Games fatigue at Tokyo show

For an industry that is all about entertainment, there was not much happiness at the recent Tokyo Game Show, the Japanese video game industry’s annual jamboree.

The number of exhibitors was down and the number of attendees at the four-day show also fell by 5 per cent to 185,030.

The numbers were matched by a self-critical mood among Japan’s developers, who complained not that the recession had hit business but that there was a lack of innovation or surprise. “You could see everything worth seeing in an hour,” said one.

Perhaps the most extreme statement of the malaise was made by Keiji Inafune of Capcom, one of Japan’s most famous games producers, who said: “Personally when I looked around [at] all the different games at the TGS floor, I said ‘Man! Japan is over. We’re done. Our game industry is finished’,” before claiming that his own zombie game Dead Rising 2 was the exception.

While video games are still growing as a form of entertainment in spite of slow sales in the first half of this year, the remarks reflect a steady decline in Japan’s share of the global games software market.

Part of the Japanese industry’s problem is a divergence in tastes. Consumers in the US and Europe buy few of the epic role-playing titles Japanese gamers enjoy, while Japanese gamers shun western shooting, music and action-adventure games.

The film Spiderman 3 had its world premiere in Tokyo, so popular is the franchise in Japan, but games based on the series have only sold a few tens of thousands of copies in the country.

Yoichi Wada, president of Square Enix, which makes the Final Fantasy and Dragon Quest series, said that Japanese companies need to look abroad. “Until the early 2000s, Japan’s game software market share was very high, so there was complacency. In the last few years, some companies have been learning a lot from the US and Europe and they will survive, but those that stay isolated will struggle,” he said.

Mr Inafune’s boss at Capcom, company president Haruhiro Tsujimoto, rejects any suggestion that lower sales abroad are due to lower quality in Japan. “Look at Nintendo. Its games are made in Japan and yet they succeed abroad. If it’s a good game then it will sell,” he said.

But, like Mr Wada, he thinks Japanese companies must pay more attention to foreign tastes. “The question is whether the whole company is thinking about the need for a game to sell in Europe and the US,” Mr Tsujimoto said, adding Capcom has such an outlook.

Another reason for the flat mood at TGS was the lack of any big hardware announcements, which Microsoft, Sony and Nintendo increasingly save for US and European shows such as E3 and Gamescon. They do so because Japan’s domestic market has stagnated – a further problem for games developers.

Kenji Matsubara, president of games publisher Koei Tecmo, said: “The Japanese market is not growing compared to Europe or North America.”

Some in the industry describe this as “game fatigue”, but it also reflects a shift in Japan away from playing games at home.

“Maybe 10 years ago everyone played games in front of the TV, but now it is changing to mobile phones or the PSP or the DS [handheld consoles],” said Naoya Tsurumi, head of consumer business at Sega.

That trend is partly due to the ageing of Japan’s population, but also to the relatively long hours that Japanese people spend out of the house, working or commuting, and the limited space in Japanese houses.

In the past, Japan’s game software industry has thrived because the quirks of its home market have forced it to innovate in ways that produced world-beating products. It may be, therefore, that in order to excite foreign gamers again, Japan’s developers must first find a way to inspire their own public.