Capcom, Square Enix, Namco, and Sony discuss future of gaming

TOKYO--This morning at the 2009 Tokyo Game Show, the big draw was Sony Computer Entertainment CEO Kaz Hirai's keynote address. However, the affable executive wasn't the only heavy hitter on hand.

Immediately after Hirai's presentation, four heavyweights from the gaming world took the stage at the Makuhari Messe for a panel discussion titled "Strategies and Visions of Top Makers in the Global Era." On hand were some of the biggest names in Japanese game publishing: Capcom president and COO Haruhiro Tsujimoto, Konami Digital Entertainment vice president Kazumi Kitaue, Namco Bandai Games president and CEO Shin Unozawa, and Square Enix president and director Yoichi Wada.

The subject of the quartet's discussion wasn't specified by TGS organizers, but the field of discussion was wide open. Likely topics would include the launch of the new PlayStation 3 Slim, declining sales of the Nintendo Wii, and the challenges of multiplatform development. Given the success of Resident Evil 5 on the Xbox 360 and the forthcoming simultaneous Western launch of Final Fantasy XIII on the 360 and PS3, Microsoft's console also looked likely to come up.

[7:27] First question: since this is the second year in a row we've had this panel at TGS, what were the major changes from last year in terms of gaming?

[7:29] Tsujimoto from Capcom says the past year in the Japanese market, user's play styles have changed in a major way. Portable games consoles have become even more popular.

[7:30] Multiple players are now the norm for portable devices, such as Dragon Quest.

[7:31] Kitaue-san from Konami says the economy hasn't really impacted business in the last year, with the games industry still increasing.

[7:31] As for changes, the Wii has introduced new ways of playing, as well as the popularity of the DS and PSP in Japan.

[7:31] Is it going to be a bright year next year? Well, that's another question, Kitaue-san jokes.

[7:32] Wada-san's turn from Square, and he says entertainment wasn't really that affected by the global financial crisis. The impact that was seen was in retailers--retailers have been a lot more picky in what they stock because of uncertainty.

[7:34] When it comes to portable gaming, Wada-san echoes the view that network gaming is making the experience richer.

[7:35] Yoshida-san from Sony's turn. He says home game content may be severely impacted by the iPhone app store. Many small applications started to be distributed, with users able to spend some extra time they may have used on games with iPhone apps.

[7:35] They may not play these small apps for hours, but they do play for several minutes.

[7:35] Yoshida-san also calls out social networks like Facebook where games are being played. These are only simple games, but they are making an impact on gaming.

[7:36] Content that are being created by publishers like us need to look at this, Yoshida-san says.

[7:39] Capcom's Tsujimoto-san jumps in, saying the most important thing--economy aside--is to create compelling games people want to buy and play.

[7:39] Group question: What's your long-term view on the health of the games industry?

[7:41] Kitaue-san from Konami says a lot of evolution has happened in the past 25 years. The same evolution will happen in the future, but we shouldn't be as dependent on hardware alone. We need more content evolution, he says, pointing out the Nintendo DS as a good example.

[7:42] Square's Wada-san says he's not concerned about the short-term prospects of the industry.

[7:45] But he does forecast changes that will be painful to implement in the future.

[7:46] One thing that he says must be better recognised: the games industry is for adults as well, and not just for children. We actually have double the size of the potential market. In the West, they think it's cool to play games as adults. We need to change the perspective that it's only for kids in Japan.

[7:46] Wada says a major question that will need to be answered soon is how digital distribution will impact game makers and gamers.

[7:49] Sony's Yoshida-san's turn to chat about future trends: He says how gamers are charged for gaming will need to be looked at, with gamers possibly having a different value idea of how much they should be paying for their different gaming experiences.

[7:49] Unozawa-san from Namco Bandai is skeptical about full-price games taking off as downloadable only, saying the popular applications on the iPhone are the ones that are selling for one or two dollars.

[7:51] Capcom's Tsujimoto says billing over a network is a challenge. It's something they'll need to talk to platform holders about.

[7:59] Yoshida-san from Sony says the biggest successes so far on download networks like PSN and Live are from smaller production studios and independents.

[7:59] Wada-san from Square says setting price on downloadable content is different from boxed packages. Different models can be created to suit what people will be willing to play for.

[8:02] Tsujimoto-san from Capcom says cell phones allow you to actually show other people the games you like, as opposed to a console stuck in a living room. This was a great way of viral marketing, he says.

[8:05] Square's Wada-san says cell phone gaming penetration is high because billing has been simple. As for it being a good game platform, he says it depends on your culture. In Japan, where people are always on the move with their phones, it has become very successful.

[8:07] Next question: In this global game environment, what are the strengths of a Japanese developer?

[8:08] Unozawa-san from Namco says Japanese developers need to rely on the unique Japanese culture, as opposed to trying to emulate what's popular in the West.

[8:11] Yoshida-san from Sony says they've seen some million-selling games in the US that have sold only 20,000 units in Japan. He says tastes in the US and Japan will continue to diverge.

[8:11] Yoshida-san says Hollywood-style big-blockbuster games are where the strengths of US developers lie--Japanese developers are better at unique and new gameplay experiences, even if they're not as sophisticated as Western games.

[8:14] Square's Wada-san says Japanese developers can still be profitable while only focusing on the Japanese market. He says there is actually no such thing as a unified global market, with plenty of regional variations in taste and preference to account for.

[8:16] Kitaue-san from Konami says when it comes to Japan's strengths as a game nation, the country's better at being creative and introducing new concepts, while the West is more technically proficient.

[8:18] As for genres, Kitaue-san says Japanese developers need to be able to differentiate themselves better from games being developed in the West.

[8:20] Capcom's Tsujimoto-san says Japanese developers can look to physical games that originated in arcades for some inspiration for future games. He cites examples such as Guitar Hero and Rock Band, games that had their roots in the Japanese arcade but that have become global hits.

[8:23] Unozawa-san from Namco Bandai agrees that arcades contain some inspiration. And while Namco does have an arcade division, it doesn't communicate well enough with the company's home game division. He promises to change this for the future.

[8:24] As for other future strategies that game companies should embrace, Tsujimoto-san from Capcom says more attention needs to be paid to how gamers' lifestyles are changing.

[8:27] Wada-san from Square agrees. He adds that game producers need to ask questions such as how a user likes to play, what they play, where they play, and when.

[8:29] Sony's Yoshida-san says the diversity of users' needs and lifestyles also needs to be taken into account. Developers also have to be ready to embrace new platforms and new devices.

[8:31] And with a thank-you to all the panelists, the roundtable session ends to a large round of applause.

[8:31] And that's it! Check back soon for more of GameSpot's coverage of the 2009 Tokyo Game Show.