Capcom “On Average” Can Recoup Development Cost a Year and a Half After a Game’s Release

With game development and marketing budgets ballooning to astronomical proportions that just seem fiscally unsound, one company that doesn’t seem to have this problem is Capcom.

It seems that even if the company releases high-profile, AAA games, they have a sound plan on how to properly recoup development costs, and that’s not by not following the industry standard. In a newly released translation of an investor Q&A that was conducted last month (thanks, Game File newsletter!), Capcom mentioned how they don’t follow the industry trend of spending large amounts of money on advertising and promotions just before and after release to kickstart initial sales. Not only that, but the publisher also shared that “on average,” they can recoup development cost of their games in just one and a half year from release.

Capcom Confirms They Can Usually Recoup Development Costs for Their Games in Less Than Two Years’ Time

Recently, there has been a trend in the industry of spending large amounts on advertising and promotions just before and after release to kickstart initial sales, but we have not traditionally used such methods. We calculate the costs for promotions based on expected performance and take a long-term approach to sales. On average, we can recover development costs within about one to one and a half years after release, so even if we lower the selling price afterward, once costs are recouped we expect profit margins of 80-90%. Our marketing approach remains unchanged.

While not all of Capcom’s releases have been hits, I have to admit, this kind of approach to game development does seem a lot healthier than just outright spending loads of money on ads, content creators and whatnot.

As a whole, it seems to be working for Capcom, as not only is Resident Evil 4 now at over seven million units sold, but even a more obscure title like Dragon’s Dogma 2 is commercially considered a success with over 2.6 million units sold to date.

With countless layoffs, project cancellations, and even studio closures happening this 2024, Capcom seems to have weathered the storm, and we’re hoping this continues well into next year.

Related Reading From MP1st:

• Silent Hill Creator Keiichiro Toyama Sees Himself Collaborating With Resident Evil Creator Shinji Mikami in the Future
• Shinji Mikami Praises Resident Evil 4 Remake, Saying Capcom Improved the “Half-Assed” Story He Wrote in “Two Weeks”
• Rumor: Resident Evil 9 Protagonists to Be Leon and Jill, Will Feature Open-World Elements

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