Q&A: D3 - Not Just A Simple Company?

Japanese-headquartered D3 Publisher has been operating in the U.S. for just over a year now, publishing titles such as Flushed Away, Naruto: Clash Of Ninja and Hi Hi Puffy AmiYumi, so we thought it was an opportune time to catch up with them and see how things have progressed. In Japan, D3 is best known for its multitude budget titles in the Simple 2000 (and other related) series, but has recently turned to higher-budget titles. In fact, D3 in the U.S. wants to be known primarily for high production values from the get-go, as we learned in our interview with them last year. At a recent event put on by the company, we interviewed VP of marketing Alison Quirion, about D3’s current and future plans, why they allow developers such as Digital Extremes to keep their IP, and why the budget market isn’t taking off in the U.S. I interviewed you a year ago - A year later how are things going at D3, and what has changed since then? Alison Quirion: Things are going well. We are certainly still in that ramp-up phase. But we’ve launched a few titles. Some have done really well and some have done so-so. But I think we’ve grown faster than a lot of companies from day one. The fact that we have established ourselves from a sales and distribution standpoint and a public relations standpoint, those have been huge successes for us. What has changed is we are still looking for a broad range of titles, from opportunistic little pick ups to developing our own IP. We are starting to get a little more selective about what we can bring over just from a retail standpoint. With this many platforms it gets harder and harder to get shelf space for your product, if it's a real niche title. Even though we like those titles, we have to be a little pickier about which ones we go with. I think that’s the big change. I feel like as a publisher that’s still ramping up, the output is still a little scattered and not so focused. You know what to expect with a Capcom published title, for instance, even if it’s not developed by them. Do you feel like you are starting to hone in on something? AQ: No, not yet. I think because it takes so long to develop IP that we’re still at that point where we’re putting things into the process. They haven't shipped yet, so we don't know if these are long term franchises or if they are going to just do okay and we move on. It will probably be another couple of years before we can really say we are the company that does this, that, and that. It’s just due to the length of the development process – that’s the hardest part for me, in that... So much waiting? AQ: So much waiting. Established companies can jump onto next-gen because they have franchises already. We had to go out and find stuff, and it is just taking a little bit longer. I imagine that a lot is riding on Dark Sector. AQ: Yes, a lot is riding on Dark Sector. That is a big one for us. For us to establish ourselves as a company that can publish our own IP - well, it’s actually Digital Extremes’ IP - but something that is original: that’s going to be huge for us. Otherwise we’ll be the company that works with Tomy on Naruto, and that’s it. So you allowed Digital Extremes to retain the Dark Sector IP? AQ: Yes, that’s another part of our strategy as well, because we are new, so we knew we had to do some very aggressive sort of deals. We want to be a good partner so we had to lure those high rent developers. That’s definitely part of it. Last year, Yoji Takenaka wanted D3 to be a top-ten publisher within five years. Do you feel like you are still on course? AQ: I think we are doing pretty well. We look at it not just from a North American standpoint but also from a worldwide standpoint. I think certainly from a worldwide standpoint we can get there, and I think we’ll be pretty close from a North American standpoint. Do you feel like there is a enough recognition of the D3 publisher brand in japan that you have to change that image at all for the United States? Obviously it’s known as a budget publisher in Japan. AQ: It really only affects us from a public relations standpoint, and not even so much anymore. I think Tamara [Sanderson] has done a really great job in really presenting the company from a U.S. standpoint, in terms of saying “this is what we’re focused on.” I think slowly but surely people are getting over that stigma. From a retail standpoint they don't care. They don't know anything about it. Why hasn't D3 been able to bring out Simple 2000-type games in the United States. Why have we not seen that? (Simple 2000 is D3 Publisher Japan’s budget imprint, with over 110 titles, some of which have been very successful.) AQ: I think some of it has to do with what I mentioned before we started this interview, which was shelf space. There is only so much shelf space at retail, and retailers are more likely to pass on titles. So the question becomes how many units is the minimum to make this worth our while - to hit our contribution margin that we’re looking for. It’s just getting harder and harder. The other part of the equation is Sony approvals. There have been a few titles that we have put forth, that we thought “Okay, these are good, these are fun titles, there is a place for them.” And Sony will say “no, we don't think its competitive, or you’re going to need make this change, and this change, and this change,” at which point it doesn't make sense from a business standpoint. These are either titles that were finished, where you can't go back to the developer... there are a lot of reasons. But in Europe we’re actually releasing quite a few of them. Through (Italy-based budget publisher) 505 Game Street? AQ: No, through a brand we started called Essential Games through D3 Publisher. We have an office in the United Kingdom. So there they’ve actually created a whole brand for the Simple series. I know that 505 was a D3 partner in the past, and they did Daibijin (Demolition Girl), and a lot of the bigger Simple 2000 games at the time. I guess that partnership has ended? AQ: Yeah, so now we have a proper D3 Publisher European operation, so they are kind of taking the lead on that one. Interesting. I don't know if you can say, but how many titles have been rejected for approval? AQ: I don't know if I even know. I'm not sure, it’s maybe just a handful, because we go through them first and we try to weed out the ones that we think we know, like all right - we know what Sony expects - and we just kind of remove the ones from the process that we don't think Sony will approve. Do you think that it might be possible from the downloadable side, like PS3 downloadables? AQ: Maybe, maybe, and that's something we're certainly going to look at. I think there are a lot of new methods of distribution which would make a lot of sense. The trick then is, how old are the titles and can we get, and is the code or the developer available to make whatever changes are necessary to get it ready for English release. I talked with you a long time ago about the possibility of internal developers. Are you still looking at that at all? AQ: Yeah, it comes up every so often. We haven't really, you know, bitten the bullet on that one. I think at some point Brian Christian would really like to have at least one internal team. We're not quite ready for it yet. Sure. So, Earth Defense Force X is coming to the U.S. as Earth Defense Force 2017, right? AQ: Yes. Do you know what the price point is for that? AQ: No, I don't think we've settled on it. They're not going out at $59, but I'm not sure if we're going to go $49 or $39. [NOTE: Since this interview, GameStop is now listing Earth Defense Force at $39.99 with a March ship date, though under its old name of Earth Defense Force X.] I know it's full price in Japan, and apparently there is no real online multi-player component. AQ: Right. That seems odd to me. I know it's maybe not Sandlot’s area of expertise, but... AQ: Right. Well, yeah, I don't know why that decision was made in Japan. You know, it could be a question of development budget, or expertise, or whether or not that's functionality that the Japanese market even wants. I think the installed base factors into a lot of the gameplay decisions that they make in those titles. So, you know. Unfortunately it just didn't happen on this one. And Oneechanbara Vortex – you’re hoping to bring it out? AQ: We are hoping to bring it out. Nothing is set for that yet? AQ: No, no. Okay. Out of curiosity, do you think you would be able to leverage the Tamsoft branding for that, since Tamsoft is the Toshinden creator? AQ: Possibly, I mean, I think some people like you would certainly pick up on that. Gamasutra did a subtle sideways interview with Takashi Sue (a producer at D3 Japan). It was at TGS, and we didn't write about it anywhere. But he was telling me that D3 Japan pretty much won't be able to continue the "Simple" series on next-gen consoles. Do you know anything about that? AQ: No, I don't, that's very interesting, though. He was just saying budget-wise, and timing-wise it just wasn't possible, but of course, the 360 is not doing so well over there. AQ: Right, my guess is that I would imagine they might take a break until development costs get kind of settled down, and then they can kind of take the same strategy that they've taken on previous systems. But right now it's just so out of control in terms of development costs that probably, you know, return on investment is not working yet. But I would think there's so much equity there that they'd find a way to bring it back at some point. I haven't noticed a lot of Wii support yet. Are you planning that? AQ: Yeah, we are planning it. Nothing that we can really talk about yet, but certainly we're looking at it. Who would you say is your best developer for D3 in Japan? AQ: Oh, I don't know. Yeah, that is a good question. All right. AQ: Whoever did Zombie V.S. Ambulance. That's Vingt-Et-Un... AQ: Oh! (laughs) We also like a game called Darwin. With the little cave men. Darwin? Oh wait, is that the U.S. title? AQ: Oh, I don't know. Maybe that's just a poor translation from Japanese. Cave Man? Does that mean you're bringing it out here? AQ: (laughs) We look at all of them. We're not bringing Zombie V.S. Ambulance out, and I brought that one up.