With Monster Hunter Rise shattering Steam records and Resident Evil enjoying unprecedented popularity thanks to Village and several stellar remakes, Capcom seems virtually unstoppable. But this wasn't always the case. Less than a decade ago, a string of critical and commercial failures left the company reeling, lost both its direction and its audience.
Capcom suffered a severe identity crisis. Resident Evil, the pioneer of survival horror, lost its bite after Resident Evil 4. Similarly, Street Fighter stumbled after the poorly-received Street Fighter 5. The company teetered on the brink of collapse.
However, a turning point emerged. A strategic shift in game development, coupled with a powerful new game engine, revitalized its flagship franchises, sparking years of critical acclaim and financial success that propelled Capcom back to the top.
Resident Evil Lost Its Way
2016 was a disastrous year. Umbrella Corps, an online co-op shooter, was critically panned. Street Fighter 5 disappointed long-time fans, and Dead Rising 4, despite Frank West's return, proved to be the series' final new entry. This marked the nadir of a string of lackluster years following 2010. Mainline Resident Evil titles received diminishing critical praise despite strong sales. Street Fighter faltered, and beloved franchises like Devil May Cry were largely absent. Meanwhile, Monster Hunter, while hugely popular in Japan, struggled to gain traction internationally.
This contrasts sharply with Capcom's current success. Since 2017, the company has consistently delivered hit after hit, including Monster Hunter: World, Devil May Cry 5, Street Fighter 6, and several acclaimed remakes and a successful Resident Evil reboot. Capcom's recent track record is almost flawless.
This turnaround wasn't merely about learning from mistakes; it required a complete strategic overhaul, from target audience to technology.
Founded in 1979 as an arcade game manufacturer, Capcom rose to prominence in the 80s and 90s with 2D titles like Street Fighter and Mega Man, successfully transitioning to 3D with franchises like Resident Evil. Between 2000 and 2010, it successfully modernized many of its classic franchises, culminating in the masterpiece, Resident Evil 4.
Resident Evil 4 (2005) is widely considered a generational high point, expertly blending horror and action. However, this blend significantly altered the Resident Evil franchise. While fundamentally a horror game, its action elements became increasingly prominent. This balance was lost in subsequent entries. In Resident Evil 5 (2009), Chris Redfield punches a boulder, and the action overshadows the horror. This identity crisis was evident to both players and developers, including Resident Evil 4 remake director Yasuhiro Ampo, a veteran since 1996.
"Throughout the Resident Evil series, we set different goals for each game," Ampo explains. "But we felt that fan expectations were diverging from our creative direction."
This led to titles like Resident Evil 6 (2012), which attempted to please both action and horror fans, resulting in a disjointed experience that satisfied neither. Online fan disappointment was palpable, while developers continued experimenting with online co-op spin-offs.
This wasn't limited to Resident Evil. Following the success of Street Fighter 4, its sequel, Street Fighter 5 (2016), was criticized for its lack of single-player content and poor online functionality. Fans perceived a lack of polish and frustrating game balance.
Other key franchises also struggled. Devil May Cry saw diminishing returns, leading Capcom to outsource DmC: Devil May Cry (2013) to Ninja Theory. While gaining cult status, its reception was mixed, and the series was put on hold.
The early-to-mid 2010s saw Capcom struggling. Key franchises failed to replicate past successes, new titles targeting Western markets (Lost Planet, Asura's Wrath) underperformed, and only occasional bright spots like Dragon's Dogma emerged. Change was clearly needed.
Street Fighter 5: The Lost Cause
By the mid-2010s, Capcom initiated strategic changes. Street Fighter 5 needed fixing, so director Takayuki Nakayama and producer Shuhei Matsumoto were brought in. While not involved from the start, they inherited a game requiring substantial improvements to regain fan trust.
"There were production challenges," Nakayama admits. "We couldn't make major pivots, which limited our options."
Instead of a complete overhaul, they focused on fixing critical issues, laying the groundwork for Street Fighter 6. "We lacked time to address problems in Street Fighter 5," Nakayama explains. "We had to wait for Street Fighter 6 to implement those improvements properly."
Abandoning Street Fighter 5 wasn't an option. "We weren't thinking, 'Let's end Street Fighter 5 and focus on 6'," Matsumoto clarifies. "We used Street Fighter 5's development as a learning process for Street Fighter 6."
Street Fighter 5 became a testing ground. Numerous updates addressed netcode, character balance, and introduced new mechanics like V-Shift, later refined for Street Fighter 6. The goal was to rediscover the fun, addressing the frustration of the original release.
"Fighting games are fun, but Street Fighter 5 wasn't initially enjoyable for many," Matsumoto says. "We lacked a clear path to make it fun for players."
Instead of simply lowering the difficulty, Street Fighter 6 expanded tools for new players while retaining features for veterans. By using Street Fighter 5 as a learning experience, Street Fighter 6 (2023) became a critical and commercial success.
To prevent repeating such situations, Capcom implemented significant behind-the-scenes changes.
Monster Hunter Took Over the World
Around 2016, Capcom reorganized, adopting the RE Engine to replace the aging MT Framework. This wasn't just a technological upgrade; it involved a mandate to create games for a global audience.
"Several factors converged," says Hideaki Itsuno (Devil May Cry). "The new engine and a clear goal to create globally appealing games."
Capcom's previous approach often catered to perceived Western market trends, resulting in titles like Umbrella Corps and Lost Planet. They realized the need for universally appealing games.
"We focused on making good games that would reach a worldwide audience," Itsuno explains.
Monster Hunter exemplifies this shift. While possessing a Western fanbase, it was significantly larger in Japan. This was partly due to the popularity of handheld consoles in Japan, which facilitated local multiplayer.
"Twenty years ago, network connections weren't easy in Japan," says Ryozo Tsujimoto (Monster Hunter executive producer). "Handhelds made multiplayer easy, which greatly contributed to the game's success."
This created a cycle. Monster Hunter's Japanese success led to region-specific content, reinforcing its perception as a Japan-only brand. However, with improved Western internet infrastructure, Capcom saw an opportunity.
Monster Hunter: World (2018), released simultaneously worldwide on PS4, Xbox One, and PC, was a major departure. It offered AAA console-quality visuals, larger environments, and bigger monsters.
"Calling it Monster Hunter: World was a nod to our intention to appeal to a global audience," Tsujimoto explains. "We aimed for global standards."
This involved more than simultaneous releases. The team conducted worldwide playtests, incorporating feedback to refine game systems. The addition of damage numbers is a prime example of a small change with significant impact. Monster Hunter: World and Monster Hunter Rise (2022) both sold over 20 million copies, a massive leap from previous installments.
"Monster Hunter is an action game; the sense of accomplishment from mastering the action is key," Tsujimoto states. "But for new players, we analyze where they get stuck and incorporate feedback to improve the experience."
Resident Evil 7 Began Turning Things Around
Monster Hunter's success provided a blueprint. For Resident Evil, the challenge was choosing between action and survival horror. Jun Takeuchi (executive producer) decided to prioritize survival horror.
"Around Resident Evil Revelations 1 and 2, I was experimenting with different approaches," Ampo recalls. "Takeuchi set the direction: return to the series' roots."
Resident Evil 7 (2017), announced at E3 2016, marked a return to first-person perspective and a focus on survival horror. The first-person perspective enhanced the game's atmosphere.
"Takeuchi made it clear that the series needed to be scary and focused on survival," Ampo says. "Resident Evil 7 would return to its origins."
The game's success, while not matching Resident Evil 4, marked a significant return to form. Its unsettling atmosphere made it one of the scariest Resident Evil games.
Capcom didn't abandon the third-person perspective. While new mainline entries remained first-person, third-person remakes were planned, starting with Resident Evil 2, driven by fan demand.
"People really wanted this," Ampo reveals. "Hirabayashi came up with the slogan: 'We'll do it.'"
The Resident Evil 2 remake became a massive success, blending horror, action, and puzzles, introducing a menacing Tyrant system. This success was followed by the Resident Evil 3 remake and, surprisingly, a Resident Evil 4 remake.
"Resident Evil 4 was beloved," Ampo admits. "There was internal discussion; remaking it was risky."
Despite hesitation, the Resident Evil 4 remake proved another hit, refining the action-horror balance and enhancing the game's mood and tone.
Concurrently, Hideaki Itsuno (Devil May Cry) observed a trend towards overly casual action games. With Devil May Cry 5, he aimed for a more challenging, stylish experience, leveraging the RE Engine.
The Reason Behind the Change
"I felt action games were too kind to players," Itsuno admits. "I wanted a more challenging experience."
Itsuno, having directed several Devil May Cry titles, returned after a long hiatus, utilizing the RE Engine's capabilities to create a stylish and visually impressive game.
"Technology changed significantly over time," Itsuno explains. "The RE Engine allowed for quicker development and easier iteration."
The RE Engine's rapid development tools and photorealistic capabilities were crucial for Itsuno's vision. Itsuno aimed to create the "coolest" action game, requiring significant trial and error.
"Devil May Cry is about being cool," Itsuno states. "I incorporated everything I considered cool into the game."
A New Capcom Golden Age
Since 2017, Capcom has consistently delivered high-quality games. This success is attributed to a focus on globally appealing titles powered by the advanced RE Engine.
This global focus didn't dilute the series' identities. Capcom maintained the unique characteristics of each franchise while expanding its audience.
When asked about a "golden age," the directors largely agreed. Nakayama (Street Fighter) stated, "It's an exciting time. We're focused on making fun games." Tsujimoto (Monster Hunter) added, "We're in a golden era, and we need to make it last."
