Capcom's Inafune: Japan more doomed than ever

[Chris Nahr]

By Hiroko Tabuchi at the New York Times: TGS report and interview with Capcom's global development boss Keiji Inafune.

First some facts, from the TGS report:

Global sales numbers for the entire industry are hard to come by. But Japan’s share of the world’s video game market, both hardware and software, has fallen to slightly more than 10 percent in 2009, from estimates as high as 50 percent in 2002, based on figures from the Entertainment Software Association, the Japan External Trade Organization, and the research companies DFC Intelligence and Enterbrain.

Inafune says that excluding Nintendo, Japan's global share is now actually only 8%.

Nintendo has been the major exception, a Japanese game company that has remained dominant. [...] But because the best-selling games on Nintendo consoles are largely made by Nintendo, the rest of the Japanese game industry has been excluded from that action.

Meanwhile, Japan’s domestic game market is shrinking, down by 20 percent since 2007, to 549 billion yen ($6.4 billion) in 2009, according to Enterbrain.

During that time, the market in the United States surged to a record $21.4 billion in 2008 before a recession-driven decline to $19.7 billion in 2009. But that was still a total increase of 10 percent over two years for the American market, according to NPD.

As Japanese development studios struggle with declining sales, analysts say they are falling behind their American rivals in sheer investment power. A budget for a blockbuster game in the United States can approach $50 million, a figure few Japanese developers can now match.

There are a bunch of insider quotes in the two-page article but the juiciest bits come from the Inafune interview, of course:

I look around T.G.S., and everyone’s making awful games. Japan is at least five years behind.

It’s like we’re still making games for the last generation of game consoles.

Capcom is barely keeping up. The ideas, game play, design – there’s no diversity, no originality.

Q.: Why do you think Japan is so behind?

A.: A lot of designers, if they find a genre that works for them, they stick with it. A lot of designers just stick to a set formula.

That doesn’t work any more. You can’t just tweak the graphics, work just on image quality. You can’t compete on that.

The business side is not keeping up with investment. You need to be prepared to invest 4 billion yen or more on a game, and then spend 2 billion yen more to promote it. But Japanese companies can’t do that. So we’re losing out to the West in terms of investment in games.

It’s a vicious cycle, a deflationary spiral. Because you don’t invest, you can’t sell games, and because you don’t sell games, you can’t invest.

On Monster Hunter as the quintessential Japanese game:

Monster Hunter is a Japanese game to the core, down to the controls. If we changed anything, it wouldn’t sell in Japan any more. [...]

Lost Planet 1 was designed for the Western market. But the guys who made Lost Planet 2 were misguided. They made it too Japanese. They made it like Monster Hunter.

On management at Capcom:

I’ve been fighting for many years now to change these things [at Capcom] one by one. But the business side is resisting change. They think developers are stupid and don’t understand business. That’s why I can’t be on the board of directors.

That’s the difference between Capcom and Nintendo. At Nintendo, 80 percent of the board is from development. At Capcom, it’s zero. All the business side cares about is protecting their own interests.

On Japan's only chance:

It’s actually too late to start entering the U.S. market now. That will take years. The next big market is China. My sights are on Asia. We need to learn from Korea. We need to go to China.

Japan is isolated in the gaming world. If something doesn’t change, we’re doomed.

[Adree]

He's 100% correct.

[Lynch]

Japan has still itself, Japan. Despite an obviously shrinking market.

A budget for a blockbuster game in the United States can approach $50 million, a figure few Japanese developers can now match.

$100 million for RDR.

[Royal Fool]

It was disappointing how Capcom's expansion plans to the West failed.

The outlook is bleak, both for them and the Japanese industry.

[Foxstab]

Capcom might've won NeoGeo, but lost in the overall war.
"The future is now!"

[PapaSmurf]

Blockbuster games now average $50m.

[Bahimiron]

But because the best-selling games on Nintendo consoles are largely made by Nintendo, the rest of the Japanese game industry has been excluded from that action.

I sure hope someone comes in here soon to explain to us that Inafune is wrong and this doesn't really matter!

[Paulus]

It was disappointing how Capcom's expansion plans to the West failed.

The outlook is bleak, both for them and the Japanese industry.

Royal Fool,

Capcom is actually doing fairly well, and has been the most successful 3rd party Japanese publisher this generation.

[Ex-S Woo]

He's 100% correct and most people I know who work in the Japanese game industry echo his remarks (actually, some were interviewed for that article).

The fact that even Sony is moving most of their development efforts away from Japan (SCEJ) to Europe and America is very telling.

Ironically, the main positive from this turn of events is that there is a bigger demand for foreigners to work in Japanese companies and I've seen a few in Tokyo who've landed more substantial roles outside of localization as a result.

[Foxstab]

So, in essence, Japan are out-sourcing. D0med.

[sam and the firefly]

He's correct if you're only talking about next-gen consoles. Third-party developers are lining up to make stuff for the 3DS, which is the most anticipated hardware launch in years and years.

No-one would deny that Japanese developers have struggled to keep on the technological cutting edge, but it's also pretty clear that a lot of people don't play that way either.

[CLWheeljack]

Is the market for Japanese produced games shrinking, or just the market share?

To be honest this could just be a natural correction, Japan innovated the video gaming market, and have had disproportionate influence on the market thus far. However, in terms of global importance, population, etc. there isn't any real reason that Japan should dominate the global games industry. There's no reason to be surprised if the Japanese game industry eventually becomes like any regional (ie non-Hollywood) film industry: servicing local language interests with occasional high visibility projects.

[Linoleum]

It also doesn't help that a lot of Japanese developers just didn't have the software engineering skills to deal with increasingly complicated hardware. The development methodologies also lagged.

[Murbella]

God i hope they don't learn from Korea. I actually like Japanese games a lot, even if they are sometimes really arrogant about what they believe is best even if it goes against everyone else (square i am looking at you) and many games are stagnant (although this is the case with some western series too obviously).

Korea is known for a mass assembly line of shit budget freemium mmorpgs. It almost seems like a new one comes out pretty much every month. All the same, all crappy beyond belief.

[PapaSmurf]

I bet having to deal with Sony's programming environments led to some attrition.

[Teiman]

Maybe Japan can start loving the PC and small indie games?.

I can't understand how the country that created animes like Ghost In The Shell, Paranoia Agent and Elfen Lien can't make videogames that are more what a PC dude like me may want to buy.

Why japan has to be so focused in consoles?

[Damien Neil]

Korea is known for a mass assembly line of shit budget freemium mmorpgs. It almost seems like a new one comes out pretty much every month. All the same, all crappy beyond belief.

Based on 20 minutes with Vindictus, it doesn't look crappy at all.

[Mordrak]

Based on 20 minutes with Vindictus, it doesn't look crappy at all.

You've only spent 20 minutes with Vindictus. If you look closer, you can see the seeds of shoddy design and freemium influence.

In shops, you can't just buy one of many items, even though you may need only one. You can only buy them in stacks, which clutters your inventory or eats your money. A cluttered inventory means eventually you're going to want to buy more inventory bags!

Another design decision along that route is to make your equipment slots take up space in your inventory rather than on your avatar, like most RPGs generally do it. Why would they do that? Well, to get you to buy more bags, either that or they are just lazy. It's really annoying to try and sort your inventory and keep your equipment in one place.

Using a web browser for their auction house? It's terrible. It causes my game to hang for a few seconds and I have to go through that hang every time I want to switch between searching the auction house to price check and selling an item on the auction house.

Plus, you haven't gotten to the silver token system yet, which thankfully refreshes every two hours now, but on releases it'll refresh probably twice a week.*

Let alone the crappy p2p system. The core gameplay is good and I think there's a lot of great ideas for MMO developers to steal. Everything around it is pretty friggin shoddy.

*To be fair, that's going to be partly how they make their money. It's basically an arcade token system, but it could make Vindictus very expensive for you too.

Edit: Another mechanism they use to fill up your inventory (at least so far) is they have enemies drop items you have no use for until you reach a later point in the story. So you're holding on to all this crap and eventually end up selling it because you're out of room and then find out later, oh wait, I needed those!

[Murbella]

Well, i didn't specifically say that Vindictus was one of the korean mass assembly line mmorpgs because i haven't tried it, but i have tried or looked in to quite a few. They seem to have a thriving industry based on pumping out cheap, budget freemium mmorpgs and that is the first thing i think of when i see a korean game.

It doesn't mean every korean game is one of them, but every time my friend links me a "wow a new cool mmorpg and it is free" and i notice it is korean i groan...

[Charles]

It's amazing to see that level of self-analysis from a Japanese studio. Makes me hopeful.

I don't think it's too late for the Japanese to make a comeback, but they need to start be addressing gameplay polish rather than visual polish, and understanding what makes western games so different. And in general, that difference is the controller feel.

[Teiman]

You've only spent 20 minutes with Vindictus. If you look closer, you can see the seeds of shoddy design and freemium influence.

In shops, you can't just buy one of many items, even though you may need only one. You can only buy them in stacks, which clutters your inventory or eats your money. A cluttered inventory means eventually you're going to want to buy more inventory bags!

Another design decision along that route is to make your equipment slots take up space in your inventory rather than on your avatar, like most RPGs generally do it. Why would they do that? Well, to get you to buy more bags, either that or they are just lazy. It's really annoying to try and sort your inventory and keep your equipment in one place.

Using a web browser for their auction house? It's terrible. It causes my game to hang for a few seconds and I have to go through that hang every time I want to switch between searching the auction house to price check and selling an item on the auction house.

Plus, you haven't gotten to the silver token system yet, which thankfully refreshes every two hours now, but on releases it'll refresh probably twice a week.*

Let alone the crappy p2p system. The core gameplay is good and I think there's a lot of great ideas for MMO developers to steal. Everything around it is pretty friggin shoddy.

*To be fair, that's going to be partly how they make their money. It's basically an arcade token system, but it could make Vindictus very expensive for you too.

Edit: Another mechanism they use to fill up your inventory (at least so far) is they have enemies drop items you have no use for until you reach a later point in the story. So you're holding on to all this crap and eventually end up selling it because you're out of room and then find out later, oh wait, I needed those!

Reading text like this one make me feel the requirements of free to play games conflict with making games fun.

[Tankero]

I don't think it's too late for the Japanese to make a comeback, but they need to start be addressing gameplay polish rather than visual polish, and understanding what makes western games so different.

One thing they desperately have to address is the kind of universes they create for their games, at least those games that need a storyline to keep the player interested.

They seem to be telling the same story over and over again (much like their gameplay, as noted), because it's what works. The player tends to be the center of the JRPG universe in a way that limits the scope that universe can have. Their storylines are just very... sterile and monochromatic. Is that a detriment to Japanese games? Well, it is from my perspective. Perhaps it could be seen as an example of the larger systemic problem; a data point rather than an actual "issue".

[Syzygy]

Maybe Japan can start loving the PC and small indie games?...
Why japan has to be so focused in consoles?

PC gaming has always been niche in Japan from the start, in comparison with consoles. I was a PC gamer when I lived in Japan through most of the 90s and early 00s and always had to go to very specialty, niche shops in Akihabara to get the latest PC releases. This is almost definitely due to the fact that the whole console industry is a domestic industry that was particularly well tuned to serving the needs of the Japanese consumer.

It's particularly notable as PC gaming is much bigger in Korea and Taiwan.

Especially now, Japan is kind of like a small bizarre island of reality in which only PSP titles have a chance at doing high numbers, but that platform is nearly dead in the rest of the world.

[Charles]

One thing they desperately have to address is the kind of universes they create for their games, at least those games that need a storyline to keep the player interested.

They seem to be telling the same story over and over again (much like their gameplay, as noted), because it's what works. The player tends to be the center of the JRPG universe in a way that limits the scope that universe can have. Their storylines are just very... sterile and monochromatic. Is that a detriment to Japanese games? Well, it is from my perspective. Perhaps it could be seen as an example of the larger systemic problem; a data point rather than an actual "issue".

See, I think a lot of the times, their settings are unique and interesting and it's the gameplay that kills them. Sure the narratives suck, but we're not much better. In fact you use the term sterile and monochromatic but honestly I feel that way about the majority of western games right now as well.

[Mordrak]

Reading text like this one make me feel the requirements of free to play games conflict with making games fun.

For the most part, they are relative minor annoyances individually, but they are transparent and in aggregate frustrating.

When it comes to combat, Vindictus is a very good online game. What I'm waiting to see, is basically L4D, in a fantasy setting that builds to focus on raiding progression exclusively. I mean, that's basically what WoW has become about with half or more of its players raiding.

WoW polish + Vindictus combat, in a L4D form could be killer. They could charge 5-10 dollars a new raid or do it in packs of 4-6 or whatever.

Vindictus also has some consistency issues in regard to its artistic presentation. You go from what is introduced as LotR type realism to static anime character drawings, npc-less environments except for trading with pigs and cats. It's cute, but at odds with most of the presentation.

[PeterK]

It's amazing to see that level of self-analysis from a Japanese studio. Makes me hopeful.

I don't think it's too late for the Japanese to make a comeback, but they need to start be addressing gameplay polish rather than visual polish, and understanding what makes western games so different. And in general, that difference is the controller feel.

Charles, can you elaborate a bit on what you mean by "controller feel"?

[Cl_Flushentityhero]

Well, I think a lot of his comments speak to the state of gaming in general.

[Tankero]

See, I think a lot of the times, their settings are unique and interesting and it's the gameplay that kills them. Sure the narratives suck, but we're not much better. In fact you use the term sterile and monochromatic but honestly I feel that way about the majority of western games right now as well.

What examples would you offer? I'd grant you Lost Planet as an interesting setting, with the caveat that it's barely explored or fleshed out in any way.

[JoshV]

Hmm, interesting article\interview. I predict that the Japanese devs will slowly be forced to migrate to handhelds, where they can compete with smaller budgets.

[Dave Long]

Charles, can you elaborate a bit on what you mean by "controller feel"?

I agree. I'd like to hear more, because frankly, Japanese games have always had tighter "controller feel" than western games almost universally.

I think Inafune is just looking for a scapegoat for poor performance here. You can't just single out Nintendo as successful and then brush it off like it doesn't matter and you can't possibly be like them.

The problem right now is simply the tastes of Japanese gamers and gamemakers and how those tastes don't coincide with the hardcore gamer tastes here in the US. The best selling western games right now in the US are of a type that Japanese gamemakers simply don't understand or care to understand. Eventually that will shift. Instead of chasing western designs, they should've been focused on their strengths in character design and innovative gameplay. Get back to that and the successes will return. Handing out Devil May Cry to egotistical western producers is not the answer.