Sadly my brothers, this is a battle where we have more chances of losing than winning.
This is a real sensitive issue in the community, so I just want to share my point of view.
Let me start by saying that I hate the power these corporations have over the consumer and how poorly our satisfaction is addressed, when it should be their number one concern.
Now, I don’t know how Capcom operates internally, but the truth is that no matter what you and I do, at the end of the day every business decision comes down to financial numbers.
With that said, let’s talk some Business Administration and Accounting.
The basic accounting equation is:
Assets = Liabilities + Stock Holders Equity
In the case of Capcom this translates into:
($1.178 Billion = $422.2 Million + $755.8 Million) in US dollars based on their 2011 Balance Sheet numbers, which you can find in the following link:
http://investing.businessweek.com/businessweek/research/stocks/financials/financials.asp?ticker=9697:JP&dataset=balanceSheet&period=A¤cy=US%20DollarThe 2011 key figures in the Balance Sheet are:
$456.2 Million of Cash in Hand (a Huge amount)
$152 Million in Accounts Receivable (Money owed to them – another plus)
$118.7 Million in Accounts Payable (Operating Expenses/ Bills to Pay – which is significantly low)***
$55 Million in Short-Term Borrowings/ Short Term Debt (very low)
$53.5 Million in Long Term Debt (extremely low)
$299 Million in Retained Earnings (Money to be invested back into the company – significantly high)
These are all great numbers and their Income Statement is even more impressive:
http://investing.businessweek.com/businessweek/research/stocks/financials/financials.asp?ticker=9697:JP&dataset=incomeStatement&period=A¤cy=US%20DollarThe 2011 key figures in the Income Statement are:
$1.273.2 Billion in New Revenues (Highest in 4 years)
$486.1 Million in Gross Profits after Cost of Goods (Huge - 38% Margins)
$101 Million Net Income Positive (Great)
Their 4th Quarter produced their highest revenue and their fiscal year ends in March, which means that Marvel vs. Capcom 3 was a huge success, selling over 2 Million units in one month, as per the news article below:
http://www.eventhubs.com/news/2011/may/06/capcom-has-terrific-year-financially-net-income-257/This, along with the success of the Street Fighter 4 franchise, bumped their Net Income by 279% ($101 Million) from $28 Million in 2010, which allowed them to pay $26.9 Million in dividends (money back) to key investors in a time where the global economy is shaking, as seen in their Statement of Cash Flows below:
http://investing.businessweek.com/businessweek/research/stocks/financials/financials.asp?ticker=9697:JP&dataset=cashFlow&period=A¤cy=US%20DollarMY POINT IS:
This is an incredibly solid company which has had its best year in the last 4, so Capcom has very little chance of disappearing even if they make a mistake and don’t please the fans.
Now, for the looks of it, Ultimate Chocolate was not a mistake at all because their stock has almost doubled since the announcement of that game and Street Fighter x Tekken, as seen in the graph below.
Also, we can conservatively estimate, based on all of the hype and people that have openly welcomed Ultimate MvC3, that at least 60% of the people that bought the original will buy the update, and looking again at the numbers above, this means that even then they can expect a profit. Plus, you can expect Capcom to reallocate bandwidth and server resources from the original to support the new one and alleviate expenses, which will force people to upgrade.
Keep also in mind that the ones that decide if a project is worked on or not are the white collar executives, not lead designers or programmers. The last two just follow directives from the executives with typical constraints as time to market and low budgets. White collars allocate budgets based on success rate and make decisions based on revenue, or as is more commonly known based on:
SUPPLY AND DEMAND
In other words, in paper, they have made a great business decision in making Ultimate MvC3, and you will not hurt Capcom by not buying Ultimate Chocolate, nor will you let the white collars know that you expected more. What you can really risk or get out of it is for the executives to scratch the next MvC3 or MvC4 installment all together because of low profits, or push it out far enough that will make the fans demand the next supply.
What you really need to do is buy it so they know that there is demand and that the franchise is alive and well, which will give us more installments. Now, if you want the product details to be addressed differently, like including Mega Man, Spectator Mode, etc, you need to communicate your opinion directly to the lead designers, magazines, important blogs, and public relation individuals like Seth Killian. They work on the details of the project and can communicate to the white collars to let them know that a higher budget or more resources are needed to please the fans which will result into more units sold, which will produce more revenues.
The truth is that if we don’t buy we risk losing the franchise, but if we buy we can gain more attention which can translate into better quality.
PS. I’m sure Acey can corroborate all of this, since he also has an accounting background.
I completely agree with you, it's all about timing. I just need to keep practicing...
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