Recent financial statements from Japanese-headquartered game publisher and developer Atlus have revealed relatively disappointing results for the company's Japanese division. The company endured plummeting profits, and sales targets on some PS2 and GBA titles were not being met. In fact, according to reports from 2005, the company was forced to lay off ten percent of its workforce and cancel development on certain titles at its Atlus operations in Tokyo, Japan.
Overseas at Atlus USA, however, operations have been quite different. According to an interview with Jim Ireton, Atlus USA's VP of sales, and a twenty-year veteran of the video game industry, Atlus' North American division has been faring much better, thanks to its importing of a number of in some cases quirky Japanese and Korean titles that have found a market among Japanese-friendly American gamers.
Gamasutra's conversation with Atlus occurred last Friday, a major day for the Japanese subsidiary located in Irvine, California. Not only had Atlus USA launched a complete re-design of its website and online store, but it also announced a new RPG title, Yggdra Union for the GBA. The company is also finishing up localization on Steambot Chronicles and Metal Saga for the PS2, which will land on store shelves this May and April respectively.
According to Ireton, Atlus USA's North American sales were up 75% in 2005 alone, in part due to sales of Trauma Center: Under The Knife and Magna Carta. Nintendo of Europe noticed the attention Trauma Center was getting and has licensed it as a first-party title from Atlus with plans to distribute it in five European territories this spring.
|Trauma Center: Under The Knife|
Atlus USA has been met with criticism by some in the game-playing community, accusing the company of pressing its titles in limited quantities and making them difficult to find after a few months. Ireton addresses this criticism and tells Gamasutra why a new partnership is making sure gamers get to try some of their older titles without having to look in the used game bin or on Ebay.
GS: Atlus USA has just launched a complete re-design of its website and online store. What prompted the re-design?
Well, a couple things. If you had seen on our old website, it was tired. We had so many things going on. We wanted to bring this website hopefully up to the 2006 level, and make it a little more interactive and clearly more educational towards our fan base. We spent a long time putting this together.
GS: Atlus USA has just announced that it will be publishing Yggdra Union for the GBA this autumn. Yggdra Union is from Japanese developer Sting, the same team that brought gamers Riviera : The Promised Land . What prompted Atlus USA to acquire Yggdra Union?
We are predominately a role-play type company. We were so successful with Riviera, we were so pleased with working with Sting that it was just natural for us to bring this to the marketplace.
GS: Trauma Center: Under the Knife for the Nintendo DS is a title that has gotten a lot of positive attention, both from the press and game players alike. How have sales and consumer reception been for Trauma Center in its four months on the market?
Sales have been absolutely fabulous. Nintendo of Europe will be taking this as a first-party title in five countries in Europe.
GS: Can Trauma Center fans expect to see a sequel for the DS?
(Laughs) This is the video game industry! I can't answer that. When has a great game never had a sequel in the video game industry? I really have no idea at this point.
GS: What have been Atlus USA's other best-selling titles during 2005?
We just came off a record year. Our sales were up 75% last year, on top of that, we were up 42% the year before. It's kind of fun to come off of just an outstanding year.
Our flagship product in Japan is Shin Megami Tensei. We had two titles, Digital Devil Saga 1 and 2, both were award-winning, those two did absolutely fabulous this past year.
We started the year off with Atelier Iris: Eternal Mana last May - that did very well. Again, Riviera did extremely well and Trauma Center was just off the charts.
GS: In regards to Trauma Center, it's a completely different type of game. Has Atlus been overwhelmed by its popularity? Was it unexpected?
Think back to fifteen years ago. We were mostly a specialized RPG type of company. We've expanded and now we're in what I would call three business segments. We still have our traditional RPGs, we've grown into more mainstream RPGs with Magna Carta, and we're continuing to expand in a unique category.
Over the years we've done Snowboard Kids, Super Dodge Ball, Trauma Center – we always try something that's a little out of the box, and you'll see more of that from us this year.
GS: What can consumers look forward to this year from Atlus USA?
You'll look forward to a lot more of what we do best: RPGs.
You'll see some expansion of the mainstream RPGs ala Magna Carta, and you'll see a continuation of more unique stylized games. Unfortunately, it's too early to announce the titles – some we'll announce at the end of this month but most will be announced at the E3 show.
GS: So a sequel to Magna Carta is on the way?
Could be - Magna Carta was next to Trauma Center as our second biggest title. It's an absolutely gorgeous title from a South Korean developer.
We haven't announced it and I'm not announcing it here. I want to specify how good Magna Carta did, and how Atlus as a company is growing from a hardcore RPG company. We really have expanded our marketplace, yet we're still keeping the core Atlus business.
GS: Let's talk about Steambot Chronicles and Metal Saga for a moment, both of which are slated for release this spring on the PS2. How has the localization process been for both titles?
Steambot is on track for a May release and we'll hit the date, we're actually ahead of schedule on Steambot. It's looking good, we're getting incredible and positive reactions from the early reviews. Metal Saga is also on track and shipping early April.
|Magna Carta: Tears of Blood|
GS: I'd like to ask you about the reorganization that Atlus Japan has taken. According to reports from Japan , profits were down due to rising development and marketing costs and low sales of several PS2 games and GBA games. Atlus Japan had to reportedly cancel a number of games.
How has this reorganization affected operations at Atlus USA ?
I can't speak for Japan, but I can tell you that there have been no changes here.
I've mentioned our sales growth for the past two years. We're a fifteen-year old company, a very mature company and we're looking for a 20% to 30% increase in 2006. It has not affected us at all.
GS: Can you mention any of the titles that had to be cancelled?
We've cancelled zero titles from our standpoint here at Atlus USA.
GS: Atlus USA has always featured games on the market that feature anime/manga character designs. In terms of marketing, does Atlus USA aim their games to the same consumers who purchase anime and manga?
That's a good question. Our marketing campaign is really, to make it simple, a three-fold campaign. We do the traditional print campaign, we do a lot with our retail partners.
Probably our biggest marketing campaign is through our gamers. When they see an Atlus game they expect an incredible translation, they expect a look, and depending on the game, whether it's dark or funny, it goes back to the translation. When it's good, the word of mouth for our games is unbelievable.
A good example is Riviera, we've sold Riviera a year after launch, and the game just kept on going and going. Most games don't last a year at full price.
GS: Have other publishers expressed interest in licensing Atlus USA titles and bringing them to consumers in other international territories?
Yes, actually. Snowboard Kids will be distributed in Europe . We constantly speak with companies about publishing our titles in the European market.
GS: How does Atlus USA go about establishing and maintaining prosperous partnerships with its Japanese developers?
You can't just take a Japanese game and just translate it into English. You've got to take it, you have to bring in the humor, you've got to have the lingo the kids want, and you've got to have the story. That's what we do so well and we're so well known for – our ability to translate.
Other Japanese companies have tried it, and it's not as easy as you would think. I think that's what we do. We also have a very large installed base that knows Atlus games. It boils down to: "Do we deliver?" and I think we do.
GS: Atlus USA published Magna Carta this past autumn from South Korean developer SoftMax in association with Japan's Banpresto. Was this Atlus USA 's first game from a South Korean developer?
That was the first one developed in South Korea for us. You will be seeing more games from Atlus from South Korea. We're very pleased with the work they did.
GS: Were there any challenges of localizing and marketing this South Korean game versus a traditional Japanese game?
The challenges were working with communication. We have a very talented gentleman in Japan who was able to handle that for us. There is of course the time lag between the different countries. In translating the game, there were no challenges. The story and artwork – the artist was just incredible.
GS: PC gaming truly dominates the South Korean market. How does Atlus USA feel about the state of the North American PC market and if its RPG product line could be ported to the PC?
We constantly evaluate that and I'm very intrigued by what I'm seeing in both South Korea and China.
|Riviera: The Promised Land|
GS: Has online gaming been an area that Atlus USA would like to be a part of in terms of subscription-based role-play games? Has there been kind of a wait-and-see attitude towards this kind of gaming?
I think there have been a number of companies that have gotten in-and-out of that particular business. We've been monitoring this for several years, we're also watching the different pricing models. Overseas, the pricing model is totally different than the U.S.A., so we're just studying the model at this point.
GS: Atlus USA has been criticized for publishing short runs of its best titles. Many customers have reported having trouble finding certain Atlus USA titles on store shelves a few months after release. This issue has even made it so far as to even be included on the Atlus USA entry on Wikipedia. How does Atlus USA respond to such criticism from its customers?
I suppose you could look at it as criticism. On the other hand you could look at as taking care of the marketplace and taking care of the Atlus customers. Atlus products, even to this date, maintain original retail or more, instead of flooding the marketplace and our customers waiting eight to ten weeks to buy it at $19.99.
We've been able to develop a business plan where we bring, what I would call, almost the right amount of product into the marketplace, and feed the market as needed.
An Atlus customer will buy our product as quickly as they can knowing a couple things: One, is the quality. Two, is that the product will hold its value, and third, knowing that the product probably won't be there in six months. That's a strategy I like. We may be a little short but we're also taking care of our customers.
GS: It has now been revealed on the SiliconEra blog that a southern California company called GameQuest Direct has been re-pressing some of Atlus USA's older titles. Can you discuss Atlus USA 's relationship with GameQuest Direct?
GameQuest Direct is a good company. They focus mostly on online business. They brought in a limited quantity of a couple older titles that no way impacted the value of our product. We're bringing in a lot more into the marketplace because we have a lot more Atlus USA customers. What GameQuest did, in a very limited way, was satisfy a fraction of those new customers with a couple of good older titles.
GS: A lot of customers aren't entirely aware in the specific risks involved in going forth with more and more pressings when a title sells out.
If they go to any of their local stores and they see the number of titles going for $19.99, if they only knew how painful that was for the publishers.
GS: Atlus USA has primarily focused its attention on the PS2. How does Atlus USA feel about transitioning to the next-generation of consoles?
We're clearly looking at all next-generation systems. Having personally been in the business for twenty years, transition is life.
When the new systems come out, the old systems still have an amazing installed base. Whether it's GBA, whether it's PS2, you have to look at the percentage game.
I'll use Xbox 360 as an example; it still hasn't done all that well in Japan. The numbers here in the USA still aren't even at three million, (whichever Microsoft is aiming at in terms of installed base – three or four million).
For a company like Atlus USA, whose specialty is niche-RPGs, you just take the percentages. When the percentages turn into a number, then we can financially afford to bring a title in.
GS: There are a lot of highly publicized RPGs in development for the Xbox 360 in Japan. Do you think that these RPGs will help Xbox 360 sales in Japan?
I wish I knew the answer to that. I hope the 360 does well in Japan, it desperately needs good titles, it's a great machine. I know there are a lot of good things coming.
GS: Can you shed any light on what titles Atlus USA will be able to showcase at E3 this summer and will there be any surprise announcements expected?
I know exactly what we're going to showcase but I can't tell you. You're going to see quite a bit and you're going to want to be there.