Japan's Resurrection Could Be the Biggest Story of TGS 2014

Opinion: Once knocked as a "finished" industry in Japan, studios across the island are doubling down on next-gen.

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It has been five years since Keiji Inafune--the influential and respected creator of Mega Man--spoke out against the flagging standards of games development in Japan. Asked at the 2009 Tokyo Game Show what he thought of the projects on display, Inafune said, "Personally when I looked around at all the different games at the TGS floor I said 'Japan is over. We're done. Our game industry is finished.'"

As controversial and infectiously repeatable these words have become, what was most disappointing was that Inafune was right. At the time, the games industry was in the midst of a tectonic shift of power from East to West, driven in part by Microsoft's US-built Xbox 360.

Meanwhile, the dramatically escalating costs of console software development made it a necessity that games carried global appeal--in particular in the US and Europe, which are the two biggest markets by far--and under these new demands, Japan's empire of studios struggled to adapt.

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But, judging by the exciting and promising content on display at the Tokyo Game Show 2014, the spiritual home of video games appears to have ascended from its creative stupor.

Granted, the show itself hasn't been especially momentous; it has lacked major announcements and most of the game demos have already been showcased at prior events such as E3 and Gamescom. Attendance figures, meanwhile, were down.

At the same time, core consoles are not selling particularly well in Japan. The PS4, which is the clear frontrunner in other key markets, is hardly a hot product in its homeland. Andrew House, the group chief executive of PlayStation--a man who could talk to you for hours about the PS4's trailblazing success--could only muster the words, "It's doing OK," when asked what he thought about PS4 sales in Japan.

Yet, while Japan's own consumers have not exactly embraced the new generation of home consoles, its development studios have started to prioritize them again. And as showcased so effectively at TGS, Japan's new wave of core games can demonstrably allure western audiences.

What struck home in particular from the TGS floor was the desire to flaunt new IP--a sentiment broadcast by the likes of Bloodborne (From Software), The Evil Within (Tango Gameworks), and Deep Down (Capcom Online Games).

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That's not to suggest Japan's games sector has bet the whole farm on its console blockbusters (the Makuhari Messe show floor was swamped with indies in development for mobiles and handhelds), yet much of Japan's future as a purveyor of core multiplatform games hinges on the commercial and critical response of those aforementioned titles.

And games like Deep Down are a demonstration of Capcom's taste for new business models; it's is a free-to-play action RPG funded via microtransactions. Whatever you think of free-to-play--and certainly there are many examples where it is exploitative and buzzkilling--the underpinning financial model of triple-A games is laced with increasingly severe risk, which is why it's so crucial that the likes of Capcom takes a more progressive stance and experiments with its business plans. It doesn't want to fall behind again.

Inevitably, there are still orthodox blockbusters too, in particular Metal Gear Solid V (Kojima Productions) and Final Fantasy XV (Square Enix)--two properties that have become tokenistic of Japan's craftsmanship in creating franchises of lasting appeal. But the show was also a reminder that some of Japan's most prominent studios have more than one major triple-A project underway, with Bayonetta 2 (Platinum Games) and Silent Hills (Kojima Productions) underlying how much investment is flowing into its core studios again.

It's a big ask, but if enough of these games succeed commercially and critically, Inafune's controversial words would begin to lose their relevance, and I suspect no one would be happier about that outcome than him.

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