Interview: Marvelous And AQI's Big Bid For Western Expansion

Marvelous Interactive is in a period of flux. The Japanese publisher of Harvest Moon, No More Heroes, Half-Minute Hero and Little King's Story last year had to reduce profit estimates and cut executive pay, and is currently merging with the developer AQI (Lost Odyssey, Nier). But the picture is a bit more convoluted than that. Marvelous has lost many of its best creators, with Harvest Moon creator Yasuhiro Wada, and Yoshiro Kimura (Little King's Story) now at Grasshopper Manufacture. Within the last year, all the heads of AQI's internal developers, including Sonic the Hedgehog designer Naoto Ohshima, left the company, as did most of the Cavia team (Nier, Drag-On Dragoon/Drakengard). Marvelous plans to use the remaining 300 developers at AQI under its reported 200-strong existing production staff to rebuild a global brand. "I think people know us more for our titles than they really know us for our name," Daniel Kurtz, Marvelous business development coordinator told us. "That's mainly because we do international publishing through partners like such as Ubisoft, Konami and others." The company wants to put forth a global image, and build the brand so that people know Marvelous games as Marvelous games, much like Grasshopper Manufacture has managed to do. "We want to be able to be accessible which also means going forward titles that we want to be making [games that will] be immediately appreciated by a wider range audience in the West," Kurtz added. The company felt that it had to shrink before it could grow, but its hand was also forced. "In the last year or two years the worldwide markets have been somewhat shrinking," added Toshinori Aoki, Marvelous' managing director of digital contents. "We had to reconsider our options based on multiple business plans and titles that we were working on at the time, which unfortunately led us to need to cut off some things as well as partner companies and connections that we had, which brings us to today." "So basically what we've done in response to the shrinking market, along with restructuring partnerships and strategies, our titles we've really shrunk down as well. That's not to say that we're getting away from developing titles, but putting a lot more effort into each individual title that we're working on. We actually compared this year's sales numbers to last years and previous year's, and each title's sales, per title, have risen dramatically." Marvelous has never before had a full internal development studio. It always used external studios, managed by internal producers, much like Enix and Bandai did before their respective mergers (and to a large extent continue to do). The company will continue that tactic with certain developers, but going forward will be merging its production and development teams so that Marvelous' producers will guide the AQI team internally. AQI has developed games across all existing platforms, and prior to this merger, merged its own studios together into one giant knowledge sharing company. Aoki clarifies, "Basically, combine Marvelous' production style as well as taste and strength in putting forth very strong images for specific titles, and combine that with AQI's developer ability and the ability to take on a whole lot of capacity for multiple lines. Marvelous wins because we're going to be being able to develop for more wide tastes and AQI wins because they're going to be able to have that real production direction behind it in the publisher back there." The question in my mind, of course, is how are you going to create this stellar meeting of production and development, when so many of your stars have left the company? And how do you increase confidence in those who remain, knowing the leads have gotten fed up? Aoki continues, "You know even with Capcom, you already heard of major producers and creators who left. Inafune-san is one of the biggest, and Kamiya is another, and yet they're still making very strong titles. There's talent that was in Capcom at the lower levels during the time of Inafune and Kamiya and everybody else who have really risen up in that environment and developed their skills as well as bringing in new talent that could come in with different views." "That's the approach that we're taking. A lot of our talent at both AQI and Marvelous was there at the time of Wada, Kimura, and others, and then new producers that are coming in. We are now going to become with this merger about a five hundred person strong company. So it's not just up talent from the old and bringing new talent, it's also that sort of, I hate this word, synergy, within the companies and trying to find new ways in which to combine our working styles that we think is going to bring new creativity to the process." The company hopes to create an idyllic relationship between developer and publisher, since AQI will act as an internally-owned studio. But AQI already had publishing chops, bringing out a number of titles into the distribution chain in Japan. "AQI is going to have a lot of say and control on the publishing process, Marvelous is going to have a say and control in the development process," Aoki promised. "Marvelous so far, while we have been a publisher, our production team is really one that comes up with the new concepts as well as drives the vision for a lot of these games that we're working with. Definitely Grasshopper, Vanillaware, they bring their own tastes and they also bring their own projects to the table. So it really is going to be a mixing of responsibilities from here on out." And for Marvelous, success means Western expansion. The market for retail games Japan has been drying up -- not just for Marvelous but for the company's partners, as well. To that end, "we want to focus on those platforms which are, and what we feel will be in the future very successful in the global markets," Aoki says. "So while we're not going to lose or get rid of that style of Marvelous type game like Little King's Story, we also realize that more than, now more than ever we need to be successful in the West, specifically North America. So we want to start developing titles that actually focus and target for that North American gaming audience." In fact, the company just announced a new title in the Little King's Story series for PlayStation Vita, without its original creative director at the helm. Kurtz continues: "The most important thing that we feel in order to succeed in the west is to rely on partner feedback. Their feet are on the ground, they know what gamers want much better than we do over in Japan so this is going to be something that's very important." My next thought is, how would this very traditional Japanese company succeed where others have failed? This structure has been tried before, and only sort of worked. Square projects and Enix projects are essentially separate. Namco and Bandai have de-integrated their projects, to where they're only serving together under a holding company, not sharing resources. This sort of structure has proved very difficult for Japanese management structures to support. "There are certainly a lot of publishers and developers in Japan who have tried to go for that global strategy and failed, that's something that nobody can deny," Aoki says. "Look at the numbers and you'll see it." "But take for example No More Heroes, where it's something that didn't actually succeed in Japan. Did it make [its budget] back? Sure, but it didn't have nearly as much of a market as it did in North America and Europe. Something that is a very strong title, not just with the core gamers, but a lot of people who you normally wouldn't expect to be Japanese game fans really took to it because that's the style of Grasshopper and specifically Suda-san." "They understand what strikes a chord not just with the Western gamer, but a Westerner. So going forward, not just with studios like Grasshopper but other studios both in America and Europe, North America and Europe and in Japan who have proven track records in the West, those are the people we're going to be working with from here on out, and we're going to be relying on their taste and their vision and their drive in order to succeed where others have unfortunately failed." Is Marvelous the company to make this happen, using nearly the exact same structure that has been tried and failed by other Japanese organizations? I have been surprised before, so maybe this will be one of those times. If Marvelous can pull this off, it will be a major player in the global industry in name as well as in licensing, but if it can't, we might be seeing another round of executive cuts. The backer of both Marvelous and AQI is the aged-but-powerful Hayao Nakayama, who also funded Sega, and is one of the patron saints of Japanese games. Anecdotally, it seems that he is the one behind this merger. His word is essentially gospel in the industry. So let's see what he can do.