The Hudson brand has serious history in the game industry. Hudson Soft began operation in Sapporo, Japan in 1973, and was Nintendo’s first third-party publisher. As such, the company has enjoyed a longstanding history and collaborative spirit with Nintendo which continues to this day.
In Japan, the company was responsible, along with NEC Electronics, for the release of the PC Engine line of home consoles, called the Turbo Grafx 16 in the West. The console was a humongous success in Japan, though not so much in Western markets, launching too late to make a significant impact. The subsequent console, the PC-FX, did little to help the company, with some 64 games released, as other companies such as Sega with its Sega CD and Philips with its CD-i also foundered with FVM-based game models.
Since that time, Hudson has moved more operations into software, eschewing the hardware scene almost entirely. After many years not operating a U.S. office, Hudson opened Redwood Shores, Calif.-based Hudson Entertainment in 2003, headed by John Greiner, who has been with Hudson for over two decades. He spent the grand majority of those with the Japanese parent company.
Hudson in the U.S. is focused on mobile entertainment (games and ringtones, specifically), but has recently branched out into console publishing. As the gateway to the Turbo Grafx, Hudson’s titles are appearing on the Wii Virtual Console in droves, and Hudson is taking this opportunity to re-launch the brand in the U.S. with more force than has been seen from the company since the early 1990s.
In this exclusive, lengthy interview with Hudson Entertainment president John Greiner and director of marketing John Lee, a lot of ground is covered, from the difficulties of launching Japanese IP in the West, to the decline and subsequent reinvigoration of the parent company, to the company’s relationship with Konami, of which Hudson is now a subsidiary. With occasional divergences into obscure bits of Hudson knowledge and a discussion of executives riding tiny trains, this interview should tell you almost everything you need to know about Hudson for the near future.
GS: How do you feel about Bomberman: Act Zero’s reception in the U.S.?
John Greiner: The problem is, I think, when you look at the way the Japanese intended the game to be marketed, and how it was marketed, there is a disconnect. And I think it’s an unfortunate thing that happened, because Japanese Hudson and Konami U.S. don't speak to each other. So that needed to be properly explained, because the game is made as a multi‑player battle game, which is what the Japanese Hudson people thought American people really wanted.
Mind you, the game is really made for the Japanese market, but they do look to see what American tastes are. So I think, basically, without knowing those key selling points, then the message was lost, and if you play that game as a multi‑player game over the 'net, it's great. So in Japan, you can take a game like that and you can tell the market exactly what it is, and they will respond in kind. But you have to tell them. That's the problem. That kind of thing happens. But anyway...
GS: So how long have you been with Hudson? I know it's been a long time.
JG: Eighteen years.
GS: Eighteen years. What were you doing before that?
JG: I started my career at Hudson, actually. I graduated from college and went to Japan, and found Hudson, and never left.
GS: How did you wind up there?
I was actually traveling, and met the owner of the company. Those were
the early days of the Turbo Grafx, so Hudson had just released ‑‑ I
should say NEC had just released ‑‑ the PC Engine, and they were going
to bring it to America. And Hudson was, of course, a very important
factor in the technology, the software, everything, because the whole
machine is Hudson's that they then licensed to NEC, so Hudson was a
very important partner for NEC.
The NEC guys were Americans, and Hudson was a very Japanese company, and they needed somebody to help this transition. So Mr. Kudo, the chairman of Hudson, had to do business with the chairman of NEC Home Electronics, an American guy. And there was a big cultural gap, not just communication but cultural.
So he hired me for that, and we just built the business as it rolled along, because it really was a big deal at the time. There was so much success in Japan, and suddenly here was the idea to bring it to America, of course, and they had a lot of potential, so it was a big deal for Hudson and it was a big deal for NEC.
GS: So was NEC involved in the Japanese launch?
GS: Ok, I thought so.
JG: So Hudson never released any machine, we just licensed the technology; and we continued to support Nintendo while we did that.
GS: Yeah, I remember that.
JG: And of course Nintendo knew that with no problem.
GS: So what was it like being in a Japanese company at that time?
JG: Those were the early days, not only being in a Japanese company, but just a foreigner being in Japan was really unique, because there wasn't this mass influx that you now have. You saw another foreigner walking down the road, you gave him a high five, because you didn't meet that many other people.
So in this context it was really exciting, and the company itself was exciting. They had, as you know, such great history, and they were just building upon that. I think at the time we must have been a $400 million company or so, so it was really steamrolling, and there were great games everywhere.
So as a gamer, you can imagine how exciting that would be, to be in a situation where you have all these new exciting products and you’re just rolling them to America, and the company is Japanese. It was a perfect situation for me, personally, but also for the company because they did very well off the entire business.
GS: There was a recent change in leadership in Hudson in Japan, right? Have there been any changes resultant from that?
JG: That leadership change came about almost two years ago, now, and that leadership change put Mr. Kudo in a chairmanship, and elevated Mr. Endo into the presidency. This was kind of spurred by our parent company, Konami, inserting new blood, basically, into the company, and just kind of shaping the company as they see fit, the majority shareholder.
GS: What is that relationship like?
JG: It's good. I think Konami is a great mentor for Hudson, certainly. I mean, they are a multi‑billion‑dollar company, and they do so many things so well, so we have learned so much from them. And the opposite is true. They, not necessarily learn, but they get many things from Hudson because we are a more nimble company who does a lot of new creative things that in a bigger company, you can't do as easily. So we offer them something, and we get a lot in return.
GS: Do they have first right of refusal on publishing Hudson stuff, or...?
JG: In Japan? In America?
JG: No. I mean, we have a good relationship with them; some games they do, some games they don't. It is pretty much on a game‑by‑game basis.
GS: It's more separate here than it is in Japan?
JG: Yeah, in Japan Konami does Hudson's distribution. Hudson's still the publisher, but they do the distribution.
GS: Hudson's still a publisher in Japan?
GS: OK, I was confused about that precisely because of that relationship, and since Hudson doesn't publish here, still, correct?
JG: Right, right.
GS: Are you looking to get back to that at any point?
JG: Yeah. We’re excited, especially with the release of Bonk, which was actually just released on mobile. So we are a publisher on the mobile side of course, but on console we are really waiting to see about Bonk, and how we can bring Bonk in, and that will lead to other things, we hope. We’re just excited that we have a new flagship character. It's not new, but we're bringing it back, so new in essence.
GS: Why now, to get back into the console space?
JG: Well, I didn't really say we are going to be a publisher, I just mean we are going to get back into it, we're going to still advise...
GS: I don't mean just on publishing, I mean in terms of console itself, like the development side of things, bringing stuff out.
JG: I think it's a good question, and it really relates to timing, not so much the market timing ‑‑ although that's helpful because all the machines are coming out ‑‑ but really timing within Hudson.
We have made this company successful in a little less than three years, so Hudson understands that and would like to build on that. They would also like to build on their foreign markets, so this offers them a really great opportunity to step into these foreign markets, and we can drive that business for them, basically, or at least help. I mean, everything takes time, and we do everything on a step‑by‑step basis, but you build up and you become more worthwhile as a company as you grow, obviously.
GS: It sounds like it was more on your side, deciding to come back into console in the U.S., or it was it a mandate from Japan?
JG: No, we always pushed it because we thought, hey, first of all, we've got a really talented group here in development and marketing and sales, so we know what we can do, and we know how we can enter the market, we know how we can help Hudson Japan. We have a lot of creativity, so at the very least we could give them the creativity that makes their games more relevant for America. Otherwise you get that really Japanese feel for every game, and that's OK for people who really love Japanese culture, but we want to make it a more mass market.
So we’ll start by giving them some advice and doing some of the graphic work here so that those models can be then inserted in the games, and we can have a more worldwide approach to our software.
GS: Yeah, we were actually talking on the way over here about Tengai Makyou, and those types of games that are really Japan-centric.
JG: You know about Tengai huh?
GS: Of course!
JG: Yeah, I respect anybody who does know it, because it's such a good series.
GS: I've got a specific question for you on that later on.
JG: Oh you do? OK. We'll get back to it then, no problem.
GS: But yeah, Tengai Makyou is a good series. The one I really played was the Kabuki Den one on PC Engine Super CD.
JG: I remember when that came out. I mean, that was widely acclaimed in Japan and unfortunately never made it to the States.
JG: Personally I've tried very hard to get that title to the States. Unfortunately Working Designs bit the dust, and they were the perfect candidate to do that because they really understand that market, so that's too bad.
GS: There's always Gaijin Works.
JG: I’ve talked to Victor and you know I've asked him to do things, and hopefully someday this title will reach the market. I think it will eventually.
GS: I guess there hasn't been much in terms of coming back to console here yet, but how successful do you think it's been so far?
Good. I think really what we're talking about is a meeting of minds
between East and West [within Hudson]. And so what we've done is shown
them what we can do. And of course they were like "Wow, great." You
know, this is obviously American and obviously very good.
So I think that when you start to work together, the first thing you go for are the things that you agree on, once you get past any insecurity of meeting somebody. You start to agree on your like points, and so we've already started that process of where you know, "This is good, this is good, this is good."
Once you get a common ground settled, then you can start to work on the more difficult points, and that will run as a game will run through its course anyways.
GS: Right, right.
JG: When you get down to making hard decisions because of whatever the case might be -- time, money, you know, space, memory space, whatever -- you can have those battles. So far everything has been very good, and you know I think it's a great opportunity when you mix American style with Japanese game polish and game play. I think it's a really winning combination. And Nintendo's proved it a couple times so...
GS: How did Hudson in the U.S. become what it is right now? Initially I thought it came from the Japanese company, but it sort of sounds like it sprang up independently, or…?
JG: Yeah it did actually, for a number of reasons. I've always been very close with Chairman Kudo, and worked with him for 15 years over there and then three years here, but you know, I was sitting next to the guy. We're very close in business and in friendship. So he could trust me to come over here and I think that's really the key point is that he wanted an American company, not a Japanese company. Most Japanese companies come over and they're represented by a Japanese chief even though he's not doing the day-to-day work.
So that's a very major influence because now we give him pure American thought, ideas, creativity, games. Everything is really American and there's no buffer. Japanese companies often try to buffer their situations, because naturally business is up and down but there's more fear in a Japanese company, I think, and that's something that you want to put a buffer in between. So we haven't had to do that. And the Japanese at Hudson are very international thinking I would say and so they're allowing this. You know, it takes two. You can't send me over and not have anybody that's willing to talk to me because then you'd have the same mess.
So, we've been able to mesh on that and they've understood that they've got something authentic, and so we can work off of that. It's a nice base, unusual base as well.
GS: Yeah. How many developers does Hudson actually employ in Japan?
JG: Developers in Japan? Don't quote me exact numbers, but I think we're about 450 or 460 people, and out of that I would say probably 360 to 380 are developers. By that I mean either programmers, designers, working on the goods basically.
GS: And I guess you're planning to ramp up some development here?
GS: What is your goal?
JG: Well we already have development here in that we have...
GS: Mobile development.
Mobile development, yeah. And so we're using some of those sources and
also bringing in new sources to shape the creativity of the products
that we'll give to Japan. So we'll do some graphics for them and send
it over, and then go back and forth, and develop games jointly.
Eventually they'll probably be sending their stuff here and we'll be doing things so it'll go both ways.
GS: So you do a lot of asset sharing and things like that I guess.
GS: Where would you want to see Hudson [U.S.] in like five years, or maybe even ten?
Well, first and foremost, I think our business has always been
dedicated toward mobile, so we want to be one of the top five mobile
companies in the U.S. And I think that Hudson is the kind of company,
we have so much development, and so much archive development, that
there's a lot for us to do. And I know some companies are starving for
product and they come to us and ask us if we could license them some of
our stockpile, so we're sitting on a goldmine and there's no reason why
we shouldn't be able to capitalize on that.
On the console side, I think in five years, I would want Hudson - one of the five biggest might be a little aggressive - but you know one of the top ten console companies I think is a possibility for us. So we'd like to be thought of as a major supplier of games to the American market.
GS: Is the money there to support that kind of ramp up at this point? I know that Hudson had to scale down a lot.
JG: You know, they did. That's a different story, there's a reason, and if you want to hear that later, I can explain it. But what Konami has really done for Hudson is put great financial legs under us. And I think that as long as a company is profitable then the sky's the limit, assuming that you have the underlying trust which is always important.
So we have the trust, as long as we capitalize, as long as we execute, and as long as we're profitable, then there is every facility to do that, so I don't think money will be the problem.
GS: What happened to Hudson’s hardware division?
JG: That's a good question actually. Hardware in Japan was located in a building that we created out in Hokkaido's more rural area. It was a very cool building that they did and had a train that ran though it - a train that you could actually sit on and ride. And there was a station in the building.
GS: That's awesome.
JG: It was really awesome. It was a great testament to the Kudo brothers [founders of Hudson Soft in Japan] and what they had built. And they loved [trains], I don't know if you know the story about Hudson, but the name Hudson is derived from the train.
GS: Yeah I did know that.
JG: And so these are scaled down Hudson trains.
JG: And they really were awesome. Coal‑powered. You know, fire the train up. And I saw, many times, very big executives from NEC, to Nintendo, to all the bigwigs out on this tiny little train riding, going round in circles, in and out of the building. So you know, these are conservative people, you don't expect that to happen.
That's one of the unique things about Hudson, they have a lot of great culture and things like that. But anyway, what was the question, again?
GS: What happened to the hardware division?
JG: Ah, the hardware. So game R&D was a victim of, I think, some consolidation. When Konami bought us, they consolidated some parts and they saw a building of that kind as being unprofitable.
You can call hardware research and development because basically they create things, but they are also pushing limits trying to see what they can do and so that was just kind of incorporated into the main Hudson structure. So there are still people doing work on hardware and middleware, but it’s not a separate entity like it used to be. It used to be its own division with its own building and so I think we just retrenched a little bit.
GS: There is no more chip development or things of that nature?
JG: Yeah, they still do chip development. You know, the company itself is always doing smaller things like small games. Do you know what Teku Teku Angel is?
GS: I don’t.
JG: It's a little pedometer - it gets happy when you walk a lot. They're just coming out with a new one. They actually have a game that they put out for that; Teku Teku DS.
So all that inherent technology is part of our culture, and the nice thing about Hudson is that it’s always been very much a three-pronged approach to software development. And in that you've got a hardware division, a software division, and a middleware division. So that middleware division is especially important because you’ve got to have your own tools. If you don't, you're relying on somebody else and you can't be as creative, and we have always had a very incredible tool division which, well, you probably know about Nintendo and how those tools are based on Hudson's tools.
GS: I didn’t actually know that.
JG: Yes, if you look at Nintendo's development kit, it’s not on every kit, but you can choose to have Hudson middleware – the hardware is theirs, but I should say the software that runs the middleware is run by Hudson.
And that still goes strong, so my point is those divisions are there. It's just not as visible.
GS: I have to ask, though – I wonder if, even on a small scale, Hudson would ever consider another console, be it handheld or whatnot.
JG: Probably not, I don't think they would.
GS: That’s too bad. I’d love a new Turbo Express [the portable version of the Turbo Grafx].
JG: Do you have one?
GS: Yep, with the TV Tuner and everything.
JG: Even today, it's not a dated product, if you look at it.
GS: It's got a good screen.
JG: It's got a great screen. It's a battery hog though. That was the problem. But in those days you know, that was spectacular.
GS: It was so expensive though.
JG: Yes, because of the screen.
GS: But I bought mine for 75 bucks.
JG: You did? Recently?
GS: No, back in high school. Even when it was expensive. It's because I got a deal from another kid.
JG: (laughs) See what happens when you beat somebody up? I still have mine too, actually.
GS: But back to the question.
JG: I don't think that's on the horizon. The developments in the hardware side are mainly games.
You know, the nice thing about Hudson is the game culture is like everybody is a big kid, and the personalities that made up Hudson were awesome. That’s why I’ve stayed with the company for such a long time, the people who made up the company were all fun people and all showed that in their daily lives and that's how you come up with good games.
You look at companies today, especially in the mobile space which has a lot of newbie companies like Glu and I-play and those guys are there for a big pay off. It's part of a process, and it's a money game. This will not last forever. It’s going to revert to people who can make games for a long, extended period of time and I think that's really where our success lies - we're going to follow the great gaming we've always had and continue to put that on all platforms. So instead of being very mono-visioned, we want to really have a vision toward every platform and get our entertainment across all platforms.
John Lee [Director of Marketing]: You said a really good one. Platform agnostic‑ we just create content and launch on whatever platform is out there.
JG: If you have flagships that can derive that, then I think that's the success of the company.
GS: You were talking about personalities. I actually don't know what [company spokesperson] Takahashi Meijin’s title is.
JG: I don't know it either!
JL: Marketing promotions.
JG: Is it? Definitely marketing division. I didn't know if he was head or not. He did a lot of work with the Bee studio which we had.
GS: How about the Virtual Console stuff? How did it actually come about?
JG: That really came about I think, because Nintendo saw a great opportunity to give consumers a flashback - that you could do that on today's broad band lines without overbearing it.
Nintendo is concerned about a great user experience. They’ve proved that over and over and over. They're very true to their customer and so they didn’t want to put out everything on the broadband line, just the classics. There's certainly always going to be a demand for the Turbo Grafx, Genesis and the Super Famicom stuff so I don't think that they could miss on that. And obviously Hudson controlled the Turbo Grafx gate, and so they came to us and asked us to do that.
We're obviously very close to Nintendo. They've always been a big supporter of Hudson, and we’ve supported them. And they own shares of Hudson. So I can't think of a better mentor than Nintendo and we've always been respectful of that and deals like this come about because of this long term relationships.
For us the benefit of the Virtual Console is bringing all these old games back into the public eye, because you can re‑launch brands off of this, it offers such a great opportunity.
More from Hudson's game archive.
GS: Has there been any consideration to bring over some of the PC Engine titles that didn't make it here?
I think so. We're going to work on the Turbo Grafx titles, but there
were 600 some-odd PC Engine titles, and there were only 150 or so Turbo
Grafx titles, so I think that if people tell us they want these games,
So we'll blow this up, we'll make it very visible, and we want people to tell us what they think. We've set up an 800 number for help, and that kind of thing, so we'll be able to hear what people really want, and I think there's a lot of demand for it. Wouldn't you say? [laughs]
GS: I would. I've got about 200, or probably more.
JG: Turbo Grafx, or PC Engine games?
GS: Everything. It's a mix.
JG: So you can play CDs on both, but you can't play [PC Engine] HuCards [on American systems]...so you've got an adaptor?
GS: Well, I do have an adaptor, but it doesn't work too well anymore, but I have two things. For one I have both Japanese and U.S. consoles. The other thing I have is this aftermarket product. You probably don't want to hear about it.
JG: No, I do!
JL: We actually probably use it. [laughs]
JG: [laughs] Yeah, I was going to say!
GS: Well, it allows you to load ROMs onto it, and you put it into a U.S. system cart slot. And, I forget who makes this one, but I’ve never used it, because I have most of the games that I want, anyway.
JG: Do you have Kato and Ken?
JG: No? You don't have it?
GS: Oh wait, yes I do. I have JJ and Jeff [the American version of Kato and Ken], I don't have the original.
JG: Try to get the Japanese one, that's a great game.
GS: I know...
JG: They ruined that game.
JL: I did. I picked one up for myself when I was last in Japan. I saw it, and it was the only one left...
JG: Oh really? You got one? How much?
JL: 35 bucks. It was a good deal.
GS: Man, I thought it was worth less than that.
JL: They've been going up, that's for sure.
GS: Yeah, I've played the ROM a couple times. I would like to own it, though.
JG: The NEC U.S. side said, "Oh you can't do that, you can't have people shitting on each other. You can't have people farting on each other." Why not? You know, kids would love that.
GS: Of course they would!
JG: So they just ruined that game.
JL: Ever since Beavis and Butthead, now it's expected.
JG: Yeah, all right. Exactly, it's like why wouldn't you?
GS: It's like Toilet Kids, the Taito game that was also out for PC Engine, with kids flying on toilets. It was a vertically scrolling shooter with kids.
JG: That one I don't know, unfortunately. [laughs]
GS: So, what older properties do you want to bring back? And I'm not going to hold you to anything.
JG: We're looking at...you know, eventually all Turbo Grafx games will be on the Virtual Console, because they’re going to be emulations. There are no limitations to what we can really do as far as development, because an emulation is not going to take as long as brand new development. So you'll be able to see every game, virtually, it might take a couple years, but that’s the plan. What we're really wanting to do is see what kind of brands have an attachment, and bring those to mobile, bring those to other systems.
GS: So you think the viewing sales on the virtual console will be a good indicator on what you should bring back?
JG: Yeah, sure, why not? I mean, certainly you're going to have an audience that's attached to that, and what I think is that if there's a reason for that attachment - and usually there is, there’s something about the game that just makes it really fun - you can repeat that, and you can create something that's much more modern but has the same hook. So, I think that's always what you look for, is every good game will have a distinct hook that you can catch onto.
GS: Will you be looking at any of the NEC Avenue or Interchannel stuff?
JG: Yeah, because that was some of the best stuff. There were some great games that NEC Avenue came out with.
GS: Download was NEC Avenue [which later became NEC Interchannel]. That was pretty good.
JG: What else did they do? Because I remember we had to negotiate with NEC Avenue for quite a few titles.
GS: NEC Avenue did a lot of weird stuff. I know there was a lot of co-publishing happening.
JG: Yeah, I specifically remember them because we had to sometimes fight to get those games to America -- they were really protective of them, and there were a lot of great games.
GS: It sounds like you've been using mobile as a kind of vehicle to return to console in a way? I know you're not in mobile for the short term, but…
No, actually, it didn't happen that way at all. The reason I left
Hudson Soft to come here was because of mobile. Because I saw what had
happened in Japan and said, “this is going to be huge.” This is going
to be massive. It's going to be the greatest electronic device ever.
And it already is.
So, it was the power of the mobile phone and that business that interested me. I had a lot of chances to come back before that, but I always said "not yet," because you need an opportunity. You need something to spark, and then once you get over here a lot of other things start to happen, and that's at the point where we are now, where we say, OK, we're already successful with mobile, what's the second step?
The next step is to fill the company as a true Hudson subsidiary, and that means you have to have the development there. You have to have the creativity. You have to have the people that know how to gameplay, and know how to polish things, and know how to QA things, and know how to market things. So, it's really a matter of natural growth of a company, basically.
GS: How do you feel about the current state of phones as far as game playing devices? Because they're definitely a lot easier to deal with over in Japan and the power is a lot higher.
JG: And you're going to have that here. Do you know the 9800? The LG9800?
JG: I've got it in my pocket. Let me just whip it out here. So, this is the first phone, in the world really, that has made a stab at being a game phone.
GS: I know Qualcomm had a prototype called the Slingshot - I have a prototype of that.
JG: This is the Slingshot in commercial form.
GS: Wow – it’s reversed from the original design though.
JG: It's not perfect. But, we will enter a new era where you have game phones being made. We just met with Qualcomm yesterday and they displayed their 7500 chip set which is PS2 quality. Whereas, this is about PS quality here.
GS: Yeah, I've been hearing that mobile is definitely going to ramp up graphically. Actually, Kosei Ito at Square-Enix, he's in charge of their mobile stuff and did Final Fantasy Before Crisis and all that. He said once it gets to that point of good graphics he's going to quit.
JL: It's almost like a sure bet. I mean you look at where Europe is and where Japan is. This is your crystal ball to the future. You know it's going to get there and it's just a matter of timing at this point.
JG: It really is. So, figure by this time next year, you're going to have a PS2 in your hand. And, not only that, you're going to have it in your pocket where ever you go. Why would you buy a PSP, you know? That's when you get to the point where you work out the joystick and some other small things like that and you've got a very powerful device, and, by the way it's also your Internet and it's also you camera, and it's also your video camera, and it's also your mirror, and it's also your wallet. All these different things in one small device and you got it with you where ever you go.
You've been to Japan, you've seen the fingerprint identification reader on the phone. And that is so powerful, because then you know it's my phone. I can charge [purchases] on it. I can do all these other things on it, too. Not to say that America will be the same. But, I think we'll follow the technology very closely. How we use it might be different.
GS: The train thing really seems to be what has driven mobile use in Japan, in my mind, because everybody takes the train for transportation and so, you can check your Internet, you play the games, you can check your Mixi [Japanese equivalent of Myspace] and things like that.
I think it's a common fallacy though, because if you see what happens
at ‑‑ the train is just one part of a Japanese person's life, just like
in the U.S. driving is one part of our life. But everyone has time on
their hands. Maybe you're in the bathroom, maybe you're at the airport,
maybe you're at home in bed. You always have time.
The timing is not so important as its portability. The fact that it's in your hand all the time, that's what key. And, secondly, that you can download what ever you want, whenever you want. You don't have to go to the store. Those two things mixed together is what makes it really a dynamite product.
And you'll see Japanese using their phone all the time anyway. Yes, they do use it on the train, but really that's the excuse that Americans give for why it hasn't picked up the way it has over there. My opinion of why it hasn't really picked up is just because it hasn't been marketed well, that's all.
don't think that the carriers really have lived up to the huge power
that they could have, and they probably don't realize exactly what they
need to do. But it will become more and more obvious as more and more
phones become higher end and people want to have that next game.
And, maybe they want to buy Verizon because only Verizon has that phone, for example, or that game for example. So when you have that kind of exclusionary model, I think you're going to have a whole renaissance of hand‑held gaming.
GS: Although, and again, it could be part of the problem of not being marketed right, games are still a really small percentage of the carriers' bottom line.
JL: Data in general in the U.S. is still only about, at most, say 10 percent. Where Japan's almost up to 30 percent.
JG: I don't think it's the games. I think it shows that people don’t understand their phones and have that relationship with the phone. Because, it's not just...
JL: It's a phone in the U.S..
JG: Right, it's a phone in the U.S. still. Where in Japan it's the entire Internet.
I actually think if it's not the carrier ‑‑ because, they may never get
to that point, they'll wait until the business grows to that point.
One of the interesting things that is fascinating is this younger generation. Kids who grow up with this and now have it ingrained in them. You look at something like instant messaging where, in my generation, people have the attitude of “I’ve got to do it because of the people in it.” Kids today don't live without it. And it's become that way with their phones.
it's not necessarily that they're traveling any more. It's just that
when they're hanging out with their friends, they're still text
messaging the guy who's across the street or playing the game or
sharing some data.
So, when that generation that's 14 today, turns 21, by then it will be pervasive because it's part of their culture.
JG: Yeah, exactly. And, even if the carriers don't step it up, which, as you said, is really an economic thing, people will adopt it and it will become just as important as it to the Japanese.
GS: Some people have done mobile to DS transitions and things like that. Have you thought about that at all?
JG: No, because I think that for Hudson, we would not do that. We would not take ‑‑ you're talking about the code?
JG: Yeah, when you develop for the DS you develop for the DS. You don't want to take something that's not meant for that device. Because yes, we want to have an agnostic platform for all of our games, but we want to develop for each and every one of those specifically.
GS: Why do you think there's been so little from Hudson for so long in the West?
I can tell you very honestly that there hasn't been an opportunity for
them. It hasn't been that they haven't tried. I think that they've
tried but they did it the Japanese way. This time this didn't and the
results are already obvious to them.
It's a matter of understanding oh, here's how you do it, number one; and also number two, that's a huge market out there. So, now they're thinking world first - they're not thinking Japan first all the time. They're thinking world first.
It's not like actually, Hudson was ever really gone from the U.S.
market. It's that the focus has been much more behind the scenes. And,
when you're developing middleware, or you're developing for other
people, the publisher gets the limelight more than anything. And,
that's a very sort of Japanese mentality, which isn't necessarily
focused on the marketing part.
I think what's fascinating, what even got me on board, it was the Hudson name still lived on through those years. I can't say how many people there are that are fanatical, just as you are, about the name ‑ like, there's an opportunity, and there’s strong brand equity. And for us not to find a way to aggregate all these businesses under an entertainment unit that included the mobile, including the console, include everything together. It just seems like a smart business move. It's like, here's your opportunity, it really does make sense.
JG: John has a point, it never really went away. One of our big business drivers in Japan is an RSD division. OEMing, basically. OEM software for other companies, for Nintendo ‑ Mario Party, you probably know, Sega Party [Sonic Shuffle –Ed.], all these different games that Hudson has done on a third‑party basis.
GS: Ninja Five‑0 for Konami?
JG: Uh‑huh. Fuzion Frenzy, there's been a lot that they've done, so we're not always in the spotlight. You know, I think traditionally, if you're asking why wasn't Hudson successful before, it's really been marketing. So the games have always been there, whether or not they fit; there's been plenty that have been able to fit, but it's really been the marketing.
And that's where you really need American people running the show, because it's hard for the Japanese to understand the importance the differences in culture and how you get to people, how you make them buy your product.
GS: Branding, too, because the Hudson name wasn't always prominent.
JG: They're like, "Branding? What's that?" Because that's not a Japanese concept, you know, that's very American.
GS: I know you’re supporting the Wii - do you think that's easier, from a somewhat smaller company's side, than large next‑gen development?
JG: Yeah, definitely. What Nintendo's interested in is high‑quality, polished game play, and so they've given developers the tools to do that. What they don't provide you is the tools for incredible graphics, and incredible lifelike things that maybe Microsoft and Sony have been focusing on. So it's just a different market, and I think that people tend to say, "Oh, Nintendo lost the last round." Really, they didn't lose; they were very successful in their own thinking, in their own box.
GS: They made a lot of money.
JG: So I think it's just a very different model, and we want to support everybody. So for us, we'll create games made for that model; and then for Sony we'll create games for that model, and so on.
GS: Are you going to be able to make games for next‑gen, like 360 and PS3, with the current staff size that you have?
JG: No. You know, our idea to create console games should be done step by step. And for us to dump a lot of money into making a real impact on next‑gen is obviously a much more expensive proposition. So we want to take it step by step, and do the things we can do here, hone those things, and then step into the next level and then the next level. You're not likely to see a full‑on, huge company this year; it might be next year that we start to take bigger steps and bigger steps. The reason is because we all understand the timeline.
Most companies have a very rigid timeline that they have to follow because their investors are VCs, or they want an IPO, or they want to get out; and working for a Japanese company offers you this security in knowing that there's a plan, and you follow that plan, and you grow step by step. If you've followed any of DoCoMo's model, as far as what they've done in the market, it's incredible. They had a twenty‑year business plan, and they just execute month to month to month.
GS: I know they've been doing well.
JG: Yeah, it's incredible. Talk about execution; it's been perfect. Every time I go back to Japan, I see their steps, you know. Very small, but you notice them.
GS: So, that said about next‑gen, what would you have done differently about Bomberman: Act Zero for instance if you had the power to influence them?
JG: Besides what I already mentioned, that there wasn't a connection for what the game planners had developed the game for and what the eventual publisher marketed the game as. I think that was the number one mistake. I think that taking a Bomberman game and turning it mech‑like was not a bad idea; you just don't call it Bomberman, that's all. Call it Act Zero, just don't mention the word Bomberman. Everybody knows it's Bomberman; it's made by Hudson. But you don't need to call it Bomberman, because I think that alienated people.
If it didn't have the name Bomberman, then people say, "Well, it looks a lot like Bomberman, and it's kind of cool, you know? It's a refreshing choice that you can have now." So I think that that was a problem. And then there's small things in the game: lack of a game save, the single player mode…
JL: It was designed as an endurance scenario. They treat their single‑player game as trying something different for each Bomberman. And this one was 99 levels you played straight through and you've got to beat all 99 levels. And a lot of people are going, "What, are we back in the 1970s, with no save game feature? Who does that anymore?"
JG: But there's a reason for that.
JL: Yeah, there was a logic to how they built it. Like, this is the kind of feature we want to design around. But that was never conveyed properly. The reality was, too, this is why we never talked about single‑player. No one buys Bomberman for the single‑player. The focus has always been on the multi‑player.
JG: Really, that's why they did that. It's a multi‑player battle game; it's not about the single‑player mode. They should have just left the single‑player out.
JL: That probably would have gone better, you're right. Do it the way they wanted, or not do it at all.
GS: The straight multiplayer game was done once before, although it
wasn't released; what became Saturn Bomberman was the internal Hudson
Bomberman ten player simultaneous battle game, Hi-Ten Bomberman. And
that became Saturn Bomberman.
JG: It's considered the greatest Bomberman ever.
GS: Do you want to leverage new IP as well? How are you doing that, and how important is it going to be?
JG: Here's the problem with only doing mobile - you don't have any leverage outside of mobile. And, quite honestly, the carriers look to Hudson as being a console player, and they want to see us bringing out Hudson games that we can then leverage on their side, because they know that CPs ‑ content providers ‑ are not going to spend massive amounts of money on advertising because of the low adoption rates right now.
So if you can advertise something hugely on console, and that trickles into mobile, they're very, very happy about that. So this is really what I think was the first notion ‑ I mean, there's lots of other reasons to go console, but that was the first shot across the bow. Like, "What should we do for console? How do we bring this back?"
GS: That's interesting. It's kind of ‑ I shouldn't say opposite, but using console games to promote mobile is definitely a different way of thinking.
JG: It's very funny. I was on a panel at GDC, probably three years ago? I was speaking as Hudson Soft, not Hudson Entertainment at the time. There were several people, maybe six different companies, all traditional game companies. One of the questions was, what do you see your revenues as in three or four years from mobile?
And these guys ‑ THQ, and a couple of other companies ‑ they were like, "Five to ten percent." And I said, "Fifty to sixty percent." And everyone said, "What the hell are you talking about?" Because that was unheard of. And we just passed fifty percent in Japan.
Hudson was always an early adopter with mobile, we were one of the first, and still are very, very close to DoCoMo and have that inner garden seat in the palace because of our early adoption and what we have done for them and vice versa, of course. Mobile has always been a big driver. I don't want to say that is going to be how it is forever, but certainly mobile until this day has been the reason we came here.
GS: In terms of new IP and things like Rengoku: The Tower of Purgatory and what not, are you looking to develop new properties internally?
JG: With mobile, we can take smaller bets. But, you are also not going to have a revolution based on a mobile game. I don't think it's ever been done. Has anything come out first on mobile and been brought over systems?
GS: It has happened, Asphalt: Urban GT from Gameloft did, Deep Labyrinth from Interactive Brains. Atlus brought it out here…that one didn't do that well, but there have been instances of it. But specifically I mean how important do you see new IP being for the company?
JG: Very, very, very important. That is the root of it. If you cannot create new IP you can’t move forward. You are always stuck in the retro. You definitely don't want to do that. You become obsolete. We think it's vitally important on every system and across the company as well.
GS: So you mentioned earlier, and I would like to touch on it, the decline of Hudson financially over the difficult years.
JG: Business has its ups and downs. I think when you say decline, you’re talking about the peak years of our console business. At that time Hudson was 450 million dollar company. A lot of that was unbelievably was not through the customer but through NEC.
were getting such huge royalties on everything. It was all our stuff.
Every HuCard that was sold we got a royalty for. Brilliant move by Mr.
Kudo to attach himself to other companies. Companies that are much
bigger than Hudson. We’ve done it a number of times, with incredible
success. With Nintendo, with NEC, with NTT DoCoMo. So that’s a great
strategy. But overall, when you look at the companies that are able to
rise above the rest - how do you stay in business for 35 years? You
need to have that innovation. That is just a key driver.
Going back to creating new IP. A lot of companies don't want to take those bets. They think, "Hey, I know my game over here that I brought out 12 times is a money maker." And certainly Bomberman would be a good example of that. So stick with that. Of course you stick with that. But how else can you pump out new product? How else can you get consumers, and create the next IP. You have to gamble.
But sorry, I mixed up two questions there.
GS: I was asking about the decline of Hudson financially.
JG: Right - what really happened was we went from that high point to the Asian financial crisis. I don't if you know anything about that or remember it. The bank that broke Japan was Takushoku Bank, which is a Hokkaido-based bank. It was Hudson's sole bank at the time. And it was a very strong bank. It was one of the five major banks in Japan.
Well, strong but hiding many skeletons in the closet. There are books out, and if you are interested I can recommend some. It was a very interesting time in that the bubble had begun to burst. In fact it had burst a few years before that. I’m talking about the Japanese stock market and real estate bubble. All these bad loans became obvious, and good companies like Hudson were pulled into that because we have to take out loans to make games. Everybody does. You don't have a ton of cash that you are sitting on in most cases.
So those loans came calling when the bank fell. We had to have a stock offering at that time. They quickly organized that in the throes of the United States stock market crash in late 2000. Takushoku bank crashed in 1997 I think. By 2000 the government had been dealing with it enough to force solutions on everybody, and that’s what happened. We had an IPO, a successful IPO, of 50 million dollars that they raised for the company. That paid off all the loans.
Then, what happened was they needed more money in order to invest in new products. Because obviously we went through a couple of years of tight squeezing. Finish that problem, now what do we do? Then Konami came to the forefront and said “Yeah, we’ll invest in your company.” They made a very wise investment of another 50 million through which they purchased 46 percent of the company, I believe. That allowed us to invest in a lot more product and to get the company jump started again.
Since then, Konami invested more but because Konami are listed on the New York Stock Exchange, they needed to clear all the bad loans on the books. There was no money owed, but there are things because we are a private company. We had a building, and the building was never recognized. They had to recognize a lot of money that was on the books. They did that, about a year and half ago. They recognized about 70 million dollars. That came from all this owed debt plus everything that they had current on their books. They could write that off and take one big write off. So now the company is well positioned, healthy, profitable, and running strong. Every company is going to run through good and bad times. The key is to survive.
GS: It is actually kind of interesting that Konami was the one who helped, since they were not a huge PC Engine supporter.
JG: It’s true, they weren't. They did some games but not many.
GS: Ok, I guess I’ll ask some of my nerdy questions now. Such as, are there any internal Hudson or other titles that you know of for the PC Engine that didn't make it out?
JG: I get asked this question a lot. It's funny. It's been so long. I know there are some amazing forums that are on the net that talk about this. Jason, one of John's guys sometimes hooks me up. "Hey what about this, what about this?" The older you get the less memory you have.
I know there were a lot of games that I wanted to see. Including the real Kato and Ken. That broke my heart. That kind of game would have given the Turbo Grafx such a big word of mouth boost. It would have caused this little conspiracy that would have really sky rocketed the product. But they’re NEC and they didn't want to spoil their name by having people fart on each other.
I can’t really answer the question because I don’t remember enough. If I had a big list in front of me, I could point them out, but I think it’s been too long.
GS: Do you know what happened with Tengai Makyou for PC-FX, and why that never came to market?
JG: No idea really, but I can probably tell you it was over budget.
GS: Any comments about what happened with the PC-FX [which focused on anime and full motion video] in general?
JG: I think it was too expensive. It was more expensive, and I think NEC was a company who really wanted the business to be successful. They saw that as a chance, as Sony does now, to be in people’s home entertainment system. To be in front of all these kids and their entertainment so they’d purchase other NEC products when they grew up because they knew that when they were kids, their favorite machine was the PC Engine.
So I think that was the rationale behind NEC doing that. I think it was a good idea, but you have to have complete, total dedication to the gaming world, and I think that’s what they didn’t realize.
JL: It’s a real consistent pattern through gaming, even with Microsoft – if you don’t start off knowing gaming, you wind up making some bad moves before you succeed. Even Nokia, with their N-Gage system, after two of them they still didn’t quite get it right. It takes a couple of years, really.
JG: Yeah, Microsoft’s a good example, because look at the 180 turn, and how much they get this market now. And the reason they got it is because they put gamers in key positions. That’s how you do it. You don’t have finance guys doing your marketing, you have gamers, who actually understand the market and audience.