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Blog Posted in avatar   Maria Elisa Anacay's Blog

Gaming giant sales plummets: Outsourcing caused Capcom to lose its edge?

By Maria Elisa Anacay
Posted Apr 24, 2013 in Business
Gaming giant Capcom reveals staggering losses on its revised forecast for the previous fiscal year which ended last month. According to the report, the losses are attributed to a “delayed response to the expanding digital contents market,” “insufficient coordination between the marketing and game development divisions,” and “decline in quality due to excessive outsourcing.”
The Osaka, Japan-based publisher turned to the Western shores to develop its games as was publicized by this article aired by Shack News. In the article, Capcom R&D Head Kenji Inafune said “there are many independent developers overseas with genius development capabilities" as Capcom believed that collaborating with these organizations will strengthen the company's position and brand. As such, Resident Evil: Operation Raccoon City was developed by its Canadian partner Slant Six Games , which sold about 2 million units. Another famous title is Dead Rising 2, which was developed by Blue Castle Games, which sold over a million units. Capcom's collaboration with Blue Castle was so successful that the former bought out the latter and renamed the studio as Capcom Game Studio Vancouver.
Despite these previous successes with outsourcing however, it turns out that the publisher wants to move the development in-house as it announces that the halved forecasted profits will make way for the planned restructuring of the business. In a bid to improve the quality of games it publishes, Capcom strives to hire 1,000 new developers in the next decade.
Capcom's decision to do away with outsourcing may have negative implications for the business practice. Yet as many executives point out,outsourcing does more good than harm.
Image Credit: chaser324

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