An analysis of the global decline of Japanese console development Part 1

How did the word "westernization" end up in veteran gamer vocabulary and how did that word so quickly attain the negative connotations with which it is associated today?

The word is associated with visions of awkward imitation gameplay and twisted caricatures of popular western conventions such as they are reflected in eastern eyes that skim only the shallow surface western trends in gaming. The current incarnation of the concept was conceived a mere half a decade ago, bespoken then with a sense of potent urgency by many Japanese studios as the way forward, the only way for continued survival.

It was a novel enough idea with very simple beginnings, game development on current console hardware had become so prohibitively expensive that the numbers no longer added up. A Japanese produced game developed on current generation hardware could not possibly hope to turn a profit on domestic sales alone. In fact the domestic console market had shrunk drastically over the last decade and Japanese consumers were not embracing current generation hardware with the same ravenous appetite that they had previous generations.

Suddenly overseas success was not just a matter of a nice bonus because it had suddenly become paramount to profitability. This scared many Japanese managers, as it would likely scare any western studio faced suddenly with the prospect of having to make all of their profit via sales in a market as foreign and contrary to their own as is Japan to the west.

It might seem silly that Japanese developers would become nervous at the prospect of having to do something that they've already been doing successfully for several decades. After all Japanese games had enjoyed widespread popularity and acceptance right up until a few years ago, so really, nothing seemingly needed to change. Alas as it is with this business, it is never the creative talent who is in charge of the sweeping tides of corporate management.

Atsushi Inaba of Platinum games recently lamented the fact that developers are continually lumped into Eastern and Western subsets by people for in his opinion the distinction should only be made at the level of good and bad developers. Alas it is another kind of distinction that has caused most Japanese developers to in the last five years catapult themselves from the former to the latter. This being the distinction between western and eastern markets and the need to cater to the tastes of one over the other.

It was the many interpretations of what that word ‘westernization’ meant and how it was to be executed that resulted in Japanese game development earning itself a very bad rep and come be seen as passé whereas just half a decade ago it was viewed in an overwhelmingly positive light.

The three factors:

Once condensed one can clearly identify three core contributing factors in the westernization movement that are chiefly responsible for the declining global presence of Japan in the industry.

First factor is borne from the issue of spiralling cost and complexity of developing on current generation hardware. For decades Japanese developers have approached game design much in the same free flowing manner that was employed at the dawn of the industry. The experimental, art house and unstructured way in which a small team of sometimes just one person went about creating a game in the 80’s was never discarded for the planned and structured process that the west embraced long ago.

It is important to note that much of Japan’s greatest output over the last three decades is a direct result of this inspiration driven process. The process does however not scale very well and given the logistical challenges and budgets at stake few Japanese studios had enough faith in their teams to put them to the challenge of trying. Instead as a move borne of pure business logic many studios decided that the cost efficiency and chartable predictability of overseas game developers and their development process seemed the more prudent horse to back.

As a result the Japanese tradition for making games whose development process is very much artistically and inspirationally motivated was abandoned in favour of outsourcing that process to overseas developers for better cost efficiency. The soul of Japanese game design has always resided in its cavalier attitude, traditionally not being much afraid of taking time to experiment and let inspiration be the main motivating force driving forward development. This process, for an example, was ultimately what led to Resident Evil 4 becoming such a landmark title, both critically and financially.

Resident Evil 4 was a game that underwent a very lengthy development cycle because its director, Shinji Mikami, had the fortitude to throw away several versions of that game in mid development because he felt the concept was not good enough.

Nintendo is company known for widespread embrace of this method, and by virtue of their gall to successfully extending the previous generation for themselves they have managed to maintain this approach. Fumito Ueda and his team are among one of the few console developers in Japan allowed to continue using this method with which they created such unforgettable titles such as ICO and Shadow of Colossus.

Unfortunately today factors such as cost efficiency, a clear cut production schedule and shallow interpretations of western market trends constitute the primary motivations for Japanese managers as they decide which projects to green light and how to allocate development resources.

From a managerial point of view it is of course understandable that prudent business logic dictates them green lighting projects based on wither or not their design document reads like that of an already existing and proven multi million seller rather than trust a producer with a very vague concept in mind who would like spend the next two to three years to try and feel something unique out of it by aid of a large team as was done in the past.

But there is a point where cold business logic has to be taken up for revision based on what that attitude has resulted in so far and how it is likely to affect the future. It is therefore no wonder that in face of a dogged adherence to such proven flawed logic Capcom has seen so much disgruntled talent leaving its ranks, and it is important to understand that this move has come with no benefit to either party.

The talent that Capcom has lost over the last 5 years constitutes exactly the sort of people with proven track records that managers could be faulted to trust with the huge allocation of resources which development on current generation hardware necessitates. Those talented producers/directors are only ever at their best when given the creative freedom and financial backing required to see their vision through. The result of Capcom not trusting their talent at the cost of seeing them leave means that both parties are left poorer as a result. Capcom managers are forced to be even more conservative as they now have fewer people internally which they can be faulted to put faith in, and the rogue talent once outside of the security of their corporate patrons often find themselves fading into obscurity while their talent goes to waste.

The second factor that has had its toll is outsourcing of development. Diverting resources from internal star producers who could put it to good use doing what they do best, creating new properties, in favour of funnelling it into cost effective overseas teams who have a predictable and measurable output. The problem with this approach is that game development is not like a manufacturing process, it is a creative process. Over the years there have been countless examples of what is borne of Japanese development houses attempting to maximize efficiency by attempting to use practices from product manufacturing.

Half of the reason why Japan has fallen behind in the console business is due to so much resources being allocated to overseas productions in service of making re-makes and sequels of existing Japanese properties when instead they could have been invested into internal teams making new properties to pave a healthy way into the future.

The third factor at play is to be found in the prevalence of an ultra conservative attitude present in the high up managerial decision makers in Japanese development houses. One of the many insights into the corporate structure of Japan that came out of a very lengthy and candid interview with Capcom producer Keiji Inafune at the time of his disgruntled departure was to confirm an industry a stereotype. The fact that managers do not posses a fundamental understanding of their own product, but they do have an understanding of market trends.

Five years ago the console market was not as sparsely segmented as it is today, so it was perhaps easier to be granted the blessing for a risky concept. Much lease could be granted developers in service of them birthing the next golden property. This did not always work out, but it did spawn many interesting unique titles and on average it did work out enough to make it worth it in the end.

In contrast today the multi million selling properties are few and mostly lumped into a handful of genres, making them much clearer targets. Thus the focus has shifted to trying to aim for those targets and as a result many Japanese titles developed internally now resemble poor imitations of popular western properties.

In the next part a more in depth look will be taken at the majour Japanese developers Capcom, Konami, Square-Enix, Namco-Bandai, SEGA and Platinum Games in order to identify how each has strategically chosen to tackle the challenges of current generation console development and how their decisions have affected Japan's global presence, as well as what conclusions can be drawn from it all.