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Is Japan Dead Yet?

Posted March 8th 2011 by Jordan Mammo.

Is Japan Dead Yet?

In 2009, Keiji Inafune declared the Japanese video game industry finished. "Man, Japan's over," said Capcom's former head of global research and development, going on to clarify that his own company's "kick ass" games were the exception.

Indeed, for much of the past two years Capcom has been considered one of the few Japanese companies that "gets it" in regards to the West. They've successfully revived the Mega Man and Street Fighter franchise. Resident Evil remains a very popular series. Marvel vs. Capcom 3 looks like it's exactly what fans want it to be. And on top of this, Japan remains enthralled by the Monster Hunter series.

It wasn't surprising, then, when Inafune proclaimed that "the Japanese industry is not dead as long as Capcom is still around" at 2010's Tokyo Game Show. This seemed to be the theme of Capcom's press conference as they rolled out titles with more of a Western audience in mind. When once the company boasted of its own internally-developed game engines, it was suddenly boasting that their new games would be developed using Epic's Unreal Engine 3. Even the development of the Devil May Cry franchise was outsourced to Ninja Theory, a UK-based company. Surely the goal of becoming a more global company was finally in sight.

Then something surprising did happen. Inafune spoke to The New York Times, and what resulted was a remarkably blunt and candid interview. The core of his sentiment may have been this:

"Everyone [in Japan] is making awful games... Capcom is barely keeping up... It's being complacent."

He even went on to say Capcom's board of directors is self-serving and unserious about globalization. It's hard to think of any developer taking aim at their own company in such a way. Inafune said he'd been "strong-arming" a lot of things through Capcom, but that there's only so much he could do. The man seemed exhausted with his situation.

And now Inafune is gone. Though he did say he still loves Capcom, he also noted that he "lost the authority to evaluate [his] subordinates and the qualification to speak about [his] dreams," two things he claimed were necessary to perform his job as CEO.

He is not the first to feel this way. In just the last few years Capcom has lost a horde of talent, most notably Resident Evil creator Shinji Mikami. Claiming that he was unable to create new things within Capcom at his managerial position, he left and was accompanied by significant amounts of creative staff, namely the director of Devil May Cry and Viewtiful Joe as well as the producer and lead art director of Okami. But while Mikami and Co. wanted more freedom to create original titles, Inafune wanted to change the direction of the entire company.

The big question, then, is whether or not Inafune is right. Is Japan "over?"

Certainly, the country's profile in the modern video game market has dwindled (Nintendo excluded) and there are a few reasons for its current predicament. During the past few years, many Japanese developers have spoken out about the development community's insular nature, as well as its lack of tools, development time, and openness to new ideas. Meanwhile, the output of American and European developers has improved a great deal in quality, generally eclipsing what used to pass as a Western title last generation.

The practice of using a third-party engine along with other shared resources has also turned out to be a significant advantage. Many Japanese developers were reluctant to get on board with the likes of Unreal Engine 3 or other kinds of middleware, preferring to develop their own engines internally. In some cases, even different development teams within the same company would not share resources with each other. Companies like Capcom and Square-Enix notably spent large amounts of money developing their own resources, but it looks like they underestimated how difficult and expensive it is to develop for current consoles alone.

These days, they are both much more open to resource-sharing. The new Devil May Cry is being developed with Unreal Engine 3 and Square-Enix, despite some early trouble with the same engine, is licensing other forms of middleware to give themselves as many options as possible. If rising costs have caught up with even these giants, then certainly other Japanese developers have been feeling the strain for years. Seen in this light, the fact that many of them looked to invest more heavily in less-expensive handheld systems is unsurprising.

Fortunately, the industry seems to have identified this situation as a problem. Square-Enix president Yoichi Wada has stated that Japan's industry is very closed and "almost xenophobic." Pointing to the West, Wada said that Japan would benefit from collaborating with universities to help educate up-and-coming developers as well as with working alongside middleware and development tool companies. He took aim at the attitude of Japanese developers who look down upon using middleware and building on top of them, claiming that games themselves won't become standardized simply because of shared interface. Finally, he said that the native industry needs to actively work with the government to promote open communities and collaboration.

Attempting to change the entire attitude of a once-dominant industry takes time, though, and while Japan as a whole works towards opening up, some have tried taking matters into their own hands by collaborating with Western companies. Here, the results have been mixed.

Capcom blamed the failure of collaborative efforts like Bionic Commando and Dark Void on cultural differences and an inability to communicate properly. Communication issues were also cited as significant obstacles during the development of Shadows of the Damned, a collaborative effort between Grasshopper Manufacture and Electronic Arts that also uses Unreal Engine 3, although now it seems to be progressing much more smoothly. Square-Enix used Unreal Engine 3 to develop The Last Remnant only to see disappointing results.

Still, Capcom affirmed its dedication to combining Japanese and Western flavors when it recently purchased the team behind Dead Rising 2, Canada-based Blue Castle Games. Square-Enix acquired European-based Eidos in 2009 and has used the company to broaden its technological base and resource-sharing abilities. Notably, the developers of Unreal Engine 3 have opened an office in Tokyo, perhaps signaling an opportunity to work with more Japanese developers. One of the most important goals of Mikami's new Tango Gameworks studio is to promote new talent from the Japanese development industry. That this initiative is supported by its recent Western purchaser Zenimax Media, parent company of Bethesda, can only be a good thing looking towards the future.

Meanwhile, other developers have tried using their internal teams to develop for the West only to see similarly muddled results. One of the worst offenders is Koei's Bladestorm: The Hundred Years War, which takes the gameplay popularized by Dynasty Warriors and changes the setting from Asia to Europe. When that approach didn't work, Koei commissioned another team to develop Quantum Theory, a title that borrows heavily from Gears of War and was released to a middling reception.

Even Konami decided to redesign its Castlevania series by making it more similar to God of War in an attempt to increase its appeal in the West, but titles like these often seem misguided at best and like pandering at worst. Palette-swapping and poorly recreating genres that Western developers have been dominating for years won't be the answer for Japan. Developers would be better off focusing on what they know how to do best, sharing resources and seeking technical help when necessary, and being confident in their own ideas.

Of course, the best way to remain confident is for Japan to encourage the next generation of game developers. Before leaving Konami, Silent Hill producer Akira Yamaoka once commented at how surprised he was to discover how advanced Western game developers were, leaving him to worry about the state of Japanese game development and its lack of young blood. As Wada said, the country needs to do a better job promoting better education and training, while the industry itself needs to support more open communities and outside streams of creativity.

To do that, Japanese publishers will need to ensure that this new talent has a home within their respective companies, because the schism that exists between them and their developers has continued to grow.

The past 10 years have seen industry staples like Sega, Capcom, and Square-Enix lose huge amounts of creative talent. Surprisingly, it's been the same talent that played such a large role in helping these companies reach their peak status. Almost everyone cited restrictive roles as a significant reason for leaving, and they either started their own companies or joined other independent outfits. Obviously these kinds of departures leave holes to fill.

Games like Resident Evil 5 and Devil May Cry 4 sold well on the backs of their brand, but their reception was nowhere near that of their predecessors, leaving Capcom searching for ways to keep the franchises relevant. The new Devil May Cry was intentionally redesigned in such a way to ensure controversy and a raised profile following its announcement, and the Resident Evil franchise is confirmed to be heading back to the drawing board. The latest speculation is that the series has been contracted out to Slant Six Games, the Vancouver-based developers of SOCOM.

As for those departing their respective companies, as good as it is for them to give themselves the freedom to invent as they please, many have yet to find the kind of success they had with their previous employers. Establishing an independent company takes time, and some who've left, such as Final Fantasy XII director Yasumi Matsuno, have only now begun to bring new titles to market. Others like Sonic creator Yuji Naka opted for smaller projects such as Let's Catch on the Wii and Ivy the Kiwi for the Nintendo DS, neither of which sold very well. Mikami himself did not release a new title until Vanquish hit stores amongst a crowded Fall 2010 lineup.

In keeping with their desires, these developers have crafted new and original properties, but many were not released until years into the console cycle. Unfortunately, the best time to promote and sell new properties has generally been during the initial year or so of a new console's launch, before established brands old and new begin to take over the market. Combine this with an ongoing recession and it's not surprising that these new titles are finding it difficult to climb the sales charts. Smaller companies such as Marvelous Entertainment have been forced to halt development of original work and focus on sequels. Taken all together, this has led to a situation where many established Japanese brands are not as relevant as before, yet are still relied on because new titles have had trouble gaining traction.

Even so, are Japanese games really that much less diverse and less inspired than those being developed in the West? Fewer Japanese titles outside of Nintendo's are claiming the top of worldwide sales charts, but is everyone in Japan really making awful games? The answer, of course, is no. There are still a number of Japanese developers crafting great experiences and pushing the industry. It is true, however, that fewer of them have found solid footing on current consoles, so to say that the country's problems are overblown would be severely underestimating the situation.

Japan's videogame market has shrunk 20% over the past three years and now only accounts for about 10% of the global market, making relying solely on native sales undesirable. Developing titles that appeal to a worldwide audience, then, is a mission that the industry has to accomplish lest it become increasingly overlooked.

Many companies have identified the most daunting of the challenges they face and have begun working towards solving them, but the trick will be not to lose their identities in the process. While collaboration and resource-sharing with the West will undoubtedly help with technological know-how as well as understanding global appeal, the last thing that Japanese developers want to do is end up mimicking their Western counterparts, especially since emerging markets in China, India, and South Korea will provide more unique opportunities to branch out and grow.

Interestingly, 2010's Tokyo Game Show might have offered a hint at how developers are adapting by putting the focus on an unlikely source: Microsoft. When Microsoft Game Studios Vice President Phil Spencer said that five of the six top-selling Xbox Live Arcade games are Japanese, he also revealed an ambitious set of titles from Japanese companies for its hands-free Kinect peripheral. The partnership will yield titles ranging from a horror game and hardcore mech simulator to a light-hearted exploration game set in a haunted house.

The announced titles look to offer a surprising amount of variety. Child of Eden looks like a beautiful sensory experience, and Grasshopper Manufacture is bringing out codename D, an action game aimed at more experienced gamers that involves evil mascots and run-down amusement parks. Even Panzer Dragoon creator Yukio Futatsugi, once stuck checking deliverables at Microsoft, is back on his feet with a new company and a new Kinect title about flying and riding dragons.

At this point little is known about the majority of these titles, but what's been announced already looks far more interesting than almost the entirety of what previously made up the Kinect line-up, much of which consisted of Wii Sports look-alikes and mini-game collections. They stand out in a crowded market, are being developed for and with Western companies, and still retain the kind of imagination that we want to see from Japanese video games. The Japanese industry may not be able to develop projects the same way it has grown used to over the years, but if it can open itself up in the way it now recognizes is necessary, perhaps these titles can help point the way to a future even Inafune would be proud of.

Posted in: Gaming, Features, Entertainment

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User Comments

LinKami Deschain

I have to admit, a lot of the newer Japanese games and franchises to come I've just not been able to become interested in. besides ff13 (which i never finished nor care to), i have yet to play any of square-enix's games this gen, not played any resident evil past 4, etc, etc. yet at the same time on the american side i can't really stand games like fallout or any of the other american made games. the only exceptions to those are god of war and mass effect for america, and nintendo for japan :/ really liked limbo though.

Wednesday, March 9th 2011



Well, Matsuno was director before he stepped down from SE, and since FFXII is attributed so much to his vision I think it's okay to still call him its director. But thanks for reading! It's true that a huge company like Nintendo is often looked past in this debate, but interestingly Inafune didn't even seem to consider them in the equation. Clearly they're kind of in a different league since they branched out and found enormous success all over with the Wii and DS. As for the real question being fluctuation between niche and mainstream, I agree, but I think that's actually what we're discussing when we talk about Japan. Clearly they still make good games and people play them, but they're not leading the conversation in the industry nearly to the extent that they used to, and their drop in the sales charts kinds of begs the question: has the once dominant force become a niche and, if so, why and what can be done to change that?

Friday, March 11th 2011

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