Interview: Namco Bandai's New U.S. Strategy

Following a round of U.S. layoffs at Namco Bandai, the American division is repositioning for a renewed focus on digital games, higher quality and better management of its release slate, company execs told Gamasutra in a recent interview. "There is a decline in the packaged goods business today," acknowledged Kenji Hisatsune, president and CEO of Namco Bandai Games America. "This is not only for the U.S., but globally we're starting to see this. And people are adopting digital distribution." "We see this as an opportunity, but at the same time, we do not discount our packaged business. I don't heartily believe that the packaged goods business will go away," he said. Namco Bandai Games America announced in August last year that it would merge with digital-focused Namco Networks in order to combine physical retail and digital businesses. The merger is indicative of the game industry's shift towards digital models. The new Namco Bandai Games America will increase its focus on digital distribution and online, while still maintaining a presence at physical retail. The packaged goods business may always be around to some extent, but there are recent examples at Namco Bandai of major retail games that failed to meet sales goals. In November, the well-reviewed Ninja Theory-developed game Enslaved: Odyssey to the West shipped 800,000 units during its first quarter instead of the 1 million-unit target, Dead to Rights: Retribution missed projections of 700,000, shipping just 350,000 and Clash of the Titans fell short with 250,000 shipped instead of the planned 700,000. Asked if Namco Bandai would aim to release fewer packaged games in light of recent shortfalls, Hisatsune replied, "I don't think so. We are in the business of creation, and we make every creation as our best. Some of them meet consumer expectations, some of them do not, unfortunately. But we are in the business of creation, and we'd like to continue to pursue [packaged games]." Hisatsune said that combining digital and packaged goods businesses presents "huge opportunities" to bring content to a wide variety of platforms. The company plans on enabling social connectivity in its games by providing cross-platform content and supplementing packaged goods with networked offerings, although the CEO wouldn't go into specifics. "Smarter" Release Schedule A game like Enslaved is just one example in the industry of a game that is of high quality (it has earned an 82 on Metacritic) but financially disappointing. Carlson Choi, VP and head of marketing for Namco Bandai Games America, said, "We're going to be focusing on quality games. ... [Enslaved] may not have met the financial performance we were expecting, but the game quality, it's an 80-plus rated game and has been nominated for six awards at DICE, which is exciting news. To me, those are the type of quality games we have to bring to the gamers on a consistent basis." But higher quality doesn't necessarily mean bigger sales. Choi said his company needs to reexamine when it launches games. "This past holiday season has been challenging. If you look at the data, if you look at 2010, there were almost 4500 console games in the business." "Ultimately, I think if you look at what we have to do on a global basis, it's to become smarter and more strategic as to where we land a game," he said. "...For us, in the future, one thing we're going to look at is how do we manage our slate, get it to the market at the right time, get it to the consumer early enough, and make sure fans get it in their hands early enough." For Namco Bandai, the most recent game that exemplifies the potential of the company's digital download strategy is Pac-Man CE DX. Choi said the game is a hit, although he did not reveal sales of the 93-rated game. "Those are the types of successes that we're going to be focusing on -- quality games on a consistent basis" that appeal to both core and mass markets, Choi said. Increasing Mass Market Appeal The recent merger of the two units not only means that Namco Bandai is reconfiguring the way it delivers games, but also the kinds of games it brings to audiences. Namco Networks was typically known for online and mobile titles aimed towards a more casual audience. This position was much different from Namco Bandai's packaged goods business, which has roots in core-focused arcade games like Splatterhouse and Tekken. "In the upcoming year you can expect to see a lot broader audience appeal as far as more casual titles being exposed to the different platforms," Choi said. "So definitely, that will be addressed in the upcoming slate that we'll be announcing in the upcoming weeks. That's a key thing for us." The publisher has also also released games on Facebook that leverage classic arcade properties like Dig Dug and Pac-Man as well as new properties like the social RPG Treasure Abyss. "Many Japanese companies are having some difficulties continuing to grow their audiences," Hisatsune said. "But at the same time, some [Japanese] titles are very well-received by a global audience. ... I think the sociability of the game itself is the largest challenge for those traditional game companies, where they appeal only to hardcore gamers." In early 2011, a renewed concentration on the mass market audience seems like Namco Bandai is late to the party, particularly with the success of 2006's Nintendo Wii and explosive growth of Facebook gaming in the past few years. But Choi suggested it's better late than never. "If you look at where we are, the company has had a lot of different tests and experiments to see what works and what's not working." he said. "Based on what we've seen over the course of last year, we're now making a very strategic decision about how we're going to manage our slate, specifically on the digital side." He added, "We are effectively now a real global organization, where each regional company is focusing more on how we publish the right game that is relevant to the market today."