Capcom: Console Expansion, Gas Prices Hurting Arcade Biz

While Capcom's annual results saw gains on the fiscal year, the company's efforts to improve its struggling arcade business have been unsuccessful, with less than 3 percent sales growth and a 63 percent profit slump in that division, the company said.

Capcom credits problems in the arcade division to widespread home console expansion, as well as stiffer competition in the arcade industry. Worldwide fuel price struggles, Capcom said, meant fewer visitors to shopping mall arcades, while the popularity of card-dispenser kids' games has begun to decline, further harming arcade operations.

Capcom also said it lost money when its "Donkey Kong Banana Kingdom" machine suffered malfunctions, adding that the major area of income for the arcade business is the sale of peripheral products like trading cards.