Nov. 14 (Bloomberg) -- Capcom Co., publisher of the ``Resident Evil'' games, may boost profitability to a seven-year high by the end of March 2009, helped by earnings from its arcade operations, President Haruhiro Tsujimoto said.

The operating margin, or the percentage of sales left after deducting the cost of goods sold and administrative expenses, may rise to 15 percent next fiscal year from 12.8 percent in the 12 months ending March 2008, Tsujimoto said in an interview on Nov. 12. Sales growth may more than double to 10 percent, he said.

Capcom is closing unprofitable centers and opening larger stores that target women and families to help improve earnings at the arcade business, which generates 18 percent of sales. The Osaka-based company is seeking to revive earnings after losing arcade customers to home video game players such as Nintendo Co.'s Wii.

``It's all about the location,'' Tsujimoto said.

Capcom plans to add eight new arcades and close three centers in the year ending March 2008, Tsujimoto said this week in Tokyo.

The company, which gets about 58 percent of revenue from home video-game sales, forecasts profit will increase this year, helped by releases of new titles in the ``Resident Evil,'' ``Monster Hunter,'' and ``Devil May Cry'' game series.

Net income will probably rise 5.9 percent to 6.2 billion yen ($56 million) in the year ending March 2008, sales may increase 4.6 percent to 78 billion yen, while operating profit is expected to climb 4.1 percent to 10 billion yen, Capcom said in May.

To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net; Junko Kikkawa in Tokyo at jkikkawa@bloomberg.net.

Last Updated: November 13, 2007 20:29 EST