Capcom: Next Gen And Internal Development Won’t Increase Dev Costs

By Ishaan . May 22, 2013 . 11:50am

As previously reported, Capcom are putting an increased focus on internal development as opposed to outsourcing, in light of what they feel is a “decline in quality due to excessive outsourcing”.

 

Outsourcing is a common measure to cut down on development costs, so it would be natural to assume that moving more development in-house would be a significantly more expensive proposition. However, Capcom say that this won’t be the case, in a financial results Q&A.

 

“Bringing development in-house will not increase development costs,” Capcom said to those in attendance at the Q&A session. “We believe that, by being able to achieve clarity in scheduling and in budgetary control, and by aggressive hiring of new graduates and the effective deployment of the existing human resources within the company, we will be able to maintain roughly the same level of cost performance.”

 

“Furthermore, we aim to enhance the cost efficiency, not just in development, but for the company as a whole, by making progress with a comprehensive process of operational improvement and restructuring by reinforcing our overseas sales and marketing structure to complement this improvement in the efficiency of the development structure.”

 

Capcom also stated that they don’t foresee next generation consoles leading to an increase in development costs, as they believe that improving the efficiency of their development structure and making use of their new in-house engine, Panta Rhei, will help offset an increase in development expenses.

 


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  • UUDDLRLR BASTART

    Famous last words.

  • AnimeLeirus .

    Dragon’s Dogma 2???…

    • Always No. 9

      Yes, PLEASE! Give me a Vita installment as well and perhaps……only perhaps, I will forgive you Crumpcom for you Mega Man Legends fiasco…..* I GRANT YOU ICE’S BITE!*…#9

  • malek86

    Overall it might not lead to a (big) increase in development costs, but what about the sales potential? Chances are that PS4+X1 won’t sell as much as 360+PS3 did. That could mean lower sales for games, and lower revenue.

  • Raltrios

    Aggressive hiring? Well, that sounds good, at least. Some new jobs for prospective game developers is always good, even if it means being associated with Capcom, I guess.

  • badmoogle

    If that means no more NT and Slant Six then i’m happy.

    • Pockystix

      NT has pretty much had three strikes, unless they can find someone willing to give them a chance (and willing to whip them into shape) they are pretty much going to have to support themselves.

      • Fr33Kingdom

        To be fair haven’t platinum made more than three games that failed to light the world on fire sales-wise?

  • SunOatBoatMatadorQuattro

    I wonder what games are they planning to develop. The port of RE Revelations gives me the impression they want to do something about the franchise.

  • Göran Isacson

    On the one hand, this makes me worry they’ll push EVERYONE in the company as hard as they push Yoshinori Ono (unless they’re already doing that), but hopefully the cost efficiency enhancements they talk about do not center around being even BIGGER dicks to their employees. Still, having one engine to make the majority of your games in would probably be pretty cost-saving, though I wonder if they can scale this engine down so that it can produce good games for portable formats as well or if it’s solely a high-spec console engine.

    • DiosFancifulRomp

      Seriously, I don’t understand how they have the balls to say this to their investors, do they think of them as idiots? “Oh we’ll change the structure of making games and improve quality across the board and not spend a dime more!” That makes not sense from any perspective, and is a bunch of bullshit. Their employees are not going to work harder and longer for no extra pay.

      I see more developers fleeing Capcom in this next generation.

      • sandra10

        They’re trying to be more efficient meaning they want to be more productive given the same amount of time and money. It has to do with poor management and project strategies, not how hard the employees work.

        • Göran Isacson

          If the changes they’re talking about are related to their poor management, then by GOD do I ever welcome these changes.

        • DiosFancifulRomp

          I would be willing to accept this if they said that Next Gen development would not greatly increase in costs. That’s somewhat believable, and because you don’t agree with me, I’ll outline what I’m seeing in what Capcom is saying:

          1. Like you said, restructuring, which could improve management of resources.

          2. An increase in quality of visuals.

          3. Moving all outsourced work (of which we have no estimate how much is) to purely internal development.

          4. Our budget for games won’t rise AT ALL as a result of this.

          To me, this seems entirely improbable, and so optimistic it just seems pollyanna. Bringing in new workers can bring in fresh ideas, but also fresh problems. Employing new time and money management ideas could bring down costs, but then again, it could be absolutely no better. Then there’s the idea that Capcom will stop outsourcing, and somehow get the same work done for the same price of the cheaper outsourcing? That’s just absolutely ridiculous, and comes off as naive.

          The part where it really gets me is that they’re saying “We’ll change things” and that’s it. Nothing to justify their promises, just that they’re changing some things around, and it should pretty much even things out. It might not matter to you as a gamer (we’ll never really see the difference, I’m sure) but to an investor, you can bet this sounds bad. Promising things without providing explicit details is a poor strategy, that’s risk, risk, and more risk, and I can tell you that if there’s one thing investors hate, it’s this kind of risk right here.

          Restructuring, more employees, more work within the company, but about the same price? It could happen, but with the way Capcom is talking, it seems unlikely. Hopefully the consumer base doesn’t keep walking away this year, otherwise Capcom won’t have consumers to sell to. And they won’t, if the industry can’t keep its head above the water this year (just google NPD 2013 and see how game sales have been slowly dropping).

          • sandra10

            Their costs not rising during the nextgen is entirely probable if their costs for current gen games were unnecessarily bloated. Which they were.

    • Solomon_Kano

      They had a portable MT Framework, so I’d like to say they’ll probably have a portable Panta Rhei, but that’s not very likely. Given the power gap between the portables and the new consoles, they’d probably have to work a small miracle to scale that down.

      No, they’ll probably continue using MT Framework Mobile on handhelds. RE: Revelations is about the prettiest 3DS game around, so I think they can do to keep MT Framwork Mobile rather than putting the work into trying to squeeze Panta Rhei onto them.

      • Göran Isacson

        I see. I wonder if they’ll keep MT framework for WiiU games in that case, or if that console gets a Panta Rhei version too.

        • Solomon_Kano

          That’s a good question, actually. I could certainly see them sticking with MT for Wii U. With proper optimization it’d probably be the platform to get the most out of the engine, given its power of the PS3 and 360.

          I think if they do manage to fit Panta Rhei onto Wii U, it still won’t see the same games that PS4/X1 do. It would be a lose-lose for all involved. If they develop with the PS4/Xbox One in mind, the Wii U versions of games will be severely gimped. If they develop with the Wii U in mind, the PS4/Xbox One versions won’t be living up to their potential. And developing separate versions wouldn’t be worth the time and money, so… yea, I can see them keeping MT Framework for Wii U.

  • Solomon_Kano

    Huh. Sounds like they’ve planned accordingly for this transition. That’s good to hear.

    Looking forward to see what else they’ve got cooking on Panta Rhei.

    • DiosFancifulRomp

      Sounds more like next gen will just be a slightly nicer looking current gen. You can’t work your employees more for free, that’s not how things work. If anything, Capcom has just admitted that it has no clue what it is doing next gen. If I was an investor, I’d get out quick, Capcom will either suffer, or their employees will, and neither sound too profitable.

  • ShadowDivz

    aggressive hiring of new graduates

    JOIN CAPCOM NOW!
    A truck pulls up to your university and screams…

    • Sergio Briceño

      While old school Dante points Ebony at you.

    • Godman

      Or they’ll send Wolfpack after you XD

  • Gilgamesh2025

    Agreed!

  • https://twitter.com/Ni_Go_Zero_Ichi Project 2501

    I’m less concerned about whether next-gen development costs will be hard on mega-publishers like Capcom than whether they’ll be completely alienating to medium-sized developers like, I dunno, Atlus or From Software, who aren’t necessarily aiming to make multimillion-selling blockbusters. As I alluded to yesterday, my biggest fear about next-gen development is that it will only reinforce the high-stakes, risk-averse environment that dominated much of this generation, and further widen the gap between lavish AAA retail games and small-scale indie downloadable titles.

  • http://www.facebook.com/aly.hesham.7 Aly Hesham

    I like capcom.They are fast at cranking out content and don’t stick to stuff for too long , unlike Square Enix.

  • Sergio Briceño

    I keep reading the name of their new engine as “Panda Rey” for some reason, as in spanish for “King Panda”.

    Maybe is my engrish and spanglish at work.

  • SirRichard

    While that is good news in a way, the problem was that development costs were simply too high anyway. And if it wasn’t development costs, it was the excessive marketing bills racked up by larger titles that was ballooning sales expectations (though I don’t know if this was ever a problem with Capcom specifically). And as always, the sales expectations just being plain too high for what a series can reach is always present.

    The problem facing them in the next generation is how to keep up with the new technology, the newer power ceiling offered by new hardware, while still in some way keeping to a budget. Indeed, budgeting is Capcom’s biggest problem right now, at least from what was demonstrated by Resident Evil 6. Hopefully we don’t see a monster of a project like that again, as good as it’s done for itself, it never quite reached any sales targets.

  • Pockystix

    as long as we get Dragon’s Dogma 2, and it is everything and more, we’ll be cool.

    PS4 Monster Hunter would be swell too. . .

  • Death Saved

    aggressive hiring of new graduates

    Capcom Exec 1:Hey i have an idea, lets fire those 10 highly skilled individuals and hire a 100 new graduates for the same amount of money!
    Capcom Exec 2: Awesome idea! i mean sure it didn’t work for AMD but our ridiculous pride will make it work.

  • 60hz

    i’m all for less outsourcing but if you believe that next gen dev cost will not be greater to current gen dev cost… i got a bridge i can sell you…

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