| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 2909.48 | -26 |
| Intrinsic value (DCF) | 6227.02 | 58 |
| Graham-Dodd Method | 516.94 | -87 |
| Graham Formula | 2182.83 | -45 |
Capcom Co., Ltd. (9697.T) is a leading Japanese video game developer and publisher renowned for iconic franchises like Resident Evil, Street Fighter, and Monster Hunter. Founded in 1979 and headquartered in Osaka, Capcom operates across four segments: Digital Contents (packaged and digital games for consoles, mobile, and PC), Arcade Operations (Plaza Capcom amusement facilities), Amusement Equipment (gaming machine hardware), and Other Businesses (merchandising, esports, and media licensing). The company has a strong global footprint, with its games distributed internationally. Capcom is a key player in the Electronic Gaming & Multimedia sector, leveraging its deep intellectual property (IP) portfolio and a hybrid business model that includes both digital and physical game sales, arcade operations, and licensing. With a market cap of ¥1.74 trillion (as of latest data), Capcom is a major force in the gaming industry, known for high-quality titles and a loyal fanbase.
Capcom presents an attractive investment opportunity due to its strong IP portfolio, consistent profitability (¥43.4 billion net income in FY2024), and robust cash position (¥125.2 billion cash and equivalents). The company benefits from the growing global gaming market, particularly in digital content, where it has successfully transitioned to a higher-margin digital sales model. However, risks include reliance on hit-driven game releases, competition in the gaming industry, and potential volatility in arcade operations (impacted by macroeconomic conditions). The company's low beta (0.497) suggests relative stability compared to the broader market. With a dividend yield supported by a ¥40 per share payout and strong operating cash flow (¥36.9 billion), Capcom is well-positioned for long-term growth but must continue executing on game development to maintain its competitive edge.
Capcom's competitive advantage lies in its deep catalog of iconic franchises (Resident Evil, Monster Hunter, Street Fighter), which drive recurring revenue through sequels, remakes, and merchandise. The company has successfully pivoted to digital distribution, improving margins and reducing reliance on physical sales. Its focus on high-quality, single-player narrative games differentiates it from competitors emphasizing live-service models. Capcom's in-house RE Engine (used for game development) enhances efficiency and visual quality. However, the company faces intense competition from larger publishers with greater resources (e.g., Activision Blizzard, Electronic Arts). While Capcom excels in action and horror genres, it has limited presence in other popular categories like open-world RPGs or mobile gaming. The arcade segment, though niche, provides diversification but is sensitive to regional economic conditions. Capcom's mid-size scale allows agility in development but may limit its ability to compete in costly AAA multiplayer markets dominated by giants like Sony and Microsoft.