Japan Cool-ing Off?

Interesting article in yesterday's Nikkei Shimbun, Japan's equivalent of the Wall Street Journal. Entitled "Kuuru Jyapan no Yuuutsu" ("The Melancholy of Cool Japan"), it paints a bleak portrait of the domestic video game industry, noting that the top two video game companies worldwide (EA and Activision-Blizzard) are now foreign. Even more to the point is the domestic market's sluggish growth in spite of a near doubling of the size of the market abroad. 

Once Japanese-made games ruled arcades and television screens. What happened?

One reason: the ever-declining birthrate and resulting lack of children. But another factor is more intriguing: the thirtysomethings that currently represent the core audience for games in Japan are increasingly wrapped up in their work and child-rearing duties, resulting in a drop-off of interest in games. In other words, Japan's man-children are finally growing up, and there are fewer and fewer young'uns left to take over their places.

Still, all isn't bleak. While the article cautions that the foreign popularity of first-person shooters (which Japanese makers have never particularly excelled at creating) has significantly eroded the prospects of Japanese companies abroad, it suggests that Japan-made games haven't totally lost their "cool cachet," citing the success of Metal Gear Solid 4 (the English localized version of which -- as of September -- had outsold the domestic release by 2.5 times, for a total of 4 million units sold worldwide) and the foreign-friendly offerings of companies like Square-Enix and Tecmo as rays of sunshine during this stormy period.

So there you have it. When Japanese creators put their minds to it, they can create content that is capable of competing anywhere on this planet. But it's much easier and far less risky to create an unambitious sequel or spin-off that appeals to a tiny but loyal core of die-hard local fans, or even worse, a "dating sim" that's guaranteed to sell ten or twenty thousand copies to love-starved moé aficionados, than it is to put your head into creating something that an average specimen of humanity might want to play. (See also: the entire anime industry of late.)

Comments

[Dractyl]

The fact that Japan has significantly worse pay and working conditions than the West may also have something to do with it. Seriously, who wants to work for a Japanese style company for 1/2 the pay of the West.

It's hard to get good talent out here, especially when trying to make games that appeal to foreign markets. A talent vacuum is a pretty hard issue to work around if you want to be competitive. Especially if you're not willing to spend your way out.

That is significant, but is only one of several systemic issues stifling Japan's game business. They are right to be down about it. At the same time, I wish they would show the leadership to fix it (keeping fingers crossed about the brilliant, but poorly named, Platinum Games).

As for Nintendo, they are too heavily invested in Shigeru Miyamoto. Take him away and there number of creative visionaries pretty much reaches 0.

I'm not sure the newspaper can point out the first point in an article like this one just yet. I am not sure Japan is ready for a public discourse that looks that deep into it's problems.

Note: This is more or less aimed at any serious development house or publisher. If their local market is going down, they need to be looking to other markets. Gaming is a growth industry in most of the world, so the idea that Japan's shrinking population is all to blame is ridiculous. If you make Japanese dating sims, then it's a real problem. If you're Square, it shouldn't be.

That is especially true since Japanese culture has huge social capital in the West right now.

In the end, the Japanese games industry is being killed by the same forces that are killing the rest of the country. 10 years ago, the West's industry was small, so Japan looked big. Now the West has grown and Japan has not. Now Japan looks small. Sound familiar?

[mattalt]

From my position on the sidelines in localization, it's often really obvious at a glance which developers get it and which don't. In some cases it's obvious a developer is just going through the motions to show the higher ups that they're giving the "globalization thing" a shot; in others, the title might have stood a chance if they'd considered the localization process anything more than a last-minute secretarial task; and very, very rarely, someone decides to actually (gasp!) involve foreign people in the development (rather than just the localization) process and thus make something that appeals to an average specimen of humanity rather than an otaku. Those are by far the most rewarding games to be involved in.

[bunkymag]

Interesting article, but:

"One reason: the ever-declining birthrate and resulting lack of children."
Bullshit. It is clearly a world market, and has been for decades. Plus there is no shortage of Japanese adult gamers / people who wanna make them here. A ride on the morning subway is enough to show the market potential.

I don't think i agree with the second reason either.. not without proof that conditions are getting worse / interest in games is dropping, or a link to the original article..

[hillsy]

Well, a link to the article would be useless to those of us who aren't fluent in Japanese, and I'm guessing for those who are, it wouldn't be that hard to track down the online Nikkei Shimbun article.

[Matt Alt]

Believe it or don't, as Mad magazine would say, but I read the article in the 8/20 edition of the paper. I just did a search and couldn't find anything but summaries online (welcome to the wonderful world of Japanese journalism). The title is クールジャパンの憂鬱 if you want to give it a whack yourself.

[dreamhunk]

japan are all console game devs that is why. Pc gaming is cutting edge gaming. Now that some pc game devs are going multi plat japan can't compete.

pc gaming is the cradle of innovation.

http://www.youtube.com/watch?v=xY-NSNhgydY

http://www.youtube.com/watch?v=gyQTCeobZlg

http://www.youtube.com/watch?v=uBPegjNG2qw

japan is so far behide it's not funny! If japan had pc gamers and pc gaming market they would have maybe still in it.

here is the real truth japan was never a head, pc gaming is light years a head of any console or console games!

[dreamhunk]

You know blizzard is a pc only company right all of their games are on the pc.

wow is a pc only game.

check out the kind of tech pc gaming has
here is graphics of the future
http://technology.timesonline.co.uk/tol/news/tech_and_web/article4557935.ece

check this out I can play games with my mind
http://www.youtube.com/watch?v=BKd_AJUUT7Q

you think mgs4 is the shooter out there you are wrong!
http://pc.ign.com/articles/909/909584p1.html

take a good look at pc hardware over consoles

[M-Bone]

I think that the Nikkei just saying EA and Activision-Blizzard are the top game companies so Japan is "on the ropes" is missing the point. Both EA and Act-Bliz are the product of messes of mergers and have been gobbling up studios left and right for ages now. They are a result of amalgamation. If Square-Enix, Nintendo, and Capcom merged.... you get the picture.

This also misses the fact that Act-Bliz is huge, to a large degree, because of World of Warcraft - which does not compete with what Japanese companies do.

Finally, EA may be huge, but they have had A LOT of financial trouble lately -

http://www.joystiq.com/2007/11/02/analyst-ea-financial-troubles-are-only-beginning/