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An analysis of the global decline of Japanese console development Part 2

In the span of five years the Japanese developers went from being number one to being regarded as irrelevant. Why did this happen and what can be done. In part 2 the westernization strategies of Capcom and Konami is dissected.

The first part of this series addressed the rapid decline in terms of global presence as well as importance that has affected the Japanse game industry. There it was proposed that the root cause of this decline was three factors which all stem from financial concerns among Japanese console developers, and the collectively reached conclusion which it birthed. The conclusion of having to embrace westernization in one form or the other and how each of the Japanese giants then chose to interpret the best way to achieve that exact thing.

In this part a cross section of these various westernization efforts undertaken by big Japanese developers over the last 5 years will be given in order to identify why neither approached helped each party to become stronger, but instead undermined their presence in the overseas market.

However, despite an overwhelming number of setbacks Japanese developers have yet to show any signs of preparing to abandon their current approach. Titles like the recent Quantum Theory, and the near future Yakuza of the End and the further off Binary Domain and Devil May Cry franchise reboot stand as proof of the westernization strategies of the last few years yet exist unchanged and unchallenged today.

Examples of the different approaches to westernization attempted and how they each have failed to do what they set out to accomplish has grown very crowded over the years. The one which has been most prevalent and has produced the poorest results is where a Japanese studio outsources to an overseas studio a good trusted franchise of theirs that may or may not have started to stagnate lately in order to revitalize and westernize said property either by way of a sequel or a franchise reboot.

This new policy of overseas outsourcing has superseded the previously held approach to franchise stagnation which was traditionally handled by doing the reboot internally, or more often, giving the stagnating franchise to an internal B-team inside the company umbrella to exploit while the star A-team and producer that originally created said property is given a clean slate to work with in order to create the next big thing for the studio. The star producer and his team is traditionally given this opportunity free of any creative restraint because they have a known history for delivering hits and can be trusted to continue to do so.

This approach did not always managed to produce hits, but enough many attempts were made that on average is was a sum positive endeavour for the studios making use of it. In decades past this was the strategy employed by the likes of Konami and Capcom and this approach, combined with a wealth of talented producer/directors was chiefly responsible for their previous global dominance. Incidentally they also both abandoned this strategy in favour of each their own interpretation of westernization at the onset of this generation and neither has demonstrated the validity of the move by way of any well regarded output.



A decade ago Konami was comfortably seated among the triumvirate of globally successful Japanese developers in combination with Capcom and Square-Enix. Konami had two very successful franchises on the PS2, namely Metal Gear Solid and Silent Hill which had both gotten their start on the original PlayStation system. Despite setbacks in trying to bring over to 3D the successful 2D gameplay of their Castlevania series, and diminishing importance of many of their 80’s franchises such as Contra and Gradius which had gotten their starts in the arcades Konami was in a good place due to having successfully managed to replace their ailing back catalog with new and exciting properties with a lot of future potential.

Metal Gear Solid as well as the Silent Hill series saw two well received installments on the PlayStation 2 hardware before Konami’s fortunes began to change. By the fourth installment the Silent Hill series had begun to stagnate and genre fatigue for Survuival Horror type games had begun set in the market. It was time for Konami to put Team Silent, the creator team of the successful series to the challenge of creating something new, but instead the team was disbanded and absorbed back into the company.

This was a move typical of Japanese developers of the time as not long ago SEGA had employed a similar move on Smilebit, their critically celebrated, but ever financially disappointing star team of Panzer Dragoon Orta, Jet Grind Radio and GunValkyrie fame. Capcom would similarly follow through by disbanding a similarly all star team of theirs whose critical successes had not netted the desired amount of financial success when they disbanded Clover of Okami, Viewtiful Joe and God Hand fame.

After Konami disbanded Team Silent, they, in a move that would become typical for their future strategy, and aided in their decline, instead of letting that franchise go in favour of focusing on creating a new successful property chose rather to dig their heels in. The Silent Hill franchise was handed to various overseas developers to produce for it various sequels and reboots neither of which managed to resuscitate the lost importance of the franchise, and Konami is still at it with the next overseas developed installment on the way.

Another of Konami's once successful franchises now become victim of their heel digging is Castlevania. The recent lavish overseas developed 3D reboot of that franchise managed to produce something conceptually even more forgettable than the half hearted N64/PS2 3D Castlevania titles before it. This was achieved by Castlevania: Lords of Shadow pegging a franchise with a previously unique identity into the hat of contenders in the overcrowded God of War like combo action genre.

Despite Konami making an earnest effort by providing the overseas team tasked with development duties with a very lavish budget the reactions to Lords of Shadow were nevertheless mixed. What most can agree on is that a franchise reboot as beneficial and universally acclaimed as Symphony of the Night it definitely did not turn out to be, so for all the resources spent this entry in a overcrowded genre is not a good stepping stone for any sort of bright future.

Part of Konami’s current strategy has been relying very heavily on overseas outsourced console development to the point that for the last few years, outside of Hideo Kojima's now separate Kojima Productions unit, not much domestic console development is being output from Konami Japan proper.

This lack of faith in internal teams, and their ability to create new console franchises is an ongoing theme at the very center of the struggles that have cost the former Japanese giants their global position. Despite their titanic size and sheer number of employees under the Konami umbrella the developer unfortunately had few identifiable star team/producers to turn to in time of need. In the last decade they have had Hideo Kojima, of Metal Gear Solid fame, Team Silent, responsible for the Silent Hill franchise, Koji Igarashi, of Castlevania: Symphony of the Night fame, and lastly Shingo Takasuka AKA “Seabass”, the producer of Konami’s Winning Eleven football series.

Of these only Kojima and Seabass have had any meaningful support to pursue console development projects, and the role of each has been very clearly defined. Team Silent is no more and Igarashi was put in charge of handling handheld 2D iterations of the Castlevania franchise and as of the overseas contracted franchise reboot his role in that series is now nigh none existing.

In face of no clearly identifiable star teams present inside the corporate umbrella to trust with a majour console undertaking Konami has been content with letting overseas developers, in whom they have put an uncalled for level of faith, to pitch for the chance to take up the mantle instead, and none so far have managed to do exactly that.

This sort of managerial conservatism has meant that the only thing Konami is known for today is the Metal Gear Solid and Winning Eleven franchises and it is therefore no wonder why here as well Konami has dug in their heels by Hideo Kojima being continually put to work on more sequels in that golden franchise instead of being allowed to work on something new.

So forth Kojima Productions has managed to deliver a string of successes despite these restrictions, but time may come when Kojima, like so many other talent before him, will desire creative freedom and may choose to divorce himself from Konami before the only thing he is known for becomes that series, and that series alone. Kojima is a special case in that his pedigree will ensure him being able to find success outside of the corporate shell should he choose this option.

Of the former triumvirate Konami is the one which appears to have fallen the hardest in the western market, and their stubborn refusal to accept the errors of the strategy that cost them their lead will ensure that they will likely be worse off still in the coming years.


Capcom was one of the few Japanese developers that seemingly started this generation on a very strong note with two great examples of how domestically developed console games need not necessarily be imitations of popular overseas convention trappings in order for them to be successful on current generation hardware. This they demonstrated with early generation successes such as Dead Rising and Lost Planet, two titles with a rather unique identity and a great starting point for Capcom’s future.

Unfortunately somewhere along the way Capcom experienced a similar loss of faith in the viability of international success of domestically developed titles with an independent vision. Thus Capcom’s strategy following those two titles came to mirror Konami’s and unsurprisingly produced very similar results.

Capcom’s cautionary tales then came to number such endeavours as the overseas developed Bionic Commando reboot and their new overseas developed property Dark Void. These dismal failures were then followed up by a domestically developed sequel to Lost Planet whose every prospect of success was sapped by an almost schizophrenic change of direction. This came about by a mandated need for the sequel to at the same time become more like the successful portable Japanese property Monster Hunter, while also become more westernized by way of an overwhelming focus being put on cooperative play, a recurring theme in Capcom’s westernization strategy, to the point of the single player aspects being wholly neglected.

The sole success story of Capcom's clumsy rush towards westernization stands as the western developed sequel to Dead Rising which was both well received critically and financially. But this should not have come as much of a surprise as Dead Rising 2 stuck pretty close to the template established by the domestically developed original. Capcom could just as well have left development of the sequel up to the original creators and avoided the four year delay that development changing hands ended up costing the franchise.

It is hard to identify any benefits the sequel ultimately came to receive by being outsourced since conceptually it is so close to the original and what marginal improvement came with it were not indicative of its lengthy development cycle. In that regard the performance of the sequel was very much par for the course of successful IP’s having sequel duties handed to another developer as was the case with titles such as Bioshock and Fallout 3. If the developers are competent and the schedule and budget involved is adequate then the sequel will be solid, if not unremarkable.

In this regard by Capcom not trusting the original creators to improve upon their initial vision meant that Dead Rising 2 fell short of the company tradition for creating the sequel that will go down in history as the clear superior and fan favourite such as was the case with Mega Man 2 and Resident Evil 2. Similarly by the extension of the same lack of faith in domestic development they are likely to snuff another company tradition in case of the Devil May Cry series. By outsourcing the franchise reboot for Devil May Cry Capcom will likely also fall short of their own great stagnant franchise refresh tradition as established by Mega Man X, and Resident Evil 4.

Capcom’s seeming reluctance to trust internal teams with the effort and resources required in order to create the next big console property is understandable to a point. Like Konami Capcom has few internal star teams left that they may feel can be trusted with such great financial undertakings.

 It is a known fact that over the last decade Capcom has steadily been bleeding talented game director/producers at a rapid rate. These mostly chose to abandon Capcom due to the shift in managerial strategy which essentsially snuffed all prospects of creative freedom. Much of this talent then went to create some of the few rising stars still brightly shining in today’s Japanese industry such as Platinum Games, Tango Gameworks and the Japanese arm of Ignition Entertainment.

The most recent talent to wrestle himself loose of Capcom’s waning grip was Keiji Inafune, himself a very outspoken critic of the Japanese industry. Many have heard him quoted to say that he feels that the Japanese industry has fallen five years behind the western counterpart. Outside of certain sensationalist remarks I doubt a great deal many people with whom these words have struck a cord are very well educated with Inafune’s true sentiments.

 Available to any party interested in becoming privy to these he did do a very candid, lengthy and revealing interview with 4Gamer where he announced his departure, his motivations for the move and outlined his vision for the future. Let it be recorded that in the author’s opinion his proposed solutions for Capcom and the Japanese industry as a whole is a medicine many magnitudes worse than the disease it is supposed to cure.

In short Keiji Inafune’s sentiments stand as a perfect manifestation of all that is wrong with the current managerial approach that Japanese development houses have embraced. He is of the opinion that good games can come out of overseas outsourcing, and in his opinion the means of making it viable is just a matter of pairing the right overseeing Japanese producer with the right overseas team of developers. He actually uses the automotive industry as an example to illustrate his point. The crux of the problem with this approach is the prevalent opinion that the development of a title is to be regarded as being no different than the manufacturing of car parts, which essentially divorces the importance of a team’s creative soul on the end product.

To counter this attitude and prove it erroneous one need look no further than the handful of successes, both financial and critical that have come out of Capcom in the last 5 years. Dead Rising, Lost Planet, Resident Evil 5, Street Fighter 4 and Marvel vs Capcom 3 are all Capcom properties with domestic development behind them and this is easily felt in the vision and quality of the end product, as well their future prospects.

One thing to take note of in the argument of the big Japanese developers re-embracing internal development is the presence of certain hidden factors at play inside the likes of Capcom, Konami and Square-Enix. It is a known fact that most of the internal teams at such studios struggled with the technical and logistic challenges of making the jump to developing games on current generation console hardware. These early struggles led to majour delays and in turn led to company managers losing faith in the prospect of lengthy and expensive internal developments which in turn opened their eyes to the more attractive prospect of overseas developers and their quick and streamlined turnaround.

The outcome of this erroneous strategy is that one, outsourcing to overseas developers have so far had a very negative effect on quality. Also, as briefly mentioned earlier, by not investing in internal teams early on in this generation Japanese developers never allowed them time to overcome their struggles and streamline their own methods by way of some much needed experience and as a result become better suited to the task at hand today.

Another factor working against most Japanese giants is that age and sheer size has brought with it a legacy of bloat and mismanagement by managers and executives who each possess a very weak insight into the products that they are put in charge of producing. These thing has led to the bizarre outcome of studios thousands of employees strong nevertheless relying heavily on outsourcing in order to produce most of their output. These realities were also addressed by Keiji Inafune in his famed interview, but his proposed solutions were in a word, frightening.

Other things of note in Capcom's recent history is the overwhelming success of the Monster Hunter series in the domestic handheld market, and their attempts at trying to recreate that success in the west. Unfortunately in case of that series its success is very much a product of its platform of choice and unique regional sentiments. Here Capcom's managers demonstrated a failiure to understand their own products as well. This they did first by trying to bringing the series whose success was very much married with the realities of its portable host to a console, and then with their choice falling on the Wii. Secondly they attempted to put a big marketting push behind the series in the west, while not taking into consideration that the factors which lead to its success in its home market were none existent in the overseas market. Thirdly they attempted to port over the success of the monster hunter series over to the west once more by forcibly injecting parts of its design into another franchise of theirs, Lost Planet, and thereby set the stage for that sequel's dismal failiure.

Capcom is a developer of historic exquisit pedigree, and unlike Konami which only has Kojima Productions to fall back on, Capcom is technically in a very good place internally. They have invested in their own premium console engine technology, named MT Framework, which they so far have successfully used to make some internally developed titles of note. They also, in spite of having lost so much good talent, still count many trusted game director/producers among their ranks.

Thus the factors holding Capcom back have no relations to their technical or creative abilities, but rather their managment practices. Capcom's managers have demonstrated a poor understanding of the market that they desire, the overseas one, and have displayed little appreciation for the quality of video game craftsmanship. They have demonstrated a view of games as mere products and the process of their making being regarded as no different from a manufacturing process. Therefore they have displayed an overwhelming preferrence for outsourcing to overseas developers whom they apparantly pick based on purely technical factors.

The factors used to decide funding habits of these managers is how much a developer manages to impress them by demonstrating their technical prowess through a pitch demonstration, or what they bid for a project of a given scope and with a given timeline. Blue Castle Games, for an example, mentioned that Capcom chose them as the developer of the Dead Rising sequel when they showed them a piece of technology they had built that allowed for the rendering of countless zombies concurrently on screen, this a purely visual attribute.

The managers responsible, who have since outright bought Blue Castle games, might conclude that because Dead Rising 2 was a financial success then outsourcing was the right way to go. But they would then fail to appreciate that the bulk of cause for the success of the sequel was the domestically developed original, and would not appreciate that such great beginings cannot spring from outsoured development.

This series will continue in the third part which will bring to completion the lineup of Japanese developer/publishers of great import by going over the strategies of Namco-Bandai, Square-Enix, SEGA, Platinum Games, as well as some small studios who have in recent years managed to outshine the aforementioned giants by way of a healthier survival strategy.

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