The Japanese Game Industry’s Death Has Been Greatly Exaggerated

The video game industry is always prone to conventional wisdom that isn’t all that smart. Five years from now, EA and Ubisoft will be pretending they never said free-to-play was the future of gaming, for example.

But the latest meme in the industry seems to be that Japan has totally lost its way and can’t develop games Western audiences care about.

The reality is nothing could be further from the truth. The problem isn’t one of cultural differences or a hide-bound industry, although those certainly don’t help.

The problem is twofold but can really be summed up in one word: Marketing.

Making games Westerners like isn’t the problem. Sega recently put out the witty and clever, if linear, Binary Domain and isn’t shy about tapping Western developers: Gearbox’s next game is Aliens: Colonial Marines, out this February. Capcom put out Dragon’s Dogma, arguably the best RPG to come out this year, and Resident Evil 6 has been selling briskly. Namco Bandai hasn’t suddenly found itself unable to move copies of Tekken. Nintendo isn’t going to see its sales of Pokemon suddenly collapse. It’s true the smaller publishers and developers have been suffering in Western markets, but that’s not exactly untrue of Western developers and publishers, either.

Making games Westerners will play in reasonable amounts is not really the problem here. The problem is getting the attention of Western gamers.

First of all, the games that make money in Japan are not the games that make money in the West. Japanese gamers have gone to portable consoles in droves and they buy traditional Japanese RPGs for portable systems. Whenever the Vita sees a sales bump in Japan, it’s because a new JRPG has come out. The same is true of the 3DS.

The problem is huge hits in Japan are cult hits at best, here. The hardcore Western gamer tends towards FPS games played on consoles, not RPGs played on portables. And they just don’t have the marketing support to become huge hits.

Stop and consider, for example, that half of Halo 3′s budget of $60 million was marketing. Western developers treat marketing their games like they’re movie studios: Medal of Honor: Warfighter hired Linkin Park to write them a song, Black Ops II is launching an ad starring Robert Downey Jr. and directed by Guy Ritchie, and Halo 4 has more marketing tie-ins than most movies that came out this summer.

Your average Japanese company just cannot compete with that. Even if they had the money, and many don’t, selling a game like Tokyo Jungle is a very different proposition.

Can Japanese companies come back? It’s possible. Publishers are reaching out, or just flat-out buying, Western developers, such as Square Enix purchasing Eidos. Japanese publishers are experimenting with digital downloads instead of spending on boxed releases, such as the recent Way Of The Samurai 4. Many Japanese publishers big and small are finding success releasing mobile games.

But for now, consider it a lesson: Marketing spends can matter a lot more than quality.