Capcom's current success, with Monster Hunter: World shattering Steam records and Resident Evil enjoying a resurgence thanks to Village and its remakes, belies a recent past marked by significant struggles. Less than a decade ago, a string of critical and commercial failures left the company reeling, grappling with a lost identity and alienated fanbase.

Capcom's identity crisis was palpable. Resident Evil, the pioneer of survival horror, lost its edge after Resident Evil 4. Street Fighter, another flagship franchise, faltered with the poorly received Street Fighter 5. The situation looked dire, threatening the future of beloved franchises.

However, a pivotal shift in development philosophy, coupled with a powerful new game engine, revitalized these series. This transformation sparked a period of critical acclaim and financial success, propelling Capcom back to the forefront of the gaming industry.

Resident Evil's Lost Path

2016 highlighted Capcom's struggles. Umbrella Corps, an online co-op shooter, faced harsh criticism from both reviewers and players. Street Fighter 5 disappointed longtime fans, falling short of the brilliance of its predecessor. Even the return of Frank West in Dead Rising 4 couldn't prevent it from becoming the series' final new entry. This marked the low point of a series of underwhelming years since 2010. Mainline Resident Evil titles, despite strong sales, received diminishing critical praise. Street Fighter stumbled with a poorly-received installment, and key 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 games across its major franchises, garnering both critical acclaim and impressive sales. Titles like Monster Hunter: World, Devil May Cry 5, Street Fighter 6, and several acclaimed remakes, along with a successful Resident Evil reboot, demonstrate a remarkable turnaround.

This resurgence wasn't merely about learning from past mistakes; it required a complete strategic overhaul, from target audience to technological foundation.

Capcom, established in 1979 as an arcade game manufacturer, rose to prominence in the 80s and 90s with 2D titles like Street Fighter and Mega Man. Its successful transition to 3D, beginning with Resident Evil, continued through the 2000s, culminating in the landmark Resident Evil 4 (2005).

Resident Evil 4's innovative blend of horror and action, while a critical and commercial triumph, significantly altered the franchise's trajectory. While rooted in horror, it incorporated Hollywood-style action sequences. This balance, however, was lost in subsequent installments. Resident Evil 5 (2009), featuring scenes like Chris Redfield punching a boulder and a car chase sequence, leaned heavily into action, diluting the horror element. This identity crisis was apparent to both players and developers, including Resident Evil 4 remake director Yasuhiro Ampo.

Ampo noted the disconnect between player expectations and the direction of the series. This led to titles like Resident Evil 6 (2012), attempting to cater to both action and horror fans by splitting the narrative across multiple characters and storylines, ultimately failing to satisfy either group. Online fan frustration grew as the developers experimented 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), faced criticism for its lack of single-player content and poor online functionality. Fans pointed to a lack of polish and confusing balance issues.

Other key franchises also struggled. Devil May Cry's diminishing returns led to outsourcing DmC: Devil May Cry (2013) to Ninja Theory, a decision met with mixed reactions. Attempts to capture the Western market with titles like Lost Planet and Asura's Wrath also fell short. While games like Dragon's Dogma offered some success, Capcom's overall direction seemed fragmented.

Street Fighter 5: A Turning Point

By the mid-2010s, Capcom initiated strategic changes to reverse its fortunes. Addressing Street Fighter 5's issues became a priority. Director Takayuki Nakayama and producer Shuhei Matsumoto were tasked with stabilizing the game. While acknowledging development challenges, they focused on fixing pressing problems, laying the groundwork for Street Fighter 6.

The decision to continue supporting Street Fighter 5 rather than immediately starting a sequel stemmed from a desire to learn from mistakes and incorporate those lessons into Street Fighter 6. The team treated Street Fighter 5 as a testing ground, iteratively improving netcode, character balance, and introducing new mechanics like V-Shift. The goal was not just to fix the game, but to rediscover the fun, creating a clear path for players to progress and enjoy the game.

This approach, while unconventional, ultimately contributed to the success of Street Fighter 6 (2023).

Monster Hunter's Global Domination

Around 2016, Capcom underwent an internal restructuring, introducing the RE Engine and a new mandate for global appeal. Hideaki Itsuno highlighted the importance of this shift towards creating games for a worldwide audience. Previous attempts to target the Western market, often mimicking prevailing trends, had proven unsuccessful. The new strategy focused on creating universally enjoyable games.

Monster Hunter exemplifies this shift. While possessing a dedicated Western fanbase, it was significantly more popular in Japan. This was partly due to the strong handheld gaming market in Japan and the ease of local multiplayer through handheld consoles. This led to a cycle where Japan-centric content further reinforced the series' image as a primarily Japanese franchise.

Monster Hunter: World (2018), released simultaneously worldwide on PS4, Xbox One, and PC, marked a turning point. The game's AAA production values, larger scale, and simultaneous global launch signaled a commitment to global audiences. Focus testing informed design choices, leading to improvements like displaying damage numbers, broadening the game's appeal.

The result was a massive increase in sales, exceeding 20 million copies for both Monster Hunter: World and Monster Hunter Rise (2022). This success wasn't accidental; it involved carefully adapting the game's mechanics to improve accessibility without compromising its core identity.

Resident Evil 7: A Return to Horror

For Resident Evil, the challenge was defining its core identity: gory action or survival horror. Executive producer Jun Takeuchi's decision to prioritize survival horror proved pivotal. Resident Evil 7 (2017), with its first-person perspective and unsettling atmosphere, successfully returned the series to its horror roots, generating considerable excitement.

While retaining the first-person perspective for mainline entries, Capcom strategically utilized the third-person perspective through remakes, starting with Resident Evil 2. The success of these remakes, particularly the Resident Evil 2 remake, demonstrated the demand for a modern reimagining of classic titles. Despite initial hesitations, the Resident Evil 4 remake further solidified this approach, achieving critical and commercial success by refining the action-horror balance.

Concurrently, Devil May Cry 5 (2019), under Hideaki Itsuno's direction, leveraged the RE Engine to create a stylish and challenging action game, bucking the trend towards overly accessible action titles.

The Catalyst for Change

The RE Engine played a crucial role in Capcom's transformation. Its capabilities in rendering photorealistic assets and its agile development environment allowed for rapid iteration and experimentation. This proved invaluable for Itsuno's vision of creating a stylish and challenging action game. The engine's flexibility enabled the team to refine gameplay and visuals to achieve a high level of polish and style.

Itsuno emphasized the importance of maintaining the "cool" factor in Devil May Cry, drawing inspiration from various sources to create a unique and engaging experience.

A New Golden Age

Since 2017, Capcom has consistently delivered high-quality games across diverse genres. This success stems from a focused strategy of creating globally appealing titles using advanced technology. The company's ability to seamlessly transition between genres while maintaining the unique identity of each franchise is remarkable. This success has not diluted the core experience of its games; instead, it has expanded their appeal to a much wider audience.

Capcom's transformation serves as a lesson for other studios struggling to maintain consistency. By addressing past mistakes, embracing new technology, and focusing on creating universally enjoyable games, Capcom has achieved a remarkable resurgence, establishing a new golden age.