The second restructuring: the recoil from over-investing in mobile (2012)

What a second restructuring revealed

As the label “second” makes plain, this was not Capcom’s first restructuring. If the first, of 2003–04, was a “defensive” reform that brought development and sales under management control, the one in 2012 can be read as a painful exercise in selection and concentration after a bet on a growth market backfired. Posting a 55% profit decline in the year after a record-sales year brought home to the company how an investment in a growth field could shake its core console business.

Ironically, the lessons of the mobile business it cut loose here seem in part to have pointed the company, a few years later, toward another technology investment — the RE Engine. Whether it could admit the failed investment while the financial wound was still shallow, and re-narrow its focus, was arguably one cause of the later run of twelve straight years of profit growth. The founder’s phrase, mi-no-take management, looks to have been tested at precisely this moment.