The following is a note from Capcom's Chief Executive Officer, Kenzo Tsujimoto.

My best wishes to everyone for a happy new year.

First, I would like to express my sincere appreciation to all our stakeholders for their support and understanding during 2008.

Financial markets became increasingly volatile in 2008 due to problems that originated with the U.S. subprime loan crisis. As the global financial crisis deepened, we have seen a rapid downturn in the real economy. This is creating an extremely difficult operating environment. At Capcom as well, operations are pervaded by a strong crisis mentality.

I would like to explain where Capcom stands at this time from my perspective as the CEO.

Above all, we are not at all frightened by the current business climate. We have the confidence to continue to make steady progress.

Just how do we plan to accomplish this?
We will focus on two policies that have always been among my highest priorities at Capcom for more than 10 years: managing operations based on cash flows and maintaining a lean organization with no waste. I strongly believe that prioritizing cash flows is the essence of any business. Every company should maintain adequate liquidity while making goods that will sell and collecting the cash proceeds. Cash should be reinvested to drive new growth as management monitors the productivity of these investments. Companies that can skillfully execute these basic tasks will be able to conduct their business activities in a stable manner for many years.

In 2008, we witnessed many events that no one could have foreseen. But Capcom still has the resources to conduct sound business operations on its own. We used structural reforms to assemble an operating framework that is centered on being a successful business. This is true of both our sales and product development organizations. Our ability to create this framework and use it effectively is a major reason that we remain a sound, self-reliant company.

Of course, I am not satisfied with the status quo. Capcom must tackle many issues in order to continue advancing. In particular, we need to make cash flows an even more important element of our management. This will require a global IT system and more powerful management systems. Establishing a highly transparent framework with regard to our business activities, operating results and financial condition will be the first step in this direction. At the same time, we must foster a corporate culture that places emphasis on compliance with laws and ethical standards.

Even as we face the current economic adversity, we will retain our commitment to the core values that have always defined Capcom. In this spirit, Haruhiro Tsujimoto COO and every other member of our outstanding workforce is determined to overcome today's challenges and achieve more progress in 2009.

CEO Kenzou Tsujimoto