TGS 2008: Is Japan's gaming influence waning?

Executives from Square, Capcom, and Namco Bandai open up about how they feel their country is losing gaming clout--and how they think the Japanese game industry can turn itself around.

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TOKYO--With the gaming world's focus fixed firmly on Japan today with the beginning of the 2008 Tokyo Game Show, you'd expect Japanese companies would be using the opportunity to puff out their collective chests and proudly show off their best titles to the world. But oddly, the event started this morning on a negative note, with some top executives from Japan's biggest publishers bemoaning their country's waning influence on the global gaming stage.

Square Enix president Yoichi Wada kicked things off with TGS's opening keynote address, which he titled, "What the world is looking for in Japanese companies." Wada was frank in his assessment of the state of the local industry, saying that Japan has lost its position as the leader in the video game world, and had not coped well with the rapid rise of gaming markets in the US and Europe.

Wada said Japan's leadership in the previous decades was based on strong networking between hardware manufacturers and content producers, as most of the home consoles were designed and manufactured within Japan's borders. With more recent console generations, new competitors such as Microsoft entered the field, with even Japanese console makers joining up with foreign partners to create more advanced machines. Wada says Japanese companies were slow to embrace this change, and hence were left behind when information and networking infrastructure shifted more to the West.

The solution? Wada says Japanese game companies need to work together better with one another and with external partners (such as universities and government) in order to better share best practices and knowledge. One particular example he pointed to was the success of developer conferences such as US-based Game Developers Conference, adding that Japanese developers weren't very adept at these type of conferences. Wada was downbeat about the industry's chances should it fail to create new hubs--he says time is running out, but that thanks to still-strong local sales, most local developers were financially well positioned to tackle the challenge.

Following Wada's keynote was a roundtable discussion which included Wada, Capcom president and chief operating officer Haruhiro Tsujimoto, and Namco Bandai COO Shin Unozawa. Both Tsujimoto and Unozawa agreed that Japan's standing in the gaming world had indeed diminished, but Unozawa said it was less a matter of Japan faltering than with Western companies becoming better. Capcom's Tsujimoto said that going global was the key, and reiterated his company's previously stated goal of becoming the number one games company in the world.

To close off the roundtable, Wada offered a bleak analogy. He said that he was a heavy smoker, and that he thought nothing short of a doctor telling him he has cancer and only had years to live would make him stop. Wada said perhaps that's what needed to happen before Japanese game companies admit that they need to work together to solve their collective problems.

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