequel in a long-lived series was released on consoles (as it’s been since PS1) and it sold well. The end. People haven’t stopped wanting to play good arcade games, that’s never been the argument. They can just get that arcade game experience in their homes now. This has specifically been the case with fighting games for a long time now. “Smaller” games being developed for platforms like Xbox Live Arcade are perfect proof of this. People still want the games, they just don’t need arcades to play them anymore.

Really, I wouldn’t recommend ever pointing to console game sales numbers for a game that was ported from the arcade as irony that arcades aren’t, as they say, “dead”. Or as a case for a good chuckle: “Interesting…,eh?” It’s just silly.

Reply
    Shaggy

    Interest in Tekken 6 was fueled by the arcade version. This is not a disputed fact. Whereever the game was found in arcades, it earned incredibly well and it helped sell players on the console version which translates into strong console sales. The point is this – out of all of Namco’s games, their strongest game was Tekken 6, which was an arcade title first, designed with those in mind. The arcade fighting experience is NOT the same at home – if players believed this, they would not be asking for Street Fighter IV or BlazBlue at the arcade but they do, all the time. Players build their own arcade sticks and hold tournaments together to try and recreate that arcade experience that they don’t get sitting alone at home playing someone over the internet.

    Even though people can download all sorts of classics at home, they will still play those games in the arcade. I have Asteroids Deluxe, Galaga, Pac-Man, Ms. Pac-Man and others and they are played constantly, even though you can play those games just about anywhere.

    I’m not saying that we need more console ports of arcade titles but I have been surprised by how console ports of certain games have turned around to increase interest in that game for the arcade. I also wasn’t sure what to expect when I bought a Blazing Angels arcade since that was on ever console but it has consistently been one of my top earners since I opened my arcade. So that is where I find it to all be interesting, because it’s not necessarily expected.

    Reply
      Smidget

      Thanks for the reply shaggy. And I apologize as re-reading my comment, it came off more brazen than I intended. I think, being one of those directly affected by the closing of arcades in my area, I tend to be on edge to start with when reading, on a regular basis, individuals saying that arcades aren’t dead. Because for me (and the arcade scene that used to be huge here), they have been for a long time :/

      And really, an article on vs. games was NOT the best choice for me to try to speak my mind. You’re absolutely right, vs games are their own world and they are most definitely staying alive in arcades with high demand and a devoted worldwide community. Believe me, if you had opened your arcade up in my city, I’d be one of those people asking about SF4 and doing whatever I could to help. I lived and breathed arcades for quite a while and know the culture that comes with it, most especially in the vs. fighting world. I knew when typing my original comment that not expanding on that would bite me in the ass, and it did…

      I do still think that stand-alone arcades such as yours are becoming rarer which, to me, is the same thing as saying they are “dying.” Doesn’t mean new ones aren’t opening still (yours, Arcade UFO), just that they are few and far between. I’m glad yours is doing well.

      Reply
        Shaggy

        No worries, I wasn’t offended or angry myself either. 🙂

        I do understand where you are coming from and you are right – the state of the arcades can depend completely on where you live. I guess saying arcade life or arcade gaming itself is not dead is probably a better way to describe the situation. It hurts in some areas, thrives in others. As for “pure” arcades that basically eschew redemption, they are quite rare although there is a niche for that depending on where you live and if the arcade opens in a high foot traffic area. I do wonder how rare they are compared to a few years ago though – I’m not sure how long places like Super Arcade or Arcade Infinity have been around as they are similar.

        On a slightly related note, I have in my hand an earnings report on Terminator Salvation from location test. Wow. In one Japanese arcade it made $1,359 in one week whereas the Tank! Tank! Tank! (2p) made $672 and Razing Storm made $634 that same week at the same place. It’s doing great in the US and UK too. At the end of the day it’s all about the games and I hope to see more and more titles that are arcade exclusive as I think with enough arcade exclusive games, it makes it easier for arcade-only type places to not just survive but to thrive.

    arcads4ever

    I totally disagree with you smidget I still see people play arcade fighters where ever I go on holiday or other places that have fighters. There aren’t machines to be found and I’m sure people would play them if they knew about them. every time I fancied going on tekken 6 at the trafford centre’s namco station I could never get on it at all. fighters are just as fun in arcades just as much as consoles. there are still lots of good ideas that haven’t been thought of for the arcade fighter genre at the moment. if arcades are dead then why are people still opening them up and why was a brand new namco funscape opened up at gateshead if you say arcades are dead? …………………………hmmm thought so my point excatally. arcades and consoles can co exist and YOU SHOULDN’T EVEN BE ON HERE IF YOU’RE JUST GONNA SLAG OFF AN INDUSTRY THAT EVERYONES GETTING THE IMMPRESSION THAT ARCADE ARE DEAD WHEN THERE NOT BECAUSE OF ASSHOLES LIKE YOU WHO WOULD JUST RATHER CUT THEIRSELVES OFF FROM THE WORLD AND PLAY CONSOLE GAMES IN THERE DARK LITTLE ROOM. I love my consoles but I also love arcade games and while ever there still being made and played on you can just shut up 😛

    Reply
      Smidget

      You can read my reply to Shaggy to see my thoughts on the arcade fighter topic.

      As for the rest of your reply, the UK is a completely different market than the US. I didn’t specify the US market in my comment because when talking about the “arcades being dead” topic, it is generally always about the US. I love going to the Troc (London) and know that it is still thriving. I was there Day 1 when they got Street Fighter 4, bought directly off the show floor from ATEI. So this?:
      “OU SHOULDN’T EVEN BE ON HERE IF YOU’RE JUST GONNA SLAG OFF AN INDUSTRY THAT EVERYONES GETTING THE IMMPRESSION THAT ARCADE ARE DEAD WHEN THERE NOT BECAUSE OF ASSHOLES LIKE YOU WHO WOULD JUST RATHER CUT THEIRSELVES OFF FROM THE WORLD AND PLAY CONSOLE GAMES IN THERE DARK LITTLE ROOM.”

      I never slagged the industry, I was talking specifically about arcades in the US. Not FEC’s, just standalone arcades. This is not the arcade industry, it is the coin-op industry. I know full well that the coin-op industry is pushing forward. And I do view arcades and FEC’s as being very different.

      As for the second part of your comment, why do you feel the need to make insults like “…in their little dark room” blah blah blah. Sure, this is the internet, but you could at least try to not write like a 12 year old.

      Reply
    arcads4ever

    well I guess I see what you mean but even if arcades are dead I like to think of arcades as having a new home in places like bowling alleys, cinema’s, seaside resorts, airports etc.. after all its places like that where arcade were born from. I can see your point of view with stand alone arcades being dead but it really does vary acording to each location whether its in a good area, money/buget and easy to find and at the end of the day its all about money just like any other business, but arcades are still fun een to this day

    Reply
neil brimelow

I don’t understand why Namco is making a slot car game in 2010? This would have been fun in 1978, 1988, not 2010. I LOVE electromechanical games, but I surely would not want to invest thousands of dollars into a slot car game in the second decade of the twenty first century.

They should have done a virtual slot car game with a huge screen. It’s not like flat screens are expensive anymore. DLP or LCOS projection from underneath would work great and be cheap as well.

Reply
    arcads4ever

    yeah I’m too am disappointed with namco’s efforts, namco are really good at coming up with such original arcade games and they can do much better than this rip off even if it does look fun. if scaletris was invented and it was made between late 70’s to late 80’s it would’ve been so cool but not in this day and age.

    Reply
Shaggy

In regards to Go Go Grand Prix, here is an article discussing why they have done this – it’s to help bring more family entertainment into the market, which they first started thinking about when research showed how teen girls don’t care for arcades at all; it’s a pretty interesting read actually

http://coinoptoday.com/j/index.php?option=com_content&task=view&id=2263&Itemid=1

Reply
    arcads4ever

    very interesting read yet sad at the same time. however this is reality thoughand hopefully any arcade manufacture reading this will take this info into account although I find it a bit agsagerated a little as I see some teenage girls one some games particulary dance dance revolution and mariokart. the problem is there are too many gun violence games in the arcade and boy racers too. back before pacman was made girls didn’t like going to arcades at all but when namco invented pacman it got girls playing arcade games and other games like bubble bobble. arcade companies need to produce games that are aimed at any gender like pacman did and puzzle bobble and even more dance dance revolution, I still see teen girls in arcades but not as many apart from with families etc.. this is a great opportunaty for anyone in the arcade industry as its such a dead area and could prove very benificial with very little competition.

    Reply
      Shaggy

      The key is to create games that can appeal to both sexes, but that is a tough thing to do with solely racers and light-gun games. This is why I have advocated more puzzle games as those are easily approachable by anyone. Girls don’t often approach light-gun games and they will play racers but not as much as guys.

      It’s actually something I have been thinking about a bit lately – finding more titles that have that appeal but pickings are slim. I need to get around to purchasing a multi-slot Neo Geo so I can buy Puzzle Bobble and throw that in there with my KOF98. I also am tempted by games like Panda Family but I want to know how well that is being received in the US first before I make any decisions.

      I really like the idea behind Go Go Grand Prix because I enjoy seeing unique coin-op products. It’s too big for small locations but it’s still good to see them trying out some ideas that are basically old games with some modern twists.

      Reply