As pointed out by Kotaku, the earnings report notes that while Capcom opened up nine new arcade plazas across Japan in 2007, the expansion showed "sluggish growth" under the ailing arcade market. Among several other factors, the company stated that bloating fuel costs played a role in reducing arcade patronage.
"There were several factors that negatively affected performance: the dissemination of home video game machines, intensified competition, declining popularity of card dispensing games for children, and the decrease of visitors to those arcades located in suburban shopping malls due to rising gasoline/petrol prices," Capcom said.
The company noted that arcade operating income took a 62.5% dive in 2007 versus the previous year, leading to a nearly 10% drop in Capcom's net profit for its arcade business.
Despite sluggish performance, the market is likely to see a boost when Capcom's Street Fighter IV hits Japanese arcades this summer.