Interview: Roll D3 For Enchantment: D3 Publisher of America's New Quest

Los Angeles-based D3 Publisher of America is the U.S. offshoot of Japanese publisher D3. Though the companies share the same funding, their aims are quite different. In Japan, D3 is known primarily for its value titles, with over 80 games for the PlayStation 2 alone, under their “Simple 2000” mark (2000 stands for the number of yen paid for it – an equivalent of under $20). The company does release some full budget titles as well, but in that territory, is primarily known for its pick up and play lower-priced games, with quirky titles such as The Giant Woman, in which you play as a colossal girl in a bikini who wrecks Tokyo, or The Miniskirt Police, which basically explains itself.

In the U.S., however, D3 will be working on bigger budget releases, using both licensed and original IP. Gamasutra spoke with executive VP and CEO Yoji Takenaka, VP of product development Brian Christian, and VP of marketing Alison Quirion about the possibility of a U.S. budget market, the benefits of ramping up at the beginning of a new console generation, establishing new brand identity, and the D3 Publisher Of America's plans for the future.

Gamasutra: Give us some background on D3 as a company.

Yoji Takenaka: We have a parent company in Japan: D3 Publisher Inc. And we're a subsidiary of that. D3 itself is owned by Fields Corporation, which is in the pachinko business, much like Sammy. It's a very affluent company, and we're utilizing their assets to run D3 Publisher in America.

Gamasutra: And what prompted the move to the U.S.?

YT: First of all, D3 Publisher of Japan only has the Japanese market. And the Japanese market is shrinking for games – we know this for sure, you can see the data. The company was looking for any way to grow the business, and probably the best way was to make the company global.

Gamasutra: D3's focus in Japan has largely been budget titles, right?

YT: Yeah, probably 90 percent. However, the ratio is getting lower now, because D3 Publisher Inc is releasing more full price titles now.

Brian Christian: So while the focus in Japan has been low budget, that's not going to be the focus of D3 Publisher of America. Our focus is going to be AAA titles, and we're going to supplement our catalog with licensed stuff, as well as developing our own IP.

Gamasutra: Will D3 be bringing any of the Japanese company's budget titles to the U.S.? There does seem to be something of a market for them, within the import gaming community.

YT: We don't have any plans for that now, because we realize that the U.S. is much more quality conscious. And I don't think our titles in Japan can compete with other titles at the $14.99 and $19.99 level in the U.S. We have a markdown system in the American marketplace, so AAA titles from three years ago are now $19.99. So we don't think we can compete in that market, but will be licensing properties for kids games, and also working on original titles for the mainstream market.

Our focus is the mass market, not the niche market. We could maybe move five or six thousand units of those budget titles if we released them, but that's not our focus. We really want to bring out games that are proper for the U.S. market at large.

Alison Quirion: You're not the first person to say that either. So there may be something where after a certain point, we try to put together a compilation of those titles for the U.S. niche market, but we're also concerned [over whether] someone like SCEA would actually approve them.

Gamasutra: So do you think it would be difficult to bring that sort of title over?

AQ: My opinion is that after a certain point Sony will be focused on PlayStation 3, so I think they'll be less concerned with what comes out on PS2, especially if you're focused on that budget pricepoint. But it'll be our challenge to make something that's of value to the consumer, that Sony will also agree is of value, as opposed to releasing each title individually, which I don't think they would approve.

YT: We'll think about it once we establish ourselves more here, but first we want to establish our brand image. One of my jobs here is to evaluate what we have, and maybe see if we want to develop that IP further.

Gamasutra: Does D3 have a relationship with Taito in Japan?

YT: Taito has been our distributor in Japan for the Japanese market, yes. But we're totally different companies. In Japan, bigger publishers will distribute other publishers' products. Only certain big publishers have nationwide distribution systems right now. Sony, Capcom, Konami, Taito, and I think EA started to try that last year, and lost a lot of money. But other publishers can choose different distributors to get the best deal possible.

Gamasutra: So D3 will be publishing titles in the U.S. – will there also be development funding?

YT: We have two main interests, as I said – one is licenses, and the other is original titles. We've actually already started development in both areas. We're depending on independent developers for that.

BC: We have done a tour of the nation, and talked to every AAA developer, asking them about their IP, what they would like to do, and what their passion is. We've gone through literally hundreds of concepts and ideas, and we've picked what we think are the best concepts with the best developers. And we're moving forward, helping them bring their own IP to the marketplace.

Gamasutra: I know that in Japan, D3 tends to work a lot with developers that largely only develop games for D3. Will the U.S. branch operate under a similar model?

BC: We're going to find the right developer, with the right technology, for the right genre, so we won't be locked into any one or two developers. We're talking to everyone in the development community. We have good relationships with pretty much everyone now, so we can pretty much pick and choose.

Gamasutra: Will you be starting with a small number of titles and ramping up, or will you be making more of a big splash?

YT: I think that any publisher that wants to be successful has to be very careful, because I see a lot of dangerous things happening in the industry right now. We're going to be taking cautious steps, but that doesn't mean that we're stalling. We'd like to grow our company – not fast – but at a good speed.

BC: We're basing everything we do on quality. Whether it be licenses or original IP, our goal is to make the best games possible for the demographic and genre that we're trying to hit. So we're not going to overwork our resources.

Gamasutra: Is that how you plan to build D3 as a brand? It seems as though outside of the niche market, D3 doesn't really have much visibility.

YT: You know that's to our advantage, because D3P's name is basically unknown nationwide. So we will pretty much be judged on our first products, so that's why we're being careful with our brand image.

Gamasutra: And your first titles will be kids' games?

YT: Yeah. Well the reason for that is that the development cycles for GBA, PC or maybe DS – those platforms are shorter to develop for. That's why. We're going to bring out a lot of other types of titles on a lot of other platforms as well.

Gamasutra: Do you have next-gen planned for already?

YT: I think the next generation is going to be an opportunity for us, because we're small right now, but we're very well funded. So we can challenge the next generation platforms very well, and would like to bring out one PlayStation 3 or Xbox 360 title right away, and Brian is working very hard on that now, fleshing out those concepts.

Gamasutra: Are you still looking for IP then, or are you set for the time being?

BC: We're always looking for IP. It's a never-ending search, like being in a desert looking for a water hole! We'll continue to look for IP, even after we've launched successful titles, because we think that's where the future is, as well as establishing licenses for all genres.

Gamasutra: So what do you think is a good balance between licensed titles and original IP?

YT: I'd like to say 50/50. That way we'll have a good flow of products on the licensed side, and then can challenge the Xbox 360 and PS3 titles in the future.

BC: At the beginning people may think that we're doing just licensed titles, because the development cycle for original IP is so much longer. And you have to be a lot more careful with what you're doing because obviously you're creating a universe and a story, where with licenses it's already created for you. So it will appear that we're doing a lot of licensed titles, but ultimately, by the time we get to the end of '06 and into '07, people will realize that we're doing our own IP.

Gamasutra: Are you largely going with American developers or are you also looking internationally?

BC: We're going to find the right developers no matter where they are, to do the product we have in mind.

YT: And I have to say that our company in America is Western-focused. So we want to find the right developer for the Western market, first.

Gamasutra: Would you ever consider releasing D3 Publisher of U.S. titles in Japan?

YT: I think we will, and probably they will be full-price, premium titles in Japan . At least I hope so!

AQ: We currently have plans, like one of our first titles – Hi Hi Puffy AmiYumi for GBA – will be released by D3 Publisher in Japan.

Gamasutra: Were you able to staff up significantly, due to the Fields Corporation funding?

YT: The company is growing every day right now, because we're preparing for the release of our first titles, and we have SKU plans for the next fiscal year already. But we're still just at fifteen people, but we're going to be double that size very soon.

Gamasutra: Going back to the comment about IP – does that also mean there are D3-originating concepts that you're trying to find the right people for?

BC: Right now we've solicited the developers to see what their passion and their IP is. We've also looked at some very cult-oriented licenses that interest us, and we have some internal ideas, but because of how quickly things are moving, and the fact that there's only 24 hours in a day, it's been really difficult to take our own ideas and develop them. But we're going to try to do that as well.

Gamasutra: Do you see D3 taking on any internal development studios in the future?

BC: My background was with Interplay, and we did internal development, so it's really a love of mine. It's something I'd like to bring to this company as well, but that's in the future. If we ever did that, we're probably think about it in mid 2007, but I think it's something that Yoji and I both dream about.

Gamasutra: What did you do at Interplay?

BC: I was a director, and an executive producer there. The last thing I did for them was Fallout Tactics.

Gamasutra: And Yoji, what is your background?

YT: I've been in the industry for more than 14 years. I started out with the Turbo Grafx-16 and Duo, the big black box. That was my product, 14 years ago. Then I moved to JVC, doing Star Wars with LucasFilm in the JVC Japan studios, and then went to Intermetrics Studio, a huge technology company, which did well, so we signed up with SquareSoft, then as a Nintendo first-party, and our parent company liked that, and then merged with Looking Glass Studios, and after that I went to THQ. I was doing product development and contract negotiations for them – the franchise I worked on was was WWE - Smackdown 2 No Mercy, and Royal Rumble. Then I switched to business development.

Gamasutra: Where do you see D3 of U.S. in five years time?

YT: In five years we'd like to be in the top ten U.S. publishers.

Gamasutra: What kind of message do you want to send to developers right now? What do you want them to know about you?

BC:

I think the message is we want to make quality titles, and we know that it takes money and time. We're more than willing to give them more than enough of both. With the right idea, the right enthusiasm, the right technology, and all of that – if it's a wonderful package, we understand what it takes to make a new IP, our company knows exactly how to deliver that to retail, from a marketing standpoint and also from sales, so I think the message is that we're looking for great partners. We're looking to be a partner rather than an adversary.