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Capcom Looks At New U.S. Distribution Channels, Plans Expansion Of Arcades

Posted On: 7/25/2001

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SUNNYVALE, CA - Capcom Entertainment will remain active in the coin-operated market with new video games, including some for its CPS-II platform, and by adding new stores to its existing U.S. arcade chain.

Executives cautiously discussed these plans with V/T in late July; however, management of the U.S. subsidiary was unwilling or unable to say how many games would be released to the coin market this year, in what formats, using what technologies, or through what distribution channels. Other trade sources have quoted Capcom officials as saying video kits would be sold to operators over the Internet.

Speaking to V/T, Capcom PR manager Matt Atwood confirmed that Sega Enterprises USA will market and sell Capcom's new fighting title, "Capcom vs. SNK 2," to the North American market. This game runs on Sega's "Naomi2" hardware. Precise details of the marketing arrangement had not been determined at presstime, according to Sega and Capcom executives.

Atwood said "Capcom vs. SNK 2" will ship to the coin-op market in August or September, followed by release to the consumer market in November.

Atwood did affirm Capcom's intention to continue releasing games to the coin-op market, if only because such exposure provides useful test data for subsequent launching of consumer versions.

"We are still definitely supporting coin-op," he said. "We began as a coin-op company and we're not giving up on it. Many people don't want to see coin-op go away because it's a wonderful test market for us. Coin drop is a very quantifiable measure of a game's performance, and we learn a lot from observing gameplay on our new titles in the arcades. This information helps us port a title to the consumer platforms."

Atwood expressed Capcom's strong dissatisfaction with the existing U.S. distribution chain. "Coin-op is a troubled market," he told V/T. "The distribution channel is inefficient. Something's got to give. Coin-op distribution needs to be more professional and more disciplined, in line with the product channels that manufacturers enjoy on the consumer side of the business."

Atwood said the factory is seeking to "figure out the right channels and [establish] new markets" for coin-op product.

"We have taken on industry veteran Conway Ho as a consultant to assist us in this effort," he said. "We're looking to explore anything from creating product that could be sold through the Sharper Image, to finding new, non-traditional coin-op game venues such as clothing retail stores. We are doing direct marketing of games through our coin-op website and getting enthusiastic responses from players."

Former Capcom coin-op sales veterans Steve Blattspieler and Satinder Bhutani resigned last spring to take posts at Andamiro. The separation was cordial, but Blattspieler felt there simply wasn't enough Capcom product on the coin-op side to demand his and Bhutani's full effort and attention. The company's U.S. staff at present is headed by president bill gardner and executive vice-president of sales and marketing Bob Lindsey. There has been some discussion of hiring a new sales rep, but no decisions appear to have been made yet.

As for arcade operations, Capcom now operates half a dozen Nickel City arcades on the West Coast, with games set at 5¢ play. More Nickel Cities are planned for the U.S., as well as additional arcades of a different brand and concept, Atwood reported.