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What Japan's game industry needs

More effective business models and a bit more optimism about the Japanese game industry's future -- at TGS 2012, that's what the head of Japan's CESA trade body said the local industry needs going forward.
Shin Unozawa's opening keynote for Tokyo Game Show was called "What Japan's Game Industry Needs" -- and according to him, it needs more business models, and a bit more optimism about the future. Unozawa is EVP at Namco Bandai, and the new chairman of Japan's CESA (Computer Entertainment Suppliers Association) game industry trade body, which holds TGS. Much of Unozawa's presentation concentrated on the massive business shifts that are taking place not only in Japan, but around the world. "There's been a significant change taking place, especially in the last one or two years," he said, particularly with the rise of new game platforms and new business models such as free-to-play. Japanese game companies, just like Western companies, have been scrambling to adapt to an online marketplace, providing new kinds of players new ways to play, while trying not to alienate the core market. Unozawa highlighted how online sales for Electronic Arts in particular have continued to grow -- over the last few years, more and more of EA's total revenue comes from digital sales. In Japan, even though overall industry hardware and packaged software sales are gradually declining, total respective revenues for the major Japanese packaged goods companies have been holding steady, as they also increase emphasis on digital sales. Games like Fire Emblem on 3DS, Mobile Suit Gundam Battle Operation on PlayStation 3, and Phantasy Star Online 2 on PC and PS Vita have been attracting healthy sales of DLC and virtual items, according to Unozawa. He used those games as brief examples of how Japanese players are becoming increasingly comfortable with business models beyond the $60 physical package. "I understand they had a very good start up with this service, and they've been able to increase the number of subscribers," said Unozawa of Sega's PSO2. Sega charges for costumes and virtual item storage, but not for more powerful weapons, which is just one approach to digital sales. The discussion surrounding the Japanese video game industry -- particularly around the old guard of retail-focused publishers -- is often negative. Even prominent Japanese game creators criticize the domestic industry, which often appears to be losing its foothold in both business and creative areas. Unozawa wants to turn that negativity around. "We should not only be looking at packaged shipped for consoles, in order to get a true picture of the industry," he said. Once publishers will share more sales and metrics pertaining to their their digital titles, CESA will be able to show the Japanese game industry in a healthier light, he added. "We need to be able to show that the Japanese game industry is growing, not declining," Unozawa said. "...Japanese know-how should work fine in the global market, I think." Gamasutra is on-site at TGS 2012 -- keep an eye out for more reports this week.

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