Japan: Fall Of The Video Game Kings

[NATO AIR]

interesting look at why japan's games have been sucking wind lately
its good in the long run: greater competition yields better games

http://www.msnbc.msn.com/id/6199779/site/newsweek/

Fall of the Video King
Japan's game publishers used to be on top of the world. Now they're losing out to U.S. and European rivals. What happened?

Courtesy Nintendo of America
The latest 'Legend of Zelda' tries to recpature Nintendo's glory days
By N'Gai Croal
NewsweekOct. 18 issue - Nintendo's press conferences at the Los Angeles Electronic Entertainment Expo have always been more raucous than those of its competitors. But recently the company seems to be trying a bit too hard. Earlier this year, for instance, Reginald Fils-Aime, the new executive vice president for North America, stood before journalists and declared, "My name is Reggie and I'm about kicking ass." Then he showed footage from souped-up new versions of classic Nintendo heroes, like the gold-armor-clad heroine of Metroid Prime: Echoes and the daring fur ball Fox McCloud from Star Fox 2. The wildest applause of all was reserved for a trailer for the company's new Legend of Zelda game, which reduced some of the seemingly grown men in attendance to tears at the sight of their hero, Link, all grown up and rendered in stunningly believable 3-D. Was Nintendo trying to recapture the glory days, back in 1998, when it owned a quarter of the U.S. market and sold five of the top 10 videogame-console games?

What's clear is that those glory days are gone—not only for Nintendo, but for all Japanese game publishers. The North American videogame market—the world's largest—has been taking off in recent years, but Japanese publishers aren't reaping the rewards—their share of the U.S. market has plunged to 29 percent in 2004, from 49 percent in 1998, according to John Taylor of Arcadia Investment Corp. While the market share of the Japanese game makers tumbled, Western publishers took up the slack. The U.S. firm Electronic Arts now has nine of the top 20 best-selling games, and other American and European firms like Activision and Take-Two grabbed another six. The Christmas season, usually boom time for game makers, looks bleak for Japanese firms. Meanwhile the Japanese firms can no longer rely on their home market to quickly recoup their investments in new games: console-software sales have shrunk from $3.4 billion in 1998 to $2.2 billion last year, a 35 percent drop. "We need the U.S. in order to be profitable," says Namco vice president Yoichi Haraguchi.

How did Japanese game publishers, who dominated the video- game industry in the 1990s, lose their edge so quickly? Some trends have conspired to put them at a disadvantage. Better visual realism, for instance, has made cultural specificity of paramount importance—Mario, Nintendo's four-foot plumber that starred in many of the company's most popular games, doesn't have the universal appeal he once had. But the Japanese firms have also failed to stay relevant to Western consumers, either through their own design prowess or by courting partnerships. "There are three things that make a hit in the current market," says Simon Cox, editor in chief of the magazine Xbox Nation. "It's either culturally relevant, superrealistic or tied to a strong license. Japan currently scores zero on all three of those with their games."

The divergence in taste between U.S. and Japanese gamers is partly a matter of demographics. Videogames started out as part of the toy business, and at first publishers targeted mainly 8- to 12-year-olds. Sony's PlayStation in 1995 convinced preteens that gaming was cool, and this generation is still playing into their 30s. "What's surprised people is that the age of gamers has gone up dramatically," says Arcadia's Taylor. Cute and cuddly cartoons like Mario and Zelda were the dominant figures of the '90s, but the icons of the new millennium are gun-toting tough guys like Grand Theft Auto Vice City's Tommy Vercetti—invented outside of Japan.

Growing cultural differences between Japanese and Western gaming have put Japanese firms in a precarious position, and many of them have been slow to respond. Sega and Namco, for instance, still cling to their roots as arcade-game companies, even though consoles have eclipsed arcades as the platforms of choice. Both firms stubbornly continue to release some of their most popular franchises in arcades first and only later on consoles, which works in Japan, where arcades are still popular. But in the United States, prior success in arcades adds zero promotional value.

Japanese publishers also made a series of unwise decisions about which platforms to support. When Sega stopped making its own videogame console in February 2001 and focused instead on making games, it threw its support behind Microsoft's Xbox, which was moderately successful in the United States, weak in Europe and moribund in Japan. In November 2002, Capcom announced it would publish five Gamecube-exclusive titles—one of which, the highly successful Resident Evil franchise, was birthed on PlayStation—because a top executive had been wooed by Shigeru Miyamoto, the legendary designer behind Donkey Kong and Mario Brothers. Of the five, one flopped, another was a cult hit, one was canceled and the last two have yet to ship. Tecmo's best designer declared in May 2002 that he would make games only for Xbox because it was the most powerful console on the market.

Which leads to another of the Japanese firms' woes: its game creators are allowed to act like prima donnas. Even though gaming has become an $18-billion-a-year global business, Japanese firms still pretend it's a cottage industry. Japanese publishers have also failed to make extensive use of market research and consumer feedback. "The standard model in Japan is that the publishing partner sees the game when it's nearly finished," said the former head of a major U.S. publisher. "If you're off target, you won't know it without feedback."

While Japanese publishers dug themselves into a hole, top Western publishers aligned their products with the evolving tastes of the U.S. market. Many of them acquired some of Hollywood's biggest licenses: Harry Potter, "Spider-Man: The Movie," "Finding Nemo" and the rights to several Tom Clancy novels. Sports videogames soared in popularity, but the lion's share of that market went to U.S.-based Electronic Arts, as Sony's and Sega's games suffered from poor quality and marketing, respectively. "The game market in the West has expanded from fanatic gamers to more general public," says Nomura Securities analyst Yuta Sakurai. "That's why sports and Hollywood-film-based games—the two strengths of EA—have gained popularity." Also, European companies like Eidos, Atari and Ubi Soft got a leg up in the North American market by buying U.S. publishers and developers in the last 10 years. These acquisitions gave them an infusion of modern business and development practices that most Japanese publishers have yet to acquire.

Some Japanese publishers are starting to get the message. Several of them have gotten over their aversion to U.S. licenses; Namco, Capcom, Sega and Square have acquired the rights to such Hollywood properties as "Escape From New York," "The Matrix" and Mickey Mouse. Konami recently moved the headquarters of its games division to Los Angeles. And Japanese publishers Square and Namco are aiming at the PC game market, with massively multiplayer online games such as Final Fantasy XI and an as-yet-unnamed role-playing game from U.S.-based publisher Flagship Studios.

The challenge for Japanese publishers is to restructure their businesses quickly enough to survive the transition from the current generation of consoles to the next. It won't be easy. The cost of launching each game is expected to skyrocket from $5 million-$10 million to about $15 million-$20 million. Don't expect the Japanese to give up without a fight. "It's not easy for us to change our mind-set," says Namco's Haraguchi. "But we will come up with ideas that target the U.S. and Europe first." Let the games begin.

With Kay Itoi in Tokyo

© 2004 Newsweek, Inc.

 

[Comrade]

How did Japanese game publishers, who dominated the video- game industry in the 1990s, lose their edge so quickly? Some trends have conspired to put them at a disadvantage. Better visual realism, for instance, has made cultural specificity of paramount importance—Mario, Nintendo's four-foot plumber that starred in many of the company's most popular games, doesn't have the universal appeal he once had. But the Japanese firms have also failed to stay relevant to Western consumers, either through their own design prowess or by courting partnerships. "There are three things that make a hit in the current market," says Simon Cox, editor in chief of the magazine Xbox Nation. "It's either culturally relevant, superrealistic or tied to a strong license. Japan currently scores zero on all three of those with their games."

The divergence in taste between U.S. and Japanese gamers is partly a matter of demographics. Videogames started out as part of the toy business, and at first publishers targeted mainly 8- to 12-year-olds. Sony's PlayStation in 1995 convinced preteens that gaming was cool, and this generation is still playing into their 30s. "What's surprised people is that the age of gamers has gone up dramatically," says Arcadia's Taylor. Cute and cuddly cartoons like Mario and Zelda were the dominant figures of the '90s, but the icons of the new millennium are gun-toting tough guys like Grand Theft Auto Vice City's Tommy Vercetti—invented outside of Japan.

Thanks NATO, good article.

I've been an avid gamer for decades, and never once enjoyed playing a Japanese game in that entire time. They were always too childish, much like the Japanese entertainment industry in aggregate tends to be.

Like the article says, their cute and cudly culture which creates things like 'adult' cartoons in the form of anime, Hello Kitty products for adult women, and a porno industry built upon teens pictured in school-aged uniforms, and there is nothing wrong with that, really. But, certainly this isn't what Americans demand, not did the Japanese, before such childishness formed from the foundation of peace and prosperity guaranteed by the US since WWII among the formerly warrior-based Japanese society.

And although it's why I adore Japan, we don't see exports from their entertainment market beyond the appeal to our childish needs.

The biggest point in the article is that any games which appeal to any person older than 12 today, are all pretty much American products. Who created first person shooters? America (Castle Wolfenstien). Who established the Massively Multiple Online Games? America. Who created 'Sims'? America.

Now the last major Japanese release I can remember as 'big' was 'Daikatana' at least a year back, which was a horrible game released after years and years of development.

And Japanese adults? The only game I've seen them play is Patchinko, with a vengeance! They've got 1,000 of these parlours, each with hundreds of machines. And even though gambling is illegal in Japan, you can play any patchinko game for cold hard cash courtesy of the Yakuza, who takes in billions in unchalleged revenue for providing such a service 'discretely'.

Anyway, the point is that American software dominated since the early 90's in the PC market, and with the Xbox and Halo type games (among a vast market of other types) that appeal to all ages, the lead in America tech is now undisputed, and shall remain so for a long time.

I'm old enough to remember a time when Japan was considered the prima-donna of high tech and innovation in the world, or at least according to the Liberal dogma of that day. This is just another indication of how stupid it was to listen to protectionist Liberals then and how the older I get, the more shit I hear the more I can be assured of how wrong they will be proven.

Is that a response? No, just thoughtfull rambling. :cof:

 

[NATO AIR]

Is that a response? No, just thoughtfull rambling. :cof:

:happy2: nothing wrong with that on your sunday morning.