Rising Sun Rising: The Reinvigoration of Japanese Developers

If you're a big fan of video games, there's a very good likelihood you have played and enjoyed the fruits of Japanese video game developers' innovation. From Super Mario Bros. to Final Fantasy VII to Street Fighter II and back again, many of the highlights of gaming have come from the land of the rising sun.

However, it wouldn't be controversial to say that, for the last console generation, the games that have set the standard worldwide have come from Western developers — both American and European. One of Japanese gaming's most prominent developers, Resident Evil creator Keiji Inafune, even said as much to the New York Times: “I look around Tokyo Games Show, and everyone’s making awful games; Japan is at least five years behind,” he said. The same article estimated that Japanese developers, publishers and manufacturers owned as much as 50 percent of the gaming market in 2002; this has fallen to just 10 percent. While this lull is due to many reasons — including a dearth of creativity and the shifting Japanese market — what was shown last week at the Tokyo Game Show may be indicative of a real revival.

After the United States video game market crashed in 1983, it wasn't American companies like Atari or Activision that led the market revival here in the U.S. — it was Nintendo's NES. We at Silicon Sasquatch grew up on Nintendo’s 8-bit grey box, and by the time the Nintendo 64 launched in September 1996 in the U.S., “Nintendo” was synonymous with video games in the same way Kleenex is with facial tissues and Xerox is with copy machines. Though the generation weaned on Mario, Zelda and company hardly knew it, they were enjoying games made in Japan.

Through the 16- and 32-bit eras, Japanese developers enjoyed a golden period of innovation in game design. Games like Super Mario World, Super Metroid, Chrono Trigger, Metal Gear Solid, Gran Turismo and Final Fantasy VII were all well received worldwide and helped usher in a more mature era of gaming in all regions. According to numbers on the ever-accurate Wikipedia, eight of the top-10 best-selling Super NES games were Japanese developed, and six of the top-10 PlayStation games were as well.

As pointed out by that well-timed New York Times article, Japan is playing catch-up in this current generation. Where characters like Mario, Sonic and Solid Snake once set the tastes internationally, that mantle has passed to Master Chief, Nico Bellic and the soldiers of Modern Warfare. Not just in sales, either, but in terms of importance to how video games have developed; the open-world gameplay of the Grand Theft Auto games is a huge inspiration to game developers around the world, and Halo and Modern Warfare established the gold standard for how online gaming should be handled. Rather than just following the lead of the Nintendos, Sonys and Capcoms of the world, American and European developers have taken the lead as innovators in modern game design.

So what's gone wrong, then? Take a look at sales numbers: Again according to stats from Sony, there have been 38.1 million PlayStation 3 consoles sold; more than 5 million have been sold in Japan. Meanwhile, out of the PlayStation 2's approximately 145 million units sold, more than 21 million were sold in Japan. While those figures are similar in their percentages — both over 13 percent of total sales — the sales volumes have some serious discrepancies. Moreover, despite Microsoft's push to gain market share in Japan, only 1.2 million Xbox 360s have been sold in Japan — roughly 3 percent of global sales. The one sales success of this era has been the Wii, which surpassed 10 million consoles sold in Japan in March; however, that achievement took almost a year longer to reach than it did for the PlayStation 2. The PS2 took 131 weeks, roughly two and a half years, to reach 10 million in sales; the PS3 has been on shelves for almost four years.

It seems as though the maturation of the Japanese market visible in the 16- and 32-bit eras, which reached an apex with the PlayStation 2 and GameCube, has given way to a cultural change where gamers just aren't interested in home consoles. The Nintendo DS is the best-selling system ever in Japan, having sold more than 25 million units; the DS is, as my travels in Japan this spring proved, absolutely ubiquitous. It seems that where the current console generation is left out, handheld systems have gained, and that includes creativity in game design. As handhelds are the rage, that is where development has gone.

But what of the consoles? Perhaps another reason is the lack of relevance of arcades. Japanese developers like Namco, Konami, Sega and Capcom thrived in arcades, and many of their best games came as home console ports. Though shorter games are seeing a revival on PlayStation Network and Xbox Live Arcade, it's hardly enough to sustain the sorts of development teams that these former arcade giants enlisted, and today's $60, big-budget titles have moved beyond the shallow replayability offered by many of the arcade ports that were successful even on sophisticated platforms like the Sega Dreamcast.

Last week's Tokyo Game Show brought a revelatory thunderbolt: Microsoft's Kinect was going to get support from some very, very big developers who were promising to bring more creativity than just rehashing Wii Sports. The 360-powered Kinect has drawn some particularly big names — seven new titles, five for Kinect alone, all from Japanese development teams. The headline grabber has been the revival of Steel Battalion; the Xbox cult favorite was renowned for its 40-button hyper-realistic joystick, and now it's coming to Kinect. Games also announced included Goichi Suda and Grasshopper Manufacture's Codename D and Project Draco, which appears to be a new Panzer Dragoon-inspired game from ex-Sega developers.

What made the Kinect-centric TGS announcements so much of a shock was the stark contrast they presented to what Western developers showcased at E3 2010 in June. Combining what was shown last week in Tokyo along with Q Entertainment's spiritual successor to Rez, Child of Eden, and it turns out that the vast majority of Kinect games that are aimed at hardcore gamers are coming out of Japan. It was said in the games press (including on the podcasts I listen to: the Giant Bombcast, Weekend Confirmed, Rebel FM, and 1up's In This Thread) that the key phrase of E3 this year is "it's not for you," in that the motion-control games for Kinect and PlayStation Move were not geared toward the hardcore. Sure, Harmonix's Dance Central has a Rock Band-like crossover appeal, but most everything else looked to ape the Wii's successes and appeal to broader audiences while leaving the Halo and GTA crowd out in the rain.

These development announcements aren't surefire signs that Japan will come roaring back immediately. It's been rumored that Microsoft is helping development costs for these games as a loss-leader for Kinect. Business thought would be that Microsoft helps pay for some marquee games so that the hardware sells well, providing a market for developers down the line. More power to the Japanese developers for taking on this challenge, then, especially as these projects look so promising. Moreover, this is what may help revive the Japanese gaming market — perhaps gamers no longer want iterations of what's come before? Perhaps the more experiential gameplay brought by motion controllers will help move PS3s and 360s; the Wii has been successful in Japan, so the market may be there for something different. It's certainly proof that what's come before hasn't worked this generation, and that change is needed.

Inafune-san may be right — Japan may be five years behind American developers. But the Japanese market and Japanese publishers and developers are too important to gaming for them to fade away meekly. I don't know whether motion games will be the death knell or the phoenix rising, but I do know it will be more interesting for all gamers worldwide than if the Japanese developers quietly wound down their streams of games.