Capcom is for Sale and What That Means to the Gaming Landscape

By Aaron Collier

Photo: Infendo
Photo: Infendo

Last week it was announced that Capcom voted against renewing their takeover defense, and was essentially putting a “For Sale” sign on the front door.

Takeover defense is a common practice that allows a company to block a third party from becoming the majority stock holder. The way it does this is by making the approval process almost impossible for the potential buyer to navigate.

Think trying to beat any proper Mega Man installment…without dying.

Keiji Inafune/Photo:Wikipedia
Keiji Inafune/Photo:Wikipedia

I’m not a business man by any stretch, but it doesn’t take a stock portfolio to know that the major video game hardware companies are looking at their bank accounts and daydreaming about buying a true mainstay in the video game industry. Capcom has some of the most identifiable characters in all of gaming. Mega Man, Street Fighter, Resident Evil, and Phoenix Wright: Ace Attorney are all owned and published by Capcom. In the case of Mega Man, Street Fighter, and Resident Evil you are getting an established property in not only only games, but comics, animation and film.

This isn’t just a game company: It’s a multimedia company.

But it’s no secret that Capcom has struggled as of late. They haven’t exactly used their properties to their fullest extent in a long while (Mega Man, Breath of Fire series), lost some long standing creative minds (Mega Man creator Keiji Inafune and Street Fighter/Final Fight creator Yoshiki Okamoto), and have released some less than quality sequels (Resident Evil 6, Lost Planet 3).

The biggest issues for Capcom are the bottom line and those few reasons above, among others we don’t know about. Those issues aren’t helping Capcom get out of the red. Kotaku reported that in 2012 Capcom lost 47.2% of it’s operating income and Nintendolife reported that the company posted a 37.3% drop in profit during the last half of 2013.

I don’t even know what all that means, but when you lose nearly 50% of something called “operating income” it doesn’t take a genius to figure out your ship may be sinking.

Even with all the financial trouble, Capcom’s properties could yield major dividends for the major gaming companies. Nintendo, Sony, and Microsoft could all benefit from the purchase of Capcom and bringing in the intellectual properties the company was build upon to only their respective consoles.

But who would benefit the most?

MM10-MegaManmegamanwikia
Photo: Mega Man Wikia

The first in line with a bid in hand should be Nintendo. Even though they had a great E3 this year, the company is still looking for a boost after the terrible handling of the Wii U. If Nintendo could buy Capcom it would give them more than enough software to make people run out and buy the console. You want to play Street Fighter? Only on Nintendo. You want to play the new Mega Man? Only on Nintendo. What about Resident Evil? That’s right. Only on Nintendo. It would automatically put the Wii U in competition with Microsoft and Sony and make the console a viable first option instead of a second fiddle.

Nintendo would have the strongest and most recognizable exclusives lineup of any of the consoles. Most of the Capcom properties made their names on Nintendo (Mega Man, Bionic Commando) and it would also give them some mature titles that sometimes the company lacks. Resident Evil, Dead Rising, and Devil May Cry would all add some edgy titles to the Wii U and 3DS libraries. Having these titles under the Nintendo banner also helps to alleviate some of the pressure to get third part developers to create content for the console. They would have full first party stack of games to add to their already second-to-none first party characters. Third party devs would lineup to get their games on the system.

Sony would be a great suitor and just add to their forward momentum in the current console war. Street Fighter would be an amazing exclusive to have and give Sony, with Tekken already in house, two premier fighters that are playable only on the Sony platform. Throw in the Devil May Cry and Resident Evil returning to their platform of origin, add Phoenix Wright becoming a Vita exclusive, and Sony would increase it’s lead in the console race.

Photo: Game Planet
Photo: Game Planet

 

What would also make for an intriguing idea is for Sony to continue to cultivate their relationship with Indie developers by letting them take on some of Capcom’s classic titles such as Mega Man, Final Fight, and the Ghosts and Goblins series. It would breath new life into familiar properties by letting fresh minds take a shot at established titles and possibly setting up those properties for full proper releases down the line as well.

Then there is Microsoft.

 

Before I start, I’m not a Microsoft hater. Not by any means. The original Xbox and the Xbox 360 were my consoles of choice the past two console generations.

But I really hope they don’t get Capcom.

I have no doubt in my mind they will make a play for the company. I can almost guarantee they are crunching the numbers as you read this piece. And they have the money to buy the Capcom without even blinking, but Microsoft buying Capcom would be one of my worst gaming nightmares.

My reason: Rare Ltd.

Photo: Wikipedia
Photo: Wikipedia

When Microsoft bought Rare, who was an essential piece to both the SNES (Donkey Kong Country series) and N64’s (Banjo Kazooie, Goldeneye) successful runs, there was a lot of excitement at what this company could do for the Xbox.

What did Microsoft do with them? Nothing really and it was more than disappointing. We did get a Conker remake with Reloaded. We got a downloadable Banjo Kazooie and Perfect Dark. And don’t forget, Kinect Sports. But no proper release of any of the classic Rare properties.

In short, terrible use of a great developer.

Would Microsoft benefit from buying Capcom? No doubt. Would they take care of the properties? I want to believe they would, but I don’t think they know how.

ghostsngoblinhardcoregaming101
Photo: Hardcore Gaming 101

Capcom was a huge reason for the success for both Nintendo and Sony. Both companies, in my opinion, would take care of each property and know how to develop them to be successful. I don’t think Microsoft would know how to do that. I’m not saying Microsoft doesn’t know how to run successful studios, both 343 Industries (Halo 4, Reach) and Black Tusk Studios (Gears of War) have been great under the Microsoft umbrella. But the handling of Rare wasn’t pretty and I’m afraid the same would happen to Capcom.

I’m sure Street Fighter, Devil May Cry, and Resident Evil would be fine, but properties like Mega Man, Bionic Commando, Breath of Fire, and Phoenix Wright might not be handled as properly. I just don’t believe that most of Capcom’s properties would fit the Xbox image and would just sat on shelf somewhere to gather dust. Microsoft likes sure things, like Street Fighter and DMC, and I don’t see them having the ability or patience to cultivate the rest of Capcom’s properties into quality games. I may be wrong, and if Microsoft does end up acquiring the company, I hope I am.

Whoever pays for Capcom, it’s going to be interesting to say the least. They would have a group of properties that would give them a huge leg up in the exclusives category and thus gain ground in the console battle if they are used and marketed right.

I do know one thing for sure: I wish I had a bigger piggy bank.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s