There's a new powerhouse in Japan -- one whose market cap has now passed Nintendo's. Developer GungHo Online is earning well over $3 million dollars a day from the unbelievably huge smartphone match-3 hit, Puzzle & Dragons, which has driven the company's market value to over $15 billion.
But that's not all there is to the GungHo story. In addition to the internal studio that produced Puzzle & Dragons, the company owns venerable developer Game Arts (the Grandia series), MMO developer Gravity (Ragnarok Online), Acquire (Way of the Samurai series), and more recently, Grasshopper Manufacture, home of iconoclastic developer Goichi "SUDA51" Suda, director of No More Heroes and the upcoming Killer is Dead.
Recently, Gamasutra was able to sit down with GungHo president Kazuki Morishita and Suda to talk about this new partnership, the runaway success of Puzzle & Dragons, and Morishita's plans for his new U.S. subsidiary, GungHo America.
Why was GungHo interested in acquiring Grasshopper Manufacture, and why was GHM interested in being acquired by GungHo?
Goichi Suda: Initially, in Winter 2011, Grasshopper approached GungHo with this idea. Initially, there are two reasons why Grasshopper was interested. One of them is because GungHo's online strength and prowess. They've always done online games, which is something that Grasshopper wanted more input on. As well, I'd heard rumors and read interviews that Morishita-san had a big love for the game industry, and games in general.
So not just a president who cares about business, but one who cares about games.
GS: Exactly. Initially, we tried to meet in 2011, but because of schedule conflicts we couldn't meet. But the second time, I contacted him, and that was last October. By last November we were talking about my new game.
Kazuki Morishita: Initially when I heard this idea, I was ready to say no, because I really like Grasshopper's ideas and visual style and how independent they were. So I wanted them to keep doing what they were doing.
Also, I didn't want to overwhelm myself with the workload of managing, so I was originally going to say no. But we were talking about it, and we started drinking, and one thing led to another -- and more beers and sake -- and we started talking about what kind of games we wanted to make, and it just started making sense that we should be together.
Initially, I started a game company because I wanted to make good games. That's always going to be the same -- that's always going to be the principle that I go by. In terms of what GungHo is good at, pretty much we've been pretty inclined to do fantasy titles. Whether it's Ragnarok Online or our other titles, it's more fantasy-based or RPG-based.
Just seeing SUDA51's titles or ideas, I realized that these are ideas I would never come up with. So, I figured, put those two together and create a new original game, that's what I wanted to do -- create a game that was based off of Suda's world. I don't really do management, business-type stuff at work. A lot of people tell me to actually manage more, but I like to be on the creative, development side.
GS: I actually have a position within GungHo now where I can do the same thing -- focus on the creative side more. And I let the management people do admin stuff.
Goichi "SUDA51" Suda
Are you giving any input into other GungHo titles, or are you concentrating on only Grasshopper stuff from now on?
GS: Right now it's only Grasshopper.
KM: So as GungHo, we already have studios like Game Arts and GungHo, which we've sort of merged together, and which are working on the same kinds of titles. But I already have about 13 titles that I'm working on, on the development phase. As I mentioned earlier, I don't want to overwhelm myself with the additional work. So in terms of Grasshopper titles, I know that Suda-san knows best what he wants to do, and I'm letting him do that. I just wanted to work together on titles, not just manage everything that Grasshopper does.
So in terms of Game Arts, I'm also president of Game Arts as well. [Morishita hands me a Game Arts business card, in addition to the GungHo card he proffered prior to the interview.] Everything that Game Arts and GungHo do, I manage that part.
So does GungHo just count as the management/publisher side of it, and the studios like Gravity and Game Arts operate as studios?
KM: Not just Game Arts and Gravity and others, but GungHo has its own studios, such as Puzzle & Dragons Studio.
Puzzle & Dragons is so successful that it's kind of ridiculous. You talk about being interested in doing creative things. You talk about that you're more or a creative guy and less of a business guy. What do you do with that success? What would you like to see your company do with these resources?
KM: In terms of how I run my part of the business -- basically I have two ways that I work on the creative side. Either I have an idea and I talk to the dev team, and we work together, or I throw an idea out at the dev team and let them come up with the actual concept and ideas and I work together with them. For Puzzle & Dragons, it was the latter, where I gave them an idea and they worked on it together and they came back with Puzzle & Dragons.
In terms of business model, that's what we're going to continue doing. That's not really going to change -- that's how they handle their work and that's how we're going to work on new titles. We're not going to focus on one platform, for example, and we're going to be multiplatform continuously.
What is your ambition for GungHo? Ultimately, is it right now the company you want it to be, and if not, how would you like to see it change?
KM: We would like in the future, worldwide-wise, we want people from all over the world to play our games and enjoy our games, and that's pretty much our main goal moving forward. In terms of how to do that -- in terms of strategy? We go back to the basic principle, which is just, make the game fun for everybody. Honestly, that's the only thing I think about: how to make games that are fun.
You've worked with a variety of publishers over the years, and had to do work-for-hire projects like anime-licensed games. Having this partnership, does it take the pressure off of Grasshopper? Can you do what you want now and not worry about the pressure about finding partnerships?
GS: In terms of Grasshopper's standpoint, it does definitely help with our creative freedom. We have more time, and we'll be able to focus on the creative side. Up until now, working with other publishers was just short-term. Now that we're able to work long-term, it connects all the dots in terms of business strategy.
We can also go into the expertise GungHo has, which is doing offline events, and having online features in games -- that's something that we'll definitely get advice from them on, and it's actually broadened our horizons a lot.
A GungHo-run fan event
EA seemed like it was going to be a really good partner for Grasshopper, with Shadows of the Damned, and then that game sold like crap in America. Do you know why? Can you talk about it?
GS: In terms of creating a product, I think Grasshopper did our best. We were definitely confident in the quality of the game. As Morishita-san usually says, it has a lot to do with luck. At the end of the day, whether a game sells or not is based off of luck.
KM: In terms of luck, to elaborate a little bit, SUDA51 did his best and gave it his all -- 100 percent -- to create a game, and it didn't sell, and he was unlucky. The same on the flipside -- if he had done his best and the game sold, that's also based on luck, too. It's just good luck.
Really? It's interesting to have that philosophy because, I don't think a lot of people believe it's purely down to luck. I'm not sure I do, either. Things like marketing support and having a publisher that understands you are important too.
KM: That's exactly what I mean by doing 100 percent. Not just on the creative side -- being together with a publisher that understands you and your product, and being able to work together, and doing a marketing push -- it's 100 percent marketing push and 100 percent brand recognition. If they're able to do that, then, that's the 100 percent that I'm talking about, giving everybody's all. So from then on, if it sells, it's based on luck.
I think EA did a zero percent marketing push on that game.
GS: If you are lucky, then a game like Lollipop Chainsaw actually did well. So that's also based on luck.
I know that Killer is Dead is coming from XSEED, but moving forward, will Grasshopper's games be coming from GungHo?
KM: In terms of releasing titles in the U.S., as the GungHo brand, it's probably better if GungHo America does everything, but it's not necessarily excluded. If there's a better partnership that we can come up with, and everybody is in agreement, then that's another way to go. So we're not really focusing on GungHo America releasing everything that GungHo [Japan] releases. It's going to be a case-by-case basis.
Do you have ambitions to grow into a big publisher in the U.S., and would you consider releasing games from other companies that are not under the GungHo umbrella in Japan?
KM: In terms of GungHo U.S., definitely. One of the biggest reasons that GungHo America needed to happen is because GungHo's development style makes scheduling nonexistent, when we come up with new ideas and new concepts. We do not go by a strict schedule. In terms of just running the business ourselves, we are going to need cash flow.
In terms of how we do schedule things on the development phase -- we do have a schedule. It's just that there could be feature changes, or whatnot, and in my head, I have a guesstimate of how long it'll take. It's not that we don't have a schedule -- we do have a basic schedule, it's just not set in stone, exactly.
I think that Japanese games need a booster right now in the West -- someone needs to put them forward more and give them the attention they deserve. But over the course of this generation, Japanese developers' reputations suffered with gamers.
KM: Let's say that Japanese games are in their darkest times right now. There's no way to go but up, if that's the case. In terms of making games, I think Japanese developers need to go back to basics about why they make games in the first place, which is to make good games. At GungHo, that's what we do. We think about games and come up with good ideas and do our best to make it as best as possible, and all we'll do is keep doing that. Sooner or later, that'll pay off.
We also take on outsourcing as well, and awhile back we worked on a Nintendo title, Super Smash Bros. Brawl. Which as you know sold 10 million worldwide, and it was a big hit. When we were able to work with Nintendo, that's when we realized what Nintendo does best is make good games as well, and that's something we'd like to do as well, with GungHo's titles.
A lot of companies in the social or mobile space, if they had a hit like Puzzle & Dragons, they'd be dropping everything and chasing the next hit, and you can see the effect this has on companies, where they just stumble repeatedly.
I know you must have in mind that you could do this again, but it doesn't seem like you're going to just chase that single-mindedly. Can you tell me why? It doesn't seem like it's your top priority to make the next Puzzle & Dragons.
KM: I don't want to make the same thing twice. If an idea popped into somebody's head that could be Puzzle & Dragons 2, well, definitely we'd work with it if it were a good concept. But until then, it doesn't make sense to just pursue that brand name because it's a big hit, if we don't have any good ideas.
In terms of the game itself, we always try to be innovative, and come up with something new. So Puzzle & Dragons has already been released and people know about it, so it doesn't make any sense to make something that's only slightly different. I'd like to make a game that a lot of people haven't seen before, a new concept with new ideas.
Exactly as I mentioned, if an idea does come for Puzzle & Dragons 2, and we love it, and we all think it's a good idea, and that people will enjoy it, then we'll work on that too.
The producer, Daisuke Yamamoto, actually already mentioned, "I'm sick of Puzzle & Dragons. I want to work on something new." I said, "Yeah, sure, if you want."