The Japanese game industry is in crisis, as recounted in a New York Times article Monday by Hiroko Tabuchi. She sat down with Keiji Inafune, head of global research and development and global head of production at Capcom, at the Tokyo Games Show 2010 for a very frank and direct look at the problems facing the industry.
One of the most respected names in Japanese gaming, Mr. Inafune, 45, worked on the graphic design for the Street Fighter and Mega Man series before producing the action-adventure game, Onimusha, and the horror title, Dead Rising. In recent years, Mr. Inafune has become a vocal advocate for changes in Japan’s gaming industry, and has urged Japanese developers to think more globally.
Q.: You’re known to be very critical of Japan’s gaming industry, and spoke very pessimistically about Japan at last year’s T.G.S. Have you seen any progress since then?
A.: I look around T.G.S., and everyone’s making awful games. Japan is at least five years behind.
It’s like we’re still making games for the last generation of game consoles.
Capcom is barely keeping up. The ideas, game play, design – there’s no diversity, no originality.
Q.: Why do you think Japan is so behind?
A.: A lot of designers, if they find a genre that works for them, they stick with it. A lot of designers just stick to a set formula.
That doesn’t work any more. You can’t just tweak the graphics, work just on image quality. You can’t compete on that.
The business side is not keeping up with investment. You need to be prepared to invest 4 billion yen or more on a game, and then spend 2 billion yen more to promote it. But Japanese companies can’t do that.
So we’re losing out to the West in terms of investment in games.
It’s a vicious cycle, a deflationary spiral. Because you don’t invest, you can’t sell games, and because you don’t sell games, you can’t invest.
Q.: You’ve tried to tailor your games more to the West. But sometimes that’s been a challenge, like Shadow of Rome. Can you talk more about that?
A.: Shadow of Rome was a failure. We westernized the game in a very superficial way. We simply thought, “If we do this, they’re going to like it.” But I realized we were being very superficial: to us it was turning eyes blue and changing the hair color.
But we needed to go deeper than that. We need to study the West more seriously. So I’ve started going overseas much more often. I want to find ideas that are global.
I don’t think that Japanese games can’t ever be popular overseas again. But they won’t be popular any more in their pure state. It’s like sushi. Everyone loves sushi in the West, but you can’t just serve sushi over there like it is in Japan.
I sometimes go to L.A. and think, “What’s wrong with this restaurant’s sushi?” But what sells over there is different.
Q.: What did you do right with Resident Evil? That sold well overseas.
On the other hand, Monster Hunter’s sold well in Japan, but not overseas.
A.: We were more successful with Biohazard/Resident Evil. We made the lead character American and he speaks English.
On the other hand, there’s a risk that if we make a game that’s neither here no there, the game will be a flop both overseas and in Japan.
Monster Hunter is a Japanese game to the core, down to the controls.
If we changed anything, it wouldn’t sell in Japan any more.
Q.: So going forward, will you make separate games for Japanese and overseas markets?
A.: We basically want to make games that will sell globally, but some games might sell only in Japan. That’s O.K. – as long as we make a profit on it.
But Japan only has an 8 percent of the global gaming market. (Note: Excluding Nintendo.) So it’s getting increasingly hard to make a profit on a game just for the Japanese market.
Q.: Will there be more collaboration with, or acquisitions of, overseas developers?
A.: Buying overseas companies is just a start. It’s like marriage. Capcom bought Blue Castle. We said, “Let’s get married.” But marriage is a long process. You can’t just buy someone and say, “O.K., now we can make good games.”
Lost Planet 1 was designed for the Western market. But the guys who made Lost Planet 2 were misguided. They made it too Japanese. They made it like Monster Hunter.
Q.: What other strategies do you have to crack Western markets?
A.: You can’t take on America, head on. It’s like playing basketball with Americans. A 1.8-meter Japanese guy can’t take on a 2-meter-tall-plus American guy head on. There has to be a different strategy.
My strategy was to bring robots into the game, and create a unique, harsh environment. But Lost Planet 2 lost its way.
Q.: Can you do what you want to do at Capcom?
A.: I’d like to think so, but it’s becoming more difficult. I’m strong-arming a lot of things through, but I’m not sure how much more I can do. I don’t share the same management vision as the company.
I want to make games that travel overseas, but Capcom hasn’t taken globalization seriously. I want to study how Westerners live, and make games that appeal to them.
Q.: What else needs to change at Capcom?
A.: Capcom also needs to reform its compensation setup. Our incentives are inadequate. Also, the way our company works, it’s hard to tell who’s in charge. That’s a problem.
I’ve been fighting for many years now to change these things one by one. But the business side is resisting change. They think developers are stupid and don’t understand business. That’s why I can’t be on the board of directors.
That’s the difference between Capcom and Nintendo. At Nintendo, 80 percent of the board is from development. At Capcom, it’s zero. All the business side cares about is protecting their own interests.
I feel that if Capcom changes, Japan’s gaming industry will change.
Capcom is not truly a global company. It’s barely keeping up. It’s being complacent. We have to change the way we do business.
Q.: Do you see any other Japanese developers doing good work?
A.: Level 5 is forward-looking. In the future, they’re going to top us.
Q.: How else should Japan’s gaming industry globalize?
A.: It’s actually too late to start entering the U.S. market now. That will take years. The next big market is China. My sights are on Asia.
We need to learn from Korea. We need to go to China.
Japan is isolated in the gaming world. If something doesn’t change, we’re doomed.
Q.: Do you get a lot of grief for being so critical of the Japanese market?
A.: I think Japanese gaming is dead. When I say these things, I’m called a traitor. But I love Japan. I want to save it.
The Japanese are always so ambiguous. They don’t like to say negative things. They don’t say things as they are. But if we don’t face up to reality, things will only get worse.
If people start facing up more, something might change. People would start trying to change.
I’m always so shocked when I see global sales rankings. I think: Wow, Capcom’s ranked so low. However you approach it, we’re dead. Resident Evil sold 5 million copies. That’s still no good.
(Mr. Inafune then compares himself to Ryoma Sakamoto, a 19th-century samurai who tried to overthrow Japan’s feudal government and open the country up to the West.)
We’re both treated like lunatics. Ryoma was crushed by vested interests and assassinated. If he hadn’t, he might have gone overseas to see the world.
Q.: Do you feel there are people after you?
A.: If I lived in medieval Japan, I’d probably be killed too.