Fall of the Video King
Japan's game publishers used to be on top of the world. Now they're losing out to U.S. and European rivals. What happened?
By N'Gai Croal
NewsweekOct. 18 issue - Nintendo's press conferences at the Los Angeles Electronic Entertainment Expo have always been more raucous than those of its competitors. But recently the company seems to be trying a bit too hard. Earlier this year, for instance, Reginald Fils-Aime, the new executive vice president for North America, stood before journalists and declared, "My name is Reggie and I'm about kicking ass." Then he showed footage from souped-up new versions of classic Nintendo heroes, like the gold-armor-clad heroine of Metroid Prime: Echoes and the daring fur ball Fox McCloud from Star Fox 2. The wildest applause of all was reserved for a trailer for the company's new Legend of Zelda game, which reduced some of the seemingly grown men in attendance to tears at the sight of their hero, Link, all grown up and rendered in stunningly believable 3-D. Was Nintendo trying to recapture the glory days, back in 1998, when it owned a quarter of the U.S. market and sold five of the top 10 videogame-console games?
What's clear is that those glory days are gonenot only for Nintendo, but for all Japanese game publishers. The North American videogame marketthe world's largesthas been taking off in recent years, but Japanese publishers aren't reaping the rewardstheir share of the U.S. market has plunged to 29 percent in 2004, from 49 percent in 1998, according to John Taylor of Arcadia Investment Corp. While the market share of the Japanese game makers tumbled, Western publishers took up the slack. The U.S. firm Electronic Arts now has nine of the top 20 best-selling games, and other American and European firms like Activision and Take-Two grabbed another six. The Christmas season, usually boom time for game makers, looks bleak for Japanese firms. Meanwhile the Japanese firms can no longer rely on their home market to quickly recoup their investments in new games: console-software sales have shrunk from $3.4 billion in 1998 to $2.2 billion last year, a 35 percent drop. "We need the U.S. in order to be profitable," says Namco vice president Yoichi Haraguchi.
How did Japanese game publishers, who dominated the video- game industry in the 1990s, lose their edge so quickly? Some trends have conspired to put them at a disadvantage. Better visual realism, for instance, has made cultural specificity of paramount importanceMario, Nintendo's four-foot plumber that starred in many of the company's most popular games, doesn't have the universal appeal he once had. But the Japanese firms have also failed to stay relevant to Western consumers, either through their own design prowess or by courting partnerships. "There are three things that make a hit in the current market," says Simon Cox, editor in chief of the magazine Xbox Nation. "It's either culturally relevant, superrealistic or tied to a strong license. Japan currently scores zero on all three of those with their games."
[SNIP]
Rest of article here: http://msnbc.msn.com/id/6199779/site/newsweek/
Japan's game publishers used to be on top of the world. Now they're losing out to U.S. and European rivals. What happened?
By N'Gai Croal
NewsweekOct. 18 issue - Nintendo's press conferences at the Los Angeles Electronic Entertainment Expo have always been more raucous than those of its competitors. But recently the company seems to be trying a bit too hard. Earlier this year, for instance, Reginald Fils-Aime, the new executive vice president for North America, stood before journalists and declared, "My name is Reggie and I'm about kicking ass." Then he showed footage from souped-up new versions of classic Nintendo heroes, like the gold-armor-clad heroine of Metroid Prime: Echoes and the daring fur ball Fox McCloud from Star Fox 2. The wildest applause of all was reserved for a trailer for the company's new Legend of Zelda game, which reduced some of the seemingly grown men in attendance to tears at the sight of their hero, Link, all grown up and rendered in stunningly believable 3-D. Was Nintendo trying to recapture the glory days, back in 1998, when it owned a quarter of the U.S. market and sold five of the top 10 videogame-console games?
What's clear is that those glory days are gonenot only for Nintendo, but for all Japanese game publishers. The North American videogame marketthe world's largesthas been taking off in recent years, but Japanese publishers aren't reaping the rewardstheir share of the U.S. market has plunged to 29 percent in 2004, from 49 percent in 1998, according to John Taylor of Arcadia Investment Corp. While the market share of the Japanese game makers tumbled, Western publishers took up the slack. The U.S. firm Electronic Arts now has nine of the top 20 best-selling games, and other American and European firms like Activision and Take-Two grabbed another six. The Christmas season, usually boom time for game makers, looks bleak for Japanese firms. Meanwhile the Japanese firms can no longer rely on their home market to quickly recoup their investments in new games: console-software sales have shrunk from $3.4 billion in 1998 to $2.2 billion last year, a 35 percent drop. "We need the U.S. in order to be profitable," says Namco vice president Yoichi Haraguchi.
How did Japanese game publishers, who dominated the video- game industry in the 1990s, lose their edge so quickly? Some trends have conspired to put them at a disadvantage. Better visual realism, for instance, has made cultural specificity of paramount importanceMario, Nintendo's four-foot plumber that starred in many of the company's most popular games, doesn't have the universal appeal he once had. But the Japanese firms have also failed to stay relevant to Western consumers, either through their own design prowess or by courting partnerships. "There are three things that make a hit in the current market," says Simon Cox, editor in chief of the magazine Xbox Nation. "It's either culturally relevant, superrealistic or tied to a strong license. Japan currently scores zero on all three of those with their games."
[SNIP]
Rest of article here: http://msnbc.msn.com/id/6199779/site/newsweek/
Many, many games other than Madden/NBA/NCAA/Paralympics20XX are more deserving of those sales.
