(Opinion) The decline of Japanese video game industry

As opening words I honestly hate to write such serious thread in this forums but seeing that nobody ever made similar threads in recent years and I decided to tackle this issue myself. In this thread I'm going to discuss on the decline of Japanese video game industry in recent years. I know the title sounds misleading and too "clickbaity" but I don't know how to write better titles for this thread.

Background

Only two years after The Great Video Game Crash in 1983, a Japanese company Nintendo released Super Mario Bros in their own console, Nintendo Entertainment System(also known as Famicom in Japan) and thus saving a wounded industry. Three years later in 1988 Sega, another Japanese company released their first 16-bit console, Genesis(also known as Megadrive in Europe and Japan), which made video games cool again. Fast forward to 2018 most Japanese companies are struggling and some of them are already dead. For example SNK, a giant in 1980's and 1990's now a shadow of its former self, relegated to manufacturing pachinko machines. They don't even have the rights to develop their former flagship fighting series, King of Fighters and the upcoming Samurai Showdown reboot. In fact most big Japanese companies today can't even compete with small indie studios in Europe and North America in term of programming talents and popularity. How the messiahs of video game industry turned into pariahs less than 30 years? I'm going to find that out.

Go West or Go Mobile

Many of us still thrilled for big budget titles such as Kingdom Hearts 3, Resident Evil 2 Remake, Hideo Kojima's Death Stranding, Shenmue III, Soul Calibur VI and Devil May Cry 5(direct sequel to 2008 Devil May Cry 4 than its 2013 reboot) but all of those are actually aimed towards western markets than its native country Japan. Persona 5, Ni no Kuni 2, Trails of Cold Steel 3 and Dragon Quest XI are the recent games aimed for Japanese markets that aren't mobile ones. As for Persona series, its developer Atlus refuse to talk about its future and as I can tell their next big game is an action-RPG adventure instead of turn-based one, clearly they too aiming for more lucrative western markets than its native Japanese ones.

Let's not ignore the biggest elephant in the hall, mobile/smartphone games. Not really a recent invention but its popularity explodes in recent years as smartphones become more powerful and internet is faster, cheaper and more accessible to all. Each of them come with lucrative(to publishers) gacha systems, designed to be addictive in order to dig player's pockets as much as possible. For example Granblue Fantasy, unless you are an otaku or a smartphone game addict, no one outside Japan ever heard of it but extremely popular there. In fact it even got an anime adaptation, constantly updated in order to keep up with huge player base. They aren't alone as big companies like Atlus, Nintendo and Square-Enix, Bandai-Namco already joined the more lucrative smartphone markets.

Other Contributing Factors

Sometimes there are issues almost never existed in the west but common in Japan such as sexual harassment, wages come to late, overworked and underpaid programmers, programmers committing suicide, etc. It also theorized that Atlus taking too much time developing Persona 5 because of these problems. Not just Atlus but other big companies like Capcom, Konami, Square-Enix, Nintendo and Bandai-Namco as well.

Like any industries, it also suffered with slow economical growth especially in Asian countries after 1998 crisis. Japan was lucky enough as its impact was rather minimal but many other Asian countries, its main markets, don't. This can explain why the decline of SNK's King of Fighter series after 2000.

Closing Words

While Japanese video game industry still alive today but they are not the same in its golden age of 1980's, 1990's and early 2000's. While most Japanese companies can aim the western markets ignoring native Japanese ones if they want to make money but I'm afraid they could lose their Japanese "souls" when doing so. Take a look on Final Fantasy XV for example. In my opinion it looks like a western RPG game in the skin of a Japanese one with abandoning its turn-based system in favor of real-time hack-and-slash one, celebrating (American) car culture, lack of (permanent) playable female characters, vast empty open world and all of this done to cater western gamers alone.

Japanese games died after the PS2 era. They don’t compare to NA or European games that have much higher budgets and more talented people.

There is a variety of reasons why they failed and never recovered.

I'm guessing English is not your native language.

Mario Brothers saved Nintendo and nothing else.

Can't help but agree with a lot what's stated but must admit I play a lot of games on Mobile as portable gaming has always been a comfort of mine.

It's worth nothing that Capcoms best selling game of all time came out this year (Monster Hunter: World) and exceedingly well received in Japan as well. Though that's one case of not losing interest while being on mainline consoles, and high quality product.

Also I would argue over-exaggerating some of these titles. Resident Evil has always been a similar theme and seemingly focused on Western market. Devil May Cry is more judged for its engine choice, the style many love from the characters is still very like earlier titles from what I've seen.

wow, impressive! i had no idea it was so popular

@RSM-HQ said:

@Macutchi said:

wow, impressive! i had no idea it was so popular

your detector's broken, why would that be sarcasm lol? off the top of my head i'd have imagined streetfighter 2, resident evil, devil may cry would've beaten it (or at least one of the titles from the series) in sales, particularly since mwh hasn't been out all that long

@Macutchi: Get the feeling I mention MH: World and how much I play and successful its been a lot, so wouldn't surprise me. My mistake_

off the top of my head i'd have imagined streetfighter 2, resident evil, devil may cry would've beaten it

Capcom noted it themselves. And though I rarely look into it, the best selling of those three is Resident Evil, the fifth entry was over 8 million last I checked. And Resident Evil 6 then 2 being just behind. Monster Hunter: World is over 10mil last time we got official records on the game. Which was soon after the P.C. port.

I wish Devil May Cry sold better. But ultimately 3D Slashers is niche. DMC4 being the best selling but don't recall the numbers. It's why God of War heavily focuses on puzzles and story to cater towards a larger audience.

Street Fighter II has sold well but I don't think they count every version from Super to Turbos, etc. Otherwise I would agree that is likely Capcoms best selling game(s).

ah ok, i know you obviously are a big fan, i just didn't know it had sold that well.

i know we can't take sales as representative of quality, but selling so well in such a short space of time when it's not really a mainstream genre and it's historically not done too well outside of japan as a series is quite an endorsement from the gaming community

@Macutchi: I'd react the exact same way to World even if it didn't do this well, but bringing up being Capcoms best selling game seems relevant to this thread.

And you are right previously not many even knew much on the franchise, at least on GS Forums. Someone even called it a Evolve clone or something, but I also recall that conversation going very ugly. .

I believe someone mentioned in that old thread it was pretty big in Europe as well (would make sense with dragons and knights). Yet I don't recall them providing much to reassure that statement. At anyrate it certainly wasn't big in the US till now, which I assume most on the Forum and website reside in.

I'm glad more are giving Monster Hunter a shot but I don't like to base my enjoyment on popularity. Only use it as a counter argument when people focus on "mainstream" and "relevance" in gaming debates.

I don't know what to say about the OP. I wish that genres are mentioned here, so I can decide whether to fully agree with what it's said. Japanese games belonging to the platformer genre, including sidescrollers, are not as big as they were in the past. (Same may be said about Western-made platformer games, but that's different, right?) While the Mario franchise has been innovative in terms of graphics and gameplay, the Kirby series has been stuck to the traditional sidescroller stuff. I would say that Mario is still popular; unsure about Kirby in the US, but I saw it struggling in the UK charts. I'm also unsure whether Mega Man original game series would attract many gamers besides the fanbase, but I couldn't find it in the UK charts; apparently, the more mature Mega Man X series ended in 2000s. The Sonic series is probably still popular but has met some increasingly backlash lately, especially recent 3D games.

JRPGs are different species. Most of them struggled, especially the SaGa series, which was reduced to Japan-only series since Unlimited Saga and Romancing SaGa PS2 remake didn't sell well and met mixed reviews, the former having more bad reviews due to its awkward and convoluted gameplay. Star Ocean series has been hit with criticisms lately, despite being an action RPG, mainly due to story presentation and complicated gameplay, like Item Creation system. Unsure about Persona, Tales, and some others. Dragon Quest has been a niche series; SE announced to no longer localize the series if DQ11 hasn't sold well. Fire Emblem had been Japan-only series until mid-2000s, but the series didn't go popular globally until Awakening, which is on 3DS handheld. Final Fantasy has met some criticisms from those who enjoyed its turn-based pre-XIII entries and well-written epic stories.

Unsure about Dating sims games as they aren't that popular in the West, right?

Visual novels has been considered a total niche outside Japan mainly due to heavy emphasis on text (and probably lack of voiceovers). The good examples are 3DS games of the Ace Attorney series, two of which have been released digitally; Capcom didn't have guts to localize Dai Gyakuten Saiban or Ace Attorney Investigations 2, the series set in the 19th century. Jake Hunter series has struggled; only a few or several out of multiple entries were localized.

As of now, I'm stuck between agreeing or disagreeing with the OP. Any other genres or games that I missed? Thanks.

This is what frustrates me about Nintendo: while there's been an obvious shift in the industry towards western tastes, they still operate like it's the eighties where Japan is the only place that matters. They limit their business prospects and exposure by refusing to broaden themselves to outside cultures.

@MirkoS77: Couldn’t have said it better myself!

Maybe so, but I still prefer Japanese games to western ones.

@gh87: I deliberately not to mention the genres because the more successful Japanese game genres because they aren't do well in west such as visual novels for example. Not to mention PC market is extremely small there. Can you name one Japanese PC game that isn't a visual novel, a port from popular console game or that isn't made by using RPG maker engine and such? By the way some Japanese indie developers do exists but they usually don't get much attention due to bigger companies saw them as "thieves" or nuisance at best. They do thrive in Steam and other platforms though.

Perhaps one of their biggest mistakes is not to support indie game industry. Not just the government but also regular consumers as well. The government never care about video game industry in first place except when it come to taxing them. Average Japanese consumers are more thrilled to play games made or at least published by big companies. Some small developers can be considered to be lucky if their games got published by those big companies even if they could lose up to 90% of their profits. Today they are luckier as many easy-to-use game engines such as Unity and Unreal as well as online platform like Steam are around.

I also agree with AJStyles that the decline of Japanese video game industry began with the end of PS2 and the beginning of PS3 in 2006. Most companies are too slow to adapt PS3 while still developing games for PS2 when most western companies already abandoned PS2 in favor for PS3. It also entirely their fault as most Japanese people of that time were not yet ready to buy HD TVs. They still stuck with PS2 and Wii until 2010 when PS2 dead there.

While Japanese video game industry is in decline but I do believe their might rise again someday. As long as they stopped cannibalizing smaller companies for profits.

I’ve always been an avid fan of JRPGS.

But, I do believe the stuff being released now compared to say 2000-2006 isn’t’ all that great. (Apart from the newly released Tales of games that I consider checking out.)

I’m really only rooting for certain Nintendo titles these days anyway.

As for Square Enix, I stopped playing Final Fantasy after X came out. (No hate for that game, I love it.) The FF series just doesn’t appeal to me anymore for some reason.