Decline of Japanese Gaming Companies

[Sentacotus]

Its not news that Japanese gaming companies like Sega, Capcom, Konami, and Square Enix are not doing so hot. This decline has been going for a couple of years now but its recently come to a head mostly with news of Sega's financial woes and Konami's questionable if not outright criminal business practices. This is due to a number of reasons but they usually center around producing poor products one after the other (ala Sonic Boom), firing their creative minds (Konami), bad DLC practices which dissuade the market (Capcom), and a general shift from producing AAA titles to ports on mobile platforms and Pachinko Machines (Konami and Square Enix). If the recent news is proof of anything this shift in business practice has been detrimental to their companies.

For starters Capcom has been on the verge of bankruptcy for the past couple of years and its speculated that they will be bought out eventually despite their strong anti-takeover policy.

http://www.nintendolife.com/news/2014/06/capcom_could_be_up_for_sale_after_shareholders_reject_anti_takeover_plan

While Sega's CEO has gone on record at admitting their poor products and "betraying" their fanbase their profits are down by 40-50% which is pretty bad for any business regardless and bar Atlus they have no future releases outside of Japan.

https://www.youtube.com/watch?v=ZsGlmNM8OhA

Konami has had nothing but bad press as of late with the controversial firing of Kojima and the harsh business practices and shift to Pachinko and mobile games. Needless to say it doesn't seem to be helping given that they voluntarily delisted themselves from the NYC stock exchange as a "cost saving measure"

http://www.polygon.com/2015/4/27/8503893/konami-delists-itself-from-new-york-stock-exchange

My question is as many good IPs and products these companies produced in the past, what the hell happened? Its as if they abandoned a working strategy and catalog of good products in favor of jumping on the mobile bandwagon and have made one terrible decision after the last. I get that the mobile market is huge in Japan but so far it doesn't seem to be paying off at all for these companies and if anything it has had the opposite effect and is driving them to bankruptcy and irrelevance. Sure you could port a game like Final Fantasy over to mobile but what average mom or joe is going to care about it let alone pay $15 for it?

I'm not the only one seeing this am I? Anyone else have thoughts or information regarding the Japanese market? Is there something I'm missing or uniformed on?

Edited August 7, 2015 by LordTaco42

[Tryhard]

Nintendo

I honestly don't know. Is this really substantial compared to the number of western developing companies that have been shut down or declined over the years?

Konami and Capcom at least seem to be their own worst enemies and have shot themselves in the foot at every turn honestly, so that doesn't surprise me.

[Junk]

Isn't the console market declining in Japan anyway? I've heard mobile gaming is huge there so it might explain konami's shift to mobile same with square enix.

EDIT:oh didn't read the whole post sorry lol

Edited August 7, 2015 by DO NOT POST BAH POSTS GUY

[Sentacotus]

Nintendo

I honestly don't know. Is this really substantial compared to the number of western developing companies that have been shut down or declined over the years?

Konami and Capcom at least seem to be their own worst enemies and have shot themselves in the foot at every turn honestly, so that doesn't surprise me.

To be fair Nintendo has at least began to turn a profit again and seems to be in a stable position despite some of their poor decisions and they've at least managed to produce quality games across their platforms. You could almost make a seperate topic about them entirely dealing with the same issue. I actually did a while ago here but its long dead.

Well considering that they are all big name studios one of which produced consoles and first party titles for over a decade I'd say so yes. Sure Western developers have shut down over the years because of bad sales and such but it seems like (as you observed) these companies are going right down the tubes of their own accord. So I guess thats what my question is. What the hell is going on over there thats so different?

[Tryhard]

When I said Nintendo I was mostly joking, they've made bad decisions but they aren't in any danger. Not yet, anyway.

And I suppose so. I couldn't really say many top quality companies that have fallen one after the other in the west. I would say it was probably because of bad public relations and not listening to their fans - I think Japanese companies really underestimate the values of good public relations and marketing in general.

[Sentacotus]

It would seem that way especially with Konami and Sega. And like you said yes there are some Western devs that have gone down under but they declined and went out of business at different times whereas all the gaming company woes in Japan seem to have hit around the same time for all the big name devs.

[Hyperthrough]

I'm not a business guy, but I think it's related to the expansion to the other countries, thus to maxmise profit, it's best to appeal to the other countries.

Unfortunately, localising can cost a lot, therefore, some companies think it's not worth localising into other countries. This is why Sonic is like the only thing Sega only publishes nowadays.

I can think that Tecmo and Namco Bandai are doing fine as Japanese companies aside from Nintendo.

[Mrs Chrom]

I'm not sure Nintendo and Squenix should be on that list should they?

I thought they were both in the black last year?

Edited August 10, 2015 by Mrs Chrom

[sirmola]

I'm not sure Nintendo and Squenix should be on that list should they?

I thought they were both in the black last year?

You could argue that they are both using the unsustainable strategy of milking their classic IP dry, but they are not doing nearly as badly as the other companies mentioned, who are often messing up even that (whens the last time you saw a new mega-man?)

Edited August 11, 2015 by sirmola

[Refa]

Square is not making significantly more Final Fantasy/Kingdom Hearts games then they were making 5-10 years ago. No clue what you're talking about there.

Heck, you could same the same for Nintendo, but replace Final Fantasy/Kingdom Hearts with Mario/Zelda.

[Jedi]

Square is not making significantly more Final Fantasy/Kingdom Hearts games then they were making 5-10 years ago. No clue what you're talking about there.

Heck, you could same the same for Nintendo, but replace Final Fantasy/Kingdom Hearts with Mario/Zelda.

That and Nintendo has Fire Emblem making more then it ever has, and Animal Crossing and Pokemon and.. I could name so many more things. Heck new IPs like Splatoon and Xenoblade are getting people invested in Nintendo again too.

Sega has Atlus now at least, but I do question why they went away from the winning formula that Unleashed started, Colors worked on and Generations perfected in terms of Sonic. Need some new Streets of Rage, a classic Shining Force, some more Sakura Wars, a New Space Channel 5.. ANYTHING. Too though

Edited August 11, 2015 by Jedi

[Refa]

Well I mean, Nintendo is also sitting on just as many IPs as Sega (although at least they're making an effort to revive some of them). But yeah, their problem is more WRT console manufacturing and not having another source of revenue like Sony and Microsoft (so they can't afford to produce at a loss). Oh, and third party relations, I suppose.

It'd be pretty cool if Sega made new Shining games.

[Jedi]

Well I mean, Nintendo is also sitting on just as many IPs as Sega (although at least they're making an effort to revive some of them). But yeah, their problem is more WRT console manufacturing and not having another source of revenue like Sony and Microsoft (so they can't afford to produce at a loss). Oh, and third party relations, I suppose.

It'd be pretty cool if Sega made new Shining games.

Yeah, I'm just glad we are seeing Kid Icarus and Star Fox again tbh, also yeah, thats been one of Nintendo's main issues since the 64. Although they've had some good titles come out of 3rd parties (Hi Ogre Battle 64 and a number of others I could name). Oddly Atlus has usually stuck with Nintendo for its mainline SMT games while Persona is more Sony lol.

I could name so many Sega and Nintendo franchises they are both sitting on, at least Sega is acknowledging some in Project X Zone and PXZ2, and we ARE getting a new Shenmue even though that won't technically be Sega, it is SOMETHING.

[omglmaowtf]

So basically this topic is describing SNK Playmore since years ago?

[Mrs Chrom]

You could argue that they are both using the unsustainable strategy of milking their classic IP dry, but they are not doing nearly as badly as the other companies mentioned, who are often messing up even that (whens the last time you saw a new mega-man?)

Unsustainable? Mario Kart 8 is like one of the most successful games relative to the install base in the history of the industry! More than 1/2 the people who have a Wii U own that game. Can you think of any other examples of that level of popularity for games that weren't launch titles?

Edited August 14, 2015 by Mrs Chrom