With Monster Hunter: Worlds shattering Steam records and Resident Evil enjoying unprecedented popularity thanks to Village and several stellar remakes, Capcom appears almost invincible. But this wasn't always the case. Less than a decade ago, a string of critical and commercial failures left the company teetering on the brink, lost both in its identity and its audience.

Capcom suffered a profound identity crisis. Resident Evil, the pioneer of survival horror, lost its edge after Resident Evil 4. Another flagship franchise, Street Fighter, stumbled after the poorly-received Street Fighter 5. The end seemed near for Capcom and its beloved games.

Yet, a glimmer of hope emerged. A shift in Capcom's game development philosophy, coupled with a powerful new game engine, revitalized its iconic series, igniting years of critical acclaim and financial success that propelled Capcom back to the top tier.

Resident Evil Lost Its Way

2016 was a disastrous year. Umbrella Corps, the year's major Resident Evil release, a co-op online shooter, was savaged by critics and fans alike. Street Fighter 5 was met with widespread disappointment from longtime fans, a stark contrast to the brilliance of Street Fighter 4. And Dead Rising 4, despite the return of Frank West, proved to be the series' final new entry. This marked the nadir of a string of forgettable years stretching back to 2010. Mainline Resident Evil games received increasingly negative reviews despite strong sales. Street Fighter faltered, and Capcom mainstays like Devil May Cry were absent. Meanwhile, Monster Hunter, while hugely popular in Japan, struggled to gain traction internationally.

This is a far cry from the Capcom we know today. Since 2017, Capcom has consistently delivered hit after hit across its most famous franchises, accumulating both sales and awards. This winning streak includes Monster Hunter: World, Devil May Cry 5, Street Fighter 6, and a trio of industry-leading remakes alongside an acclaimed Resident Evil soft reboot. Capcom's recent success seems almost effortless.

This resurgence required more than just learning from past mistakes. Capcom had to overhaul its entire strategy, from target audiences to the technology it employed, to achieve such a remarkable turnaround. To understand this transformation, IGN spoke with four of Capcom's leading creatives to learn how one of gaming's most successful companies stumbled, fell, and rose stronger than ever.

Founded in 1979 as a manufacturer of electronic game machines, Capcom rose to prominence in the 80s and 90s with 2D classics like Street Fighter and Mega Man, successfully transitioning to 3D with titles like Resident Evil. Between 2000 and 2010, Capcom successfully modernized many of its iconic franchises, culminating in one of the greatest games ever made: Resident Evil 4.

Released in 2005, Resident Evil 4 is widely considered a generational high point, masterfully blending horror and action. However, this blend dramatically altered the course of the Resident Evil franchise. At its core, Resident Evil 4 is a horror game, drawing inspiration from Friday the 13th, H.P. Lovecraft, and John Carpenter. Yet, interwoven with its horror elements are incredibly effective action sequences reminiscent of Hollywood blockbusters.

Unfortunately, this balance was lost in subsequent games. In 2009's Resident Evil 5, Chris Redfield punches a boulder the size of a car, and infected enemies are gunned down in a car chase more reminiscent of Fast and Furious than a terrifying horror experience. The series' identity was fading, a fact evident to both players and developers like Resident Evil 4 remake director Yasuhiro Ampo, who has worked on the series since 1996.

"Throughout the Resident Evil series, we set different goals and challenges for each game," Ampo explains. "But this time, many of us felt a disconnect between what fans wanted and what we were creating."

This lack of direction led to games like 2012's Resident Evil 6, which attempted to please both action and horror fans. By splitting the game into three storylines with six playable characters, it failed to find the crucial balance, leaving neither group satisfied. Disgruntled fans voiced their disappointment online, while developers experimented with online co-op spin-offs.

This decline wasn't limited to Resident Evil. Following the success of Street Fighter 4, Capcom failed to replicate its achievements with the sequel. Street Fighter 5 (2016), criticized for its lack of single-player content and poor online functionality, lacked the polish and balanced gameplay of its predecessor. Fans pointed to a lack of polish and a confusing approach to balance, making the overall experience frustrating.

The struggles extended beyond Street Fighter and Resident Evil. Almost every major franchise faltered. Devil May Cry, after diminishing returns, saw its next installment, 2013's DmC: Devil May Cry, outsourced to Ninja Theory. While gaining cult status, its revised mythology, protagonist, and sluggish frame rate were met with negative fan reaction, leading to the series being shelved.

This period defined Capcom's early-to-mid 2010s. Key franchises struggled to maintain past successes, new titles aimed at the Western market like Lost Planet and Asura's Wrath failed to resonate, and despite bright spots like Dragon's Dogma, Capcom's focus seemed scattered. Change was clearly needed.

Street Fighter 5, The Lost Cause

By the mid-2010s, Capcom implemented strategic changes that would reshape its destiny. The first step was addressing existing issues, starting with Street Fighter 5. Director Takayuki Nakayama and producer Shuhei Matsumoto were brought in to restore stability.

While not involved from the outset, they inherited a game needing significant improvements to regain fan trust.

"There were challenges in the game's production, which is why I joined the team," Nakayama admits. "We couldn't make major changes, so we had to proceed in the current direction, limiting our options."

These limitations restricted their scope. Instead of transforming Street Fighter 5 into a top-tier game, they focused on fixing pressing problems, biding their time until Street Fighter 6.

"We lacked the time to address problems in Street Fighter 5," Nakayama explains. "We had to wait for Street Fighter 6 to implement those ideas properly."

Why not abandon Street Fighter 5 and start fresh? According to Matsumoto, that wasn't an option. "There was no thought of ending Street Fighter 5 and focusing on Street Fighter 6. While working on Street Fighter 5, we were figuring out what we wanted to do with Street Fighter 6," he says.

"We experimented with Street Fighter 5, taking what worked and applying it to Street Fighter 6. Street Fighter 5's development helped us determine our direction for the sequel."

The team treated Street Fighter 5 as a learning experience, using it to identify and correct design flaws for the sequel. Numerous updates followed, from netcode improvements and character rebalances to new characters, mechanics, and V-Shift, a defensive move initially considered for Street Fighter 6 but tested in Street Fighter 5.

The goal was to rediscover the fun. Street Fighter 5 had become frustrating, so the focus shifted to expanding tools for new players while retaining elements appreciated by experienced players. Instead of simply lowering the difficulty, Street Fighter 6 provided more tools for newcomers while maintaining the series' core appeal for veterans. By using Street Fighter 5 as a testing ground, Street Fighter 6 (2023) became one of the franchise's most critically acclaimed entries.

To avoid repeating past mistakes, Capcom needed a significant strategic shift. This involved key behind-the-scenes changes.

Monster Hunter Took Over The World

Around the launch of Street Fighter 5 in 2016, Capcom underwent an internal restructuring to prepare for a new generation of games using the RE Engine, replacing the aging MT Framework. This change went beyond technology; it included a mandate to create games for a global audience, not just regional markets.

"Several factors converged," says Hideaki Itsuno, known for his work on Devil May Cry. "The engine change and a clear goal to create globally appealing games."

Capcom's games from the PS3/Xbox 360 era often seemed to chase Western gaming trends, with mixed results. After several years, Capcom realized it needed to create universally appealing games, not just those targeting specific Western genres.

"We focused on making good games that would reach a global audience," Itsuno says.

Itsuno notes that the period leading up to 2017 was pivotal. "The organizational and engine changes converged," he says. Resident Evil 7, launched that year, marked the beginning of Capcom's renaissance.

No series better embodies this global strategy than Monster Hunter. While having Western fans, it was far more popular in Japan. This wasn't intentional; several factors contributed.

Monster Hunter's success on PSP in Japan was partly due to the strong handheld gaming market there and the ease of local multiplayer without internet access, according to executive producer Ryozo Tsujimoto.

"Twenty years ago in Japan, network connections weren't easy, and online Monster Hunter wasn't widespread. Handhelds made multiplayer easy, allowing players to enjoy the game even without internet access," Tsujimoto explains.

Monster Hunter's cooperative gameplay was best served by enabling quick hunts with friends, which handhelds facilitated. This led to a cycle where Monster Hunter's success in Japan resulted in Japan-focused content, reinforcing its image as a "Japan-only" brand.

However, Western fans existed, and the shift towards online console gaming presented an opportunity. Monster Hunter: World (2018), released simultaneously worldwide on PS4, Xbox One, and PC, marked a significant change. It offered AAA console quality, larger environments, and bigger monsters.

"Calling it Monster Hunter: World reflects our intention to appeal to a global audience," Tsujimoto reveals. "Simultaneous worldwide release and the absence of Japan-exclusive content were crucial in aligning with global standards."

Beyond simultaneous release, the team made adjustments to broaden Monster Hunter's appeal. Playtesting provided valuable feedback, leading to changes like displaying damage numbers. These small tweaks significantly boosted the game's reach. Monster Hunter: World and Monster Hunter Rise (2022) both sold over 20 million copies, a massive leap from previous sales.

"Monster Hunter is at its core an action game, and the sense of accomplishment from mastering the action is key," Tsujimoto explains. "But for new players, it's about reaching that point. We analyze where players get stuck and use that knowledge to design new systems."

Resident Evil 7 Began Turning Things Around

Monster Hunter had a winning formula; the challenge was expanding its reach. For Resident Evil, the team needed to choose between action and survival horror. Executive producer Jun Takeuchi made the decision to prioritize survival horror.

"Around the time of Resident Evil Revelations 1 and 2, I was experimenting with different approaches," recalls Yasuhiro Ampo. "Jun Takeuchi set the direction: Resident Evil needed to return to its roots."

Takeuchi's decision to focus on survival horror proved correct. Resident Evil 7, announced at E3 2016, was a hit. Its first-person perspective, unsettling atmosphere, and claustrophobic setting made it one of the scariest games in the series.

"Takeuchi made it clear that the series needed to be scary and focus on survival," Ampo says. "Resident Evil 7 would return to its origins, emphasizing survival."

Capcom didn't abandon the third-person perspective entirely. While new mainline titles remained first-person, third-person games were planned through remakes, starting with Resident Evil 2. The team recognized the demand for remakes, partly due to fan projects.

"People really wanted this," Ampo reveals. "Producer Yoshiaki Hirabayashi said, 'We'll do it.'"

The Resident Evil 2 remake became the second best-selling Resident Evil game. Its success led to a Resident Evil 3 remake and, despite initial hesitation, a Resident Evil 4 remake, which refined the action-horror balance, enhancing the survival horror aspects.

Concurrently, Hideaki Itsuno, longtime Devil May Cry director, had a similar realization. After Dragon's Dogma, he observed a trend towards more casual action games. For Devil May Cry 5, he aimed to create a challenging, stylish action game, leveraging the RE Engine's capabilities.

The Reason Behind The Change

"I felt the action game trend was too kind to players," Itsuno admits. "I wanted to create something more challenging."

Itsuno's 10-year absence from Devil May Cry allowed him to refine his vision. The RE Engine, replacing the MT Framework, offered higher visual fidelity and improved development tools. This enabled Itsuno to create a highly stylish action game.

"The RE Engine allowed for a less stressful development environment," Ampo explains. "Internal development meant quicker tool creation and iteration."

This allowed for rapid experimentation. Itsuno aimed to create the "coolest" action game, using the RE Engine's capabilities to enhance Devil May Cry's style.

"Devil May Cry is about being cool," Itsuno says. "I incorporated everything I considered cool—from movies and comics to sports—into the game."

A New Capcom Golden Age

Since 2017, Capcom has consistently released critically acclaimed games. Its success stems from a focus on globally appealing games, built with a technologically advanced engine capable of handling diverse genres. Capcom seamlessly transitions between fighting games, survival horror, and open-world action RPGs.

This global focus hasn't diluted the series' identities. Capcom maintains the core elements of each franchise while expanding its audience. Many of Capcom's competitors are facing similar challenges to those Capcom overcame a decade ago.

When asked about a new golden age, the directors largely agreed. Nakayama says, "It's an exciting time at Capcom. We're focused on things we find fun." Tsujimoto adds, "Capcom is in a golden era, and we'll do everything to make it last."