The quarter, which ran from July 1 to September 30, saw strong sales of Monster Hunter Freedom 2G on PSP, resulting in a dramatic 47.9% increase in operating income for Capcom's home video game division--3.6 billion yen this year over 2.4 billion last.

Despite the growth in profit, the home video game division only saw a 1% jump in net sales--16.48 billion yen in Q2 2008 over 16.32 billion yen in Q2 2007.

However, the net sales of Capcom's arcade division grew 196.2% over Q2 2007--from 1.53 billion yen last year to 4.07 billion this year--due to sales of Street Fighter IV, Sengoku BASARA X (cross), and Fate/Unlimited Codes.

And whereas the Arcade unit posted a 570 million yen loss of operating income in Q2 2007, the division posted a 737 million yen gain in operating income this quarter.

Capcom's apparent clean bill of financial health marks the latest in uncertain times for the game industry and worldwide economy. Though Sony's gaming division is up over last year, the company's profits dipped 90% in the second quarter of its 2008 fiscal year.

Nintendo's profits are up, but the industry leader has cut its net profit expectations by almost 16% due to the "strength of the yen against the dollar and the euro." Meanwhile, Electronic Arts and THQ are both in the midst of cost-cutting layoffs.