Japanese publishers cutting games to slash costs

With Japanese game sales falling by 6.9 percent during the December 2008 to December 2009 calendar year, Japanese game publishers are looking to protect against further economic loss by releasing fewer new titles in the next fiscal year.

As reported by Japanese newspaper Nikkei (registration required), Sega, Tecmo Koei, and Konami all plan to trim down their release lineup in both the Japanese and international markets.

Sega plans to launch 56 new titles in fiscal 2010, 10 fewer titles than fiscal 2009. This, coupled with an estimated 1.5 billion yen (US$16.9 million) cut in research and development and content production costs, is expected to lower the publisher's video game sales by 18 percent to 100 billion yen (US$1.1 billion) while lifting its operating profit by 11 percent to 7 billion yen (US$78.8 million).

By comparison, Tecmo Koei Holdings will roll out 11 fewer titles worldwide in fiscal 2010, with the hope of cutting down on outsourcing costs by 12 percent or 3.5 billion yen (US$39.4 million). The publisher made an operating profit of 700 million yen (US$7.9 million) in its game software division during the last fiscal year and has plans to increase this figure to 4.3 billion yen (US$48.4 million) in 2010.

Finally, Nikkei reports that Konami is aiming to cut its new releases by around 10 percent this year to improve quality and prevent failed projects.