Capcom has posted a special loss of ¥7.2 billion ($73.3 million USD) due to cancellations of titles in development. In response, Capcom has dropped its forecasted profit from ¥6.5 billion ($66.2 million USD) to ¥2.9 billion ($29.5 million USD). According to information sent to Capcom investors, the drop is due to excessive outsourcing of low quality games, a slow response to expanding digital markets and poor coordination from its marketing and development divisions.
Specifically, the investor report mentions a "decline in quality of titles outsourced to overseas developers" as its major issue. For this reason, Capcom has cancelled current projects that had been outsourced to third parties, due to an internal review determining that these games are incompatible with the company's new focus.
To improve, Capcom will use a three-pronged plan: Move game development in-house to increase quality, strengthen their digital strategies and improve coordination within the marketing and development divisions.
Source: [GamesIndustry International]