TGS 2003: the decay of japanese console gaming


While my previous writeup of the 2003 Tokyo Game show was a general overview, I wanted to take a closer look at some interesting and disturbing trends that were lurking behind every booth (And distracting booth babe). It's easy to say, as I did, that the TGS-as- yardstick showed the Japanese game industry in a serious doldrums, with very little innovation on display. Anyone can form an opinion, but many people are going to form different opinions. I wanted to use some stats here to show in a little more detail what kind of state the industry appears to be in here. Unless stated I'm not comparing it to 'the industry' in any other region, and I'm not suggesting anything here beyond what I say. Please try not to infer anything extra by my words, I'm using some facts to try and shed light on what is, to many people, an unknown world. I have no agenda, I own no stocks, I've nothing to gain or lose from this. Now then:

The industry has an aversion to risk.

This is true, from what I hear, everywhere else. Production costs are huge, failures are plenty, and no one wants to back a 'maybe' when they can invest in a 'probably'. The TGS itself is now a yearly event, instead of a bi-annual fling. It's easy for them to say more games have been shown this year than any other when it's concentrated two events into one. One show is less likely to fail than two, 'cause when the chips are down decisions have to be made. Now there are no decisions.

The industry is polarizing.

Like everything else the information age and the internet make it very easy to spread the word, be it good or bad. Trends appear overnight, movies fail based on the first showing instead of the first weekend, and the popular console becomes more popular. According to TGS' official stats, Sony alone displayed almost a third of the games on show, at 28%. Mobile phones and the PC accounted for over 25% of the remainder, leaving three platforms commanding 55% of the total number of games shown this year. That leaves only 45% for 'everyone else' and this seems to increasingly be true. Each of the big three mentioned is firmly in command of their demographic. Sony owns the console industry, and all three of these are, for now, operating at the top of their game without competing with each other. The message seems clear: if you want to compete with the big guys, you'll never win. The GameBoy Advance had less than half the number of games on show that mobile phones did, and we all know the Macintosh sells basically zero software compared to the Wintel juggernaut.

Mobile phones are huge.

According to Namco, they make more profit from their cellular phone content division than any other division, including the arcade, consoles and redemption (think UFO catchers) divisions. It's easy to see why, most of the games (but not all) are ports, and depending on the carrier there's little to no cost of entry, no media to produce, billing is easy, and the content cannot (so far) be copied. A game can be produced on the cheap by a single skilled programmer in a matter of weeks, instead of the years it now takes large teams to complete a console game. There's a huge backlog of games to convert, and people are proving very happy to pay for it. Namco says ringtones make more money than games, and it would appear this is a common thread: ringtones are big money. In many cases you get what you pay for with hardware as capable as this. And the prices are reasonable: Namco has several premium titles at three hundred Yen per download as well as subscription services for both games and ringtones. For the same price (Which works out to about $2.70 at today's exchange) every month you can download as many games or ringtones as you like. This is a boon for anyone wanting to try something without a huge commitment, or for people like me without removable media and space for a mere ten games on the phone. Laugh if you must, but most modern cellular phones in Japan have full- color screens, Java capability, 160x120 resolution, 16-40 voices and can easily handle many different game styles and very complex and rich-sounding melodies. Many people deride the concept of game- playing phones, but while unwilling to give exact numbers, Namco alone claims subscribers in the 'several hundreds of thousands' range at almost three bucks a pop. Every month. If you're laughing, Namco's laughing louder.

If you're not Sony your console is doomed.

Microsoft had a sad, sad showing this year, with about half the number of games on show as the previous three years (2.8% of the total). What they did have looked awesome, but they proved once again they can't attract the Japanese players with their x-treme imagery and ridiculous in-your-face videos. Dead or Alive is the only reason anyone here pays attention to Microsoft, who had not a single top-fifty release, and shifted only 570 consoles for the week ending September 14th. Nintendo didn't even show up but games for the GameCube and the GameBoy Advance accounted for 6.5% and 6.3% respectively. Sega of course has no hardware to sell thanks to the Playstation 2 machine.

Online gaming is going to be huge.

This one is easy. Even if you don't like online gaming, you're in the minority. The money is good, and broadband uptake is finally gaining momentum even in resistant countries like the USA and Britain, bringing more customers into the target zone. Development costs vary wildly, but the rewards can be phenomenal. Even a small number of dedicated subscribers can mean a significant recurring income for a developer with compelling content. It's not easy to create the stuff, but when you do the money is way bigger than anything else. The biggest, Everquest, brings Sony nearly five million dollars a month. Everyone wants a piece of this pie, and asian developers are bursting at the seams to provide ways to spend your monthly money, with a fanciful, beautiful RPG in every corner of the show. They will never reach the number of subscribers Everquest did, but even a fraction of that number can pay for more development and another shot at the big time. Most online games never reach 50,000 subscribers, but even at that mark you can expect $500,000 coming in every month. That's a lot.

The third-person 3D adventure games.

If one genre can be thought of as being responsible for a serious amount of customer disinterest it would have to be the 3D adventure game. Every game company presented a game that, at first glance, looked like the same game every other company had. RPGs, action-fighting, action- shooting, running, jumping, boring. It's the 16-bit platform glut all over again, and there's almost no differentiating content. There's nothing special here that you can unearth without spending many hours with each one. Most suck, a few are ok, but even the truly great ones are visually the same as the rest. This is a sad, sad state of affairs. Most rely on another hook to draw in the player. Konami's version used the theme from their very popular Castlevania franchise. Taito's version had J-pop sensation Gackt as the main character. Sega is using their Shinobi franchise as a springboard. Many online RPGs are switching to this format instead of the traditional top-down or isometric view, and they're looking very similar indeed.

Where is it going from here?

Square and Enix merged. Konami owns Genki + Hudson. Sega consolidated their divisions recently. The world is getting smaller, and you can see it everywhere. A handful of giant companies and a scattering of independents. It was ever thus, and it's unlikely to change. The cost of entry, the cost of marketing, the cost of defeat - only the big boys can play. Perhaps this explains some of the success of the mobile phone sector: cheaper, faster, easier. Small companies like G-Mode and Success can produce hundreds of cellular phone games and still spend a fraction the cost of a console title. And there's more buyers. Way more people have mobile phones in Japan than own Playstation 2 consoles. Consoles like the GP32 and to some extent the GBA provide an outlet for cheaper and newer games, but for the big consoles and big PC releases it's going to be a 3D platformer and RPG world for the foreseeable future. And this isn't good.

Lawrence Wright - nfg games


[Lawrence's take]

[Scott's take]

[TGS/industry opinion]