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Whatever happened to the Japanese video games industry?

NIS America interview: Whatever happened to the Japanese video games industry?
Disgaea – Nippon Ichi’s most successful game, dood

GameCentral talks to NISA about their recent split with Atlus and the problem with bringing Japanese games to Europe.

It may seem odd, given the name, but NIS America has long been a good friend to fans of Japanese games in the UK. The American branch of Disgaea publisher Nippon Ichi Software not only brings their own games to Europe but also those of other companies, include Persona developer Atlus. But the forthcoming Odin Sphere Leifthrasir, which we saw at a recent press event in London, will be the last Atlus games they publish over here.

Ever since Sega bought Atlus in 2013 the relationship with NISA has been strained, and now the two companies have broken ties completely. But although you’d imagine that Sega Europe would simply step in to fill the gap they’ve failed to confirm anything of the sort. At one point they said it’s all down to Atlus, and at another they claimed they’re ‘very interested’ in bring games such as Persona and Etrian Odyssey to Europe.

Atlus failed to provide us with any definitive statement for this article and, like many fans, we’re worried that even if they do publish big name games like Persona 5 they won’t bother with the smaller titles like Odin Sphere. And that would be a shame, as NISA’s line-up for the next few months looks excitingly eclectic and very, very Japanese…

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Grand Kingdom (PS4/PSV)

Out on June 17, Grand Kingdom is by a small Japanese developer called Monochrome and overseen by director Tomohiko Deguchi – who worked on the earlier Grand Knights History. Despite the similar names the two games have no official connection, although Deguchi also used to work at Odin Sphere developer Vanillaware, and you can see a similarity in the art style and animation of the large painted sprites that populate the game.

Grand Kingdom has a complex-looking strategic level, where you upgrade units and craft items, and a board game-like map where you manoeuvre your troops and set up defences. The meat of the game though is turn-based battles that take place across several 2D planes, a bit like Guardian Heroes. We were given a quick go, and it proved to be a fun new take on traditional tactical role-players, as you try and make sure your weaker ranged units are protected behind armoured allies, and that they in turn don’t injure a friendly with an inaccurate magic or arrow attack.

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Odin Sphere Leifthrasir (PS3/PS4/PSV)

Out on June 24, this is a remake of the late era PlayStation 2 game, which at the time was hailed for the quality of its graphics and its enormous 2D sprites – although the slowdown this caused meant that it was always a flawed experience. Its appearance on more powerful hardware solves that problem instantly, allowing you to properly enjoy an action role-player very much in the style of Vanillaware’s own Muramasa: The Demon Blade.

Playing a section of the game ourselves the visuals are absolutely gorgeous, all hand-painted and unlike almost anything else on the PlayStation 4 at the moment. The gameplay has never been up to quite the same quality, but it’s competent and although the platforming feels a little floaty there’s a solid heft to the combat. The game’s greatest moments continue to be the oversized bosses though, which impress as much as any 3D creation. This new version also boasts new stages, weapons, and more combo-orientated combat.

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These were the games were able to play ourselves but NISA also has Touhou Genso Rondo: Bullet Ballet schedule for late 2016 on the PlayStation 4. Classified as a ‘shoot ‘em-up fighter’ it’s a spiritual sequel to the little known WarTech: Senko no Ronde. Which is to say it’s a mixture of bullet hell shooter and fighting game. Or in other words just the sort of entertainingly odd mishmash of niche franchises that, if not for companies like NISA, we’d never see in the UK.

Also mentioned briefly was Psycho-Pass: Mandatory Happiness, a visual novel based on an anime, that’s due out on September 16 in Europe. There’s also ‘creepy cute’ isometric survival horror Yomawari: Night Alone due in late 2016, and developed by Nippon Ichi themselves.

Except for Touhou Genso all of the games will be released at retail as well as digital, often with fan friendly special editions. We were impressed by the games and NISA’s obvious enthusiasm for all things Japanese, so we took the opportunity to chat with Partners Relations exec Alan Costa, and Will Curley of UK distributor Reef Entertainment, about both the current state of Japanese gaming and its prospects for the future.

GC: Now that you’ve lost the deal with Atlus are you going to try to become the one stop shop for Japanese games in the UK?

AC: Yes, we’d like to work on as many titles as we can. Sometimes, unfortunately, the business side of things doesn’t allow for that, but provided the game meets our standards – it’s a good game – we’re interested in bringing it out.

GC: How popular are Japanese games in the UK, compared to on the Continent? I know anime and manga is much bigger in countries like France, but does that go for games as well?

AC: I think the fact that we continue to grow, and we do get more and more releases every year, is testament to the fact that these types of games are still popular. There is still a core group of people that do want to play them. Compared to maybe 10 to 15 years ago, is the market as large as it was? No, certainly not.
I think that the Western industry has really grown and matured a lot more in those years, and arguably maybe the Japanese industry hasn’t – from some people’s perspective. But that said, I think Japanese content offers something incredibly unique, and certain people really, really like that. And I think that even though that fanbase might contract or grow, depending on the year and the climate, it’s always there.

And it’s just making sure that we tap them directly and reach out to them, and that’s partly why we have Reef Entertainment here helping us out with that. And then likewise in France and Germany we do have people on the ground there, really getting that content into the hands of people that want it.

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GC: Do you think you can grow back the market to something like its previous levels? Games like Dark Souls seems to show that’s not impossible for even quite niche games.

AC: Definitely. The market can certainly grow, and there’s a lot of people out there that have probably never touched a Japanese game before in their lives – or at least not without realising it. And the key to doing that is a) making sure we get quality titles, which I think we do a fairly good job of and b) making sure the proper channels are used to let people find out about that.

And there’s a two-part element to that. One is who we chose to work with for distribution, again bringing up Reef, and the second is yourself – the media. Making sure opinion leaders, as it were, get a chance to have their hands on games and talk about them. As a company we don’t want to sway media people’s opinion one way or the other….

GC: Surely you do? I think that’s a perfectly reasonable aspiration!

AC: [laughs] To be honest with you, not necessarily. Because to put a game into someone’s hands that they would hate, and then give a negative review or completely misunderstand, it actually hurts us. And that’s happened before. So making sure that we’re upfront with what type of game it is; really giving press and people who are going to be playing the games a good rundown of what the game is and what it offers, and then making sure that we’re attentive to those questions that do arise, either from media or users, when the game does come out.

So, I feel that provided we can continue to get the games into the hands of opinion leaders and media, and then follow up with that on the ground via social media support, I think the market can continue to expand.

WC: I think what’s also worth touching on is the divergence in the hardware which is popular in Japan compared to the West. It’s because when you go back to the PlayStation 2 era you had one global, standard console that was popular in both markets. But now we’ve got the Western market which is [home] console-based and PC, and the handheld market in Japan.

But I actually think the one format that unites the two is Steam. You can see on Steam how many more Japanese games are coming out. You’ve got Danganronpa and Disgaea just recently, and it seems like Steam now has really good representation from Japanese developers. And, if anything, that’s becoming the format where things are becoming available globally.

GC: Do the Japanese use the PC for playing games? I’ve always been led to believe they don’t, in general, but it’s very hard to get a definitive answer.

AC: Fantastic question! 20 or 30 years ago, yes. Very, very much so. Koei, you’ve heard of Romance Of The Three Kingdoms? That was developed for PC. If you’re familiar with Falcom, the people who make Ys, they started as a PC developer.

GC: And they had that weird little 8-bit computer that nobody else used didn’t they? What was that? It was the MSX and something else…

AC: Oh yes, ah… I think it was either NEC or Sharp? [Not that we could remember at the time but the Sharp X1 and NEC PC-88 were the other popular home computers in Japan in the ‘80s – GC]

So there is this traditional base of PC gamers and fans out in Japan. And even up until recently Falcom would release a lot of games only on PC. Like, for example Ys Origin came out on the PC only. It’s only recently that they’ve started looking more at the console market. That said PC gaming is certainly not mainstream in Japan. It’s seen as something that is really, really hardcore.

But coming back to what Will mentioned a few minutes ago, Japanese developers now, because the market situation over there is incredibly interesting, with mobile becoming bigger and bigger and console sales year-over-year going down, they can’t really ignore it – PC and Steam.

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GC: So when they release things on Steam they’re doing so primarily for a Western audience?

AC: Well, I can’t speak for other companies, but I think it’s primarily for people in the West. For two reasons maybe, the first is that a lot of people in Japan still don’t have gaming PCs that can handle games. And secondly it’s nobody really thinks of it as a format that can play games.

JW [Reef’s Jaspreet Marwaha]: Space is an issue is a well. A lot of people spend a lot of time on public transport, and when you get back to your apartment you’ve not really got a lot of space for a PC as well as a console and TV.

GC: So here’s the biggest question of all: what happened to the Japanese industry at the beginning of the last gen? You can piece together theories, but since they never talk about it you feel like an archaeologist looking at dinosaur bones and just basically guessing. And to extend that metaphor, the death of the Japanese games industry does feel almost like an instantaneous extinction level event.

AC: Honestly, I don’t think there’s one answer. I can throw out some ideas that I’ve noticed, but don’t take this as gospel. But for one… population. You have a shrinking population over there, so you have in essence less people that are the right age to play these games. It’s an aging population, which is why you see in anime stuff that is either derivative or really pandering – because that’s the only market that’s there.

Another reason is that the creators have been getting older and there’s no new blood to take their place. So these ideas remain very stagnant, whereas you have Western developers who are… for example, I’m not a fan but Call Of Duty taking RPG elements and throwing them into a first person shooter was genius. Where’s that in Japan? Where’s them taking ideas from Western developers and incorporating them into their games?

Grand Kingdom is, I think, a really good example of someone trying to do that. Creator Tomohiko Deguchi is 32-years-old and he took influences from a lot of different places, from old RPGs he loved as a kid, board games, mobile games, and a lot of other things.

Another reason Japanese games have reached this weird place is mobile. This also ties in with the aging population, but because people who are playing games are getting older they have their handheld systems. I lived in Japan for seven years and my boss was a huge gamer, and so he had a PSP.

But at the same time Square had started to port a lot of their older games to smartphones. So he was playing Final Fantasy IV: The After Years on his smartphone, and because it was so convenient to have it on his phone he really liked that. And other younger people too, that’s kind of what they know now. So I think all these things together contribute to the current situation of Japanese games.

WC: I think also, in the West, when we hit the 360 and the PS3 Western publishers adopted middleware very quickly and they were able to take advantage of cost efficiencies from Unreal Engine, and EA had their Criterion purchase. Whereas for most Japanese publishers, I think they were still focused on in-house engines which were built for the PS2. I think it took a long time to get out of that mindset.

Etrian Odyssey Untold: The Millennium Girl (3DS) – that's gotta be worth a mark on your map
Who will publish our beloved Etrian Odyssey games now?

GC: I think that is one of the most important reasons there. I remember thinking at the time: give them a couple of years and they’ll catch back up. But that never happened.

WC: Yeah, yeah. I think Capcom were one of the first ones to start using Unreal middleware, but still I think a lot of big Japanese publishers went back and recreated brand new engines for that generation of hardware. And then when the PS4 came out they just started remaking them again.

AC: That’s a really good point.

WC: Whereas I think with Western developers they saw a need to have industry standard engines that everyone could contribute to and make better. I didn’t see that in Japan at the same time.

AC: Fantastic point. Square Enix is a good example, with the Luminous engine for FFXIII. They created this whole engine… people have various opinions about FFXIII but they kind of needed to continue using it to get some value for money out of that.

GC: I already worry about this for Western gamers, but where do younger gamers in Japan start learning about video games? Because over there it must be purely mobile games. They must see home consoles as some relic from the past. You mentioned anime, and it seems to be the same problem, in that instead of trying to broaden out their audience they’re just creating fan service for an ever shrinking hardcore.

AC: I think they’re reactive in a lot of situations, instead of proactive. And I also think that most companies, anywhere, they’re worried about feeding people. [laughs] And so, what are ya gonna do? Are you going to say, ‘Hey, if we throw in a bunch of TA in this anime we’re guaranteed to at least probably sell this much. Whereas we could create something really creative and cool but who knows whether it’s going to catch on or not?’

GC: Which is of course, exactly the same mentality you see in games.

AC: Exactly. But to be honest I don’t think it’s a problem limited to Japan.

GC: Oh, no. Not at all. But it does seem to be magnified there.

AC: That was a really good question about kids and games. A lot of big companies, like Square and Capcom, are using mobile more. And I don’t necessarily know the strategy behind that, but they really do use mobile and sometimes I think they see a lot of success. And I don’t know the breakdown between younger and older players, especially when they reuse elements from franchises like Final Fantasy, but they’re really trying.

Alan Costa - a fan himself
Alan Costa – a fan himself

GC: I was just talking to someone from the industry about classic role-playing brands on mobile, and they were saying how they’re always simplified from the console originals. And it broke my heart, because what impetus is there for younger gamers to make the effort and move on to a console after that? I don’t see that as being a natural progression at all, from their point of view.

AC: Right. It’s just conjecture on my part, but I really feel that a lot of times what they try to do is to get it on mobile first and then make a port that would be a little better and more complex. One example would be Final Fantasy IV: The After Years, which Square Enix released as a compilation on PSP and then, supposedly, Final Fantasy Agito, which was the Final Fantasy Type-0 mobile game.

They originally had planned to port that to Vita, but unfortunately that didn’t work out. But if the new Valkyrie Profile game they announced for mobile does well maybe they’ll do that too. I don’t know if that strategy’s working for them or not but…

GC: Hmm… it’s not resulting in many more consoles games at least. Do you try to advise any of the Japanese companies that you publish? Presumably they ask you questions about the Western markets?

AC: To be honest, not so often. We have that really good dialogue with our head office, and we offer feedback, but for the most part Japanese developers are focused on… Japan. And a lot of times a Western release is gravy, it was never on the cards originally. So I don’t know how interested they are, at least at the moment, in catering things towards the Western markets. Honestly, they don’t have their fingers on the pulse at all.

GC: I always try to remind people of that. Like when Nintendo do something weird and seemingly inexplicable it often does make a kind of sense once you realise they’re only thinking of the Japanese market. Japanese developers are at their worst when trying to ape Western games, but on the other hand they do seem so oblivious to some of the problems they walk into.

WC: Yeah. I think the Japanese market’s profitable enough as well, that the profitability of one unit you sell in Japan is far higher than the Western market. So you can develop your game efficiently enough to still realise a good profit from just the Japanese market. Whereas if you’re trying to develop a Western game you have to be able to target it globally to recoup. And so I think probably there’s not the need for a lot of Japanese developers to think about those other markets. And so they get treated as a bonus if the games come across.

GC: And yet the unique cultural identity that ensures is a major part of the appeal. So it’s a difficult balance… In terms of Nippon Ichi games, does that count as internal development to you?

WC: Yes, NIS America is a wholly owned subsidiary of Nippon Ichi Software. And we generally have our pick of what we’d like to do. The review process is actually fairly similar to outside games too. We look at it, we think, ‘Okay, is this gonna work out in the West or not?’ And we make decisions based on that. But yeah, we do consider our own games in that way as well.

GC: Disgaea is obviously your number one franchise, but what do you see as your other key internal titles? I was looking at your gameography earlier and I’m not clear what other franchises are actually still ongoing?

AC: We don’t really have much to say in the really early stages of development. I think they, our parent company, has tried a number of things – The Guided Fate Paradox and The Awakened Fate Ultimatum, for example. Kind of a start of a little series there. The Witch, I think they announced a new game for that universe over there. So I think they’re trying to make new things, it’s just kind of throwing things at a dartboard and seeing what sticks. I know they are trying to create more franchises, because having just one isn’t ideal.

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GC: In terms of retail vs. digital download… I hoped that would be the saviour of Japanese-made games in the West but how has that actually worked out? Is that where the majority of sales are now? Because I see all these boxed sets, which I know you’re very big on…

AC: I can’t disclose exact percentages, but retail is still generally larger overall. But digital, and this is for everyone I’m sure, is only growing. Only getting bigger.

GC: But it’s not going to become bigger for you before any other company?

AC: I don’t believe so. And the reason for that is, generally speaking – and I say this as a fan and collector of Japanese content myself – most people with that mindset prefer to have a physical product. Which is also why we have a market for collectible limited editions.

GC: How many games do you think you’ll publish a year, now that Atlus is out of the equation? Is there a target?

AC: I think this year so far it’s… seven upcoming. Last year we had, I think, 16. And I think we had 16 the year before that. But honestly, we’ll do as many as we can! The more the better, essentially.

GC: And how do you deal with… for myself, organising games reviews I have to be pragmatic. I have to look at how interested people are likely to be in a certain game and how long it’s going to take to review. And an obscure, 60 hour long Japanese role-player is a difficult thing to deal with. How do you promote those games in particular? Does that just go straight through to the community?

AC: Good question. More and more it is becoming community management and social. And really connecting with your fanbase one-on-one is super key. It’s finding out where these people are, whether that be a website that covers Japanese games, and being there with answers on the message boards; going to the message boards and being active on there; it’s Twitter, Facebook, things like that…

GC: But again, I worry that that’s just preaching to the converted. I mean, obviously you’re right to do it, but…

AC: But we do also go to things like MCM London Comic Con [which is this weekend – GC], where we usually have the biggest booth. We are very open to all press, but you can’t force people to cover something. And there have been large sites, particularly in North America, where you’d think your job is to promote and cover video games and so we’ll make a pitch to them and… but at the end of the day…

GC: I have looked at sites and wondered why they haven’t covered what to my mind are interesting and relatively prominent releases.

[A rumble of agreement from around the room]

AC: I feel like if you look at anything nowadays, and this is like the blessing and the curse of the Internet, it’s that things have become incredibly fragmented and small. You have communities around everything. Not only games but movies, other types of entertainment, food… I think everybody that offers a product or service to people is having to find new ones.

GC: That’s very true. Well, thanks very much for your time, I know we’ve overrun here.

AC: Oh not at all, that was interesting.

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