Japanese video game industry has suffered from general decline in world market shares since 2002. Many attribute the decline to the failure in producing culturally inclusive games that would succeed in western markets, would you agree with this view?  

It is actually way more complicated than just producing culturally inclusive games. When speaking of cultural inclusiveness, we often speak from a viewpoint of western culture and specifically North American and U.S. cultures. Oftentimes, U.S. Caucasian culture is easily distributed to worldwide markets so that there is nothing that smacks of another group’s culture — that is normalized culture. I think to say that Japanese game developers are not doing culturally inclusive games is a misnomer; the U.S. doesn’t do culturally inclusive games. However, we in the U.S. are very used to controlling international media and exporting our cultural goods without having to worry about it. 

I read often that there is concern that the Japanese game market is in decline. Even Japanese people talk about it. Keiji Inafune, designer of the successful game Mega Man in the late 1980s, infamously declared that the whole industry was dead in 2009. Now we have to start thinking seriously about that industry. We have in Japan a game industry that is a hardware provider. Japan continues to dominate hardware market. The Nintendo DS is the most successful global platform ever; it is followed by Sony Play Station 2, and Play Station 4 is out-selling X-box 1 at almost two to one. As a hardware provider, and that is the gateway of all games, Japanese companies still dominate the field. If you start looking at the games themselves, it becomes kind of fuzzy who owns the intellectual property rights and where those things exist. I read a report recently that the Japanese game market has just dropped by 13 percent in the last few years. But they were only looking at console games, not the hardware, not the mobile games, but specifically the console games. Worldwide, console games are dropping because mobile games are on the rise. Mobile games are doing very well in Japan and in global markets. I am not just referring to the 2012 heyday of mobile games; they are still solidly growing not only in their home market but also in the global market. I would push back against the general feelings that the Japanese games industry is in decline. I think Japanese game developers are concerned about the shifting media and shifting cultural landscapes. 

In terms of the recent games development in Japan, I would say the developers are both trying to absorb influence from western culture and maintain their unique Japanese features, as every country does. There is a recent article from Hiroaki Yura who successfully kick-started a game for project Phoenix—he comes out of a AAA development in which he was involved with the Diablo III and Soulcaliber IV; he also worked in the U.S. for Halo. He talked about the need for paying attention to global market. Inafune and him are good friends, according to Yura. He has a particular interest in work for the global market. However, if you look at the Japanese market, you will find it is dominated by Japanese developers. If you look at the mobile market, for example, 90 percent of the games that Japanese people play is developed by Japanese game developers. It’s the same with console games. Japanese people statistically support their home grown-developers and console providers at a way higher rate. That is a huge market even with an aging population; the sheer number of people living in Japan allows this to happen. Also in the mobile market, the high number of players who are willing to spend money — monetized customers — is way higher in Japan than in the U.S. Not only are they willing to spend money, they also spend at a higher ratio than players in other countries do. With this type of market size and practices in mind, Japanese game developers can always serve their home market, but they always have the desire to succeed in the global market as well. 

What do you think of the development philosophy of Shigeru Miyamoto, and Nintendo in general? They insist that no focus group is used, and instead the game developer would only focus on his own experience with the game? 

Miyamoto is interesting. He comes to Nintendo as an industrial designer and artist. In Nintendo, he helped by doing other designs and painting arcade cabinets. When they had a failed Radar Scope, he sought an opportunity to redesign that cabinet into a new game. This is how we got the Donkey Kong. The interesting thing about Miyamoto is that his design philosophy has changed over the years. Miyamoto is functionally apprenticed or mentored by Gunpei Yokoi who is famous for developing Game and Watch. They had a complicated relationship. Mentored by Gunpei Yokoi, Miyamoto understood that it is unnecessary to develop the newest system or hardware; instead, game developers should focus on the core experiences. On top of that, Miyamoto wanted to be a manga artist. He wanted to draw comic books for a living, and you can see that in Donkey Kong. Japan focuses on derivative culture, so Donkey Kong started in Miyamoto’s brain as an adaptation of a Popeye narrative. They can’t get the intellectual property rights for Popeye, so he created Donkey Kong. Forward from the success of his Donkey Kong, we can look at his Mario franchise and his Zelda franchise and begin to see his experience design becoming articulated on some level. Both of the franchises are exploration games. Part of Miyamoto’s allure is that he is very carefree and young at heart; whenever people talk about his early days, they talk about how he had long hair and how he played banjo. In fact, in early documents, he said that he sees these two exploration games that he developed as functionally the same game; except that one of them is for the joy of playground—Mario Brothers—and the other is about his love of exploring the forest and caves in his childhood in Sonobe, Japan — and that is Zelda. 

Even though he said that he didn’t use focus groups, he designs for broad audiences. Because he started as an arcade designer, he knows you are not only designing for the people who are playing, you are also designing for people who stand around and watch the game. It has to be fun for everyone, with a controller in hand or not. He mentioned how that idea influences his game development in talks that he gave at Game Developers Conferences and other professional events. At such events, he often takes pictures of people who are play-testing his games. Almost always, people are play-testing in pairs or in groups, hovering over single screen to watch it. In Miyamoto’s first GDC talk, he talked about wanting people to smile, and that is his goal. So while he is not bringing the focus group early on, he is bringing in people to test and to see if he is achieving his goal. If not, he is changing the game really quickly. 

The reason that I really appreciate Miyamoto as a designer is that he has such a strong foundation in experience design. As he becomes older and develops interests commiserate with people of his age group, such as music, gardening, and concern with healthcare, he always tries to take what brings him joy from his hobbies and translate it into the core experience of new games. For example, he had a dog and he enjoyed having the dog. Things that bring him joy are playing with his dog and talking to other people with dogs. Things that doesn’t bring him joy are cleaning up after the dog and having all these high-stake responsibilities. So you get Nintendogs, and it is all about these cute things that you get to do for the dog, and when it comes to cleaning up and walking the dog, if you don’t do that, it is not high-stake. Similarly, Pikmin is everything Miyamoto loved about gardening. Wii Music, which is considered one of his failures, is a failure not because of the software he developed but because of the structure of music that requires a lot of time to practice. Again it is about what brings you joy. Improvisation and messing around is what he is trying to translate into a game. That is why Miyamoto has staying power across the age spectrum — he is always looking at that core experience and how he is going to translate it. 

The phenomenal worldwide success of Pokémon Go boosted the share price of Nintendo for just a short while before it fell back to what it was trading before. How would you explain the nature of the game’s immense attraction and its marginal impact on the company’s market value? 

I think this is rather predicable. Pokémon started its trans-media empire in the mid 90s. Everything that launches does so in close successions to one another. So you get a flow of planned trans-media experience, including the games, the manga, the anime, and the card game. The Pokémon company is the only subsidiary company of Nintendo, which is shocking considering the huge I.P. Nintendo owns. It is now 20 years since Pokémon has been launched, a perfect time for nostalgia and reinvigoration. People who were children and loved Pokémon in the 90s are now parents of children who are at the age appropriate to love it now. That explains the massive nostalgia reinvigoration of this brand. Not that it needed reinvigoration; it has always been strong. However, it is useful to keep in mind that Pokémon Go is not a Nintendo-developed game. Nintendo owns its I.P. Pokémon Go is, in fact, developed by Niantic, who developed Google’s Ingress game. They had a successful launch of an augmented reality game and took a lot of what they learnt to develop Pokémon Go. It does well in putting the Pokémon into the real world in an augmented way. 

Pokémon Go is certainly bringing Nintendo a lot of money. I think it is on track to get Nintendo a billion dollar by the end of this year, not even its first full year. There is debate about whether or not they are mismanaging the game, and that it could be making more money. The truth is they are already monetizing this tremendous success, but monetizing for whom has been the real question. Nintendo stock saw a quick upsurge and then settled back down. This has really complicated reasons. One is that Nintendo doesn’t have a permanent relationship with the Niantic. Nintendo has a permanent relationship with another online mobile game publisher in Japan, DeNA. With DeNA they are developing games like Super Mario Run, a Fire Emblem-related game and an Animal-Crossing-related game that going into Nintendo’s I.P. But they are really slow on developing mobile technology. Pokémon Go is an anomaly. I was really surprised about what happened because Nintendo has always historically made its money from being a console provider and then getting proprietary gains from that console. The games are not cross-platform. For example, you can only play Mario and Zelda on a Nintendo console. Being a console provider means that everyone who makes games for that console pays Nintendo a set amount for every game sold on that console. This enables console providers to sell consoles at a price way below its cost. Niantic and Nintendo has a very iffy relationship. Now Nintendo just announced the launch of Nintendo Switch, which seems to be trying to compete with the same mobile market that it is also trying to break into. 

Could you elaborate on the launch of Nintendo Switch? How will it affect the mobile market? 
    
I am not sure how much new technologies will be applied to Nintendo Switch because we are all trying to speculating on Nintendo Switch right now. The entire Nintendo philosophy is lateral thinking with withered technology — the Yokoi philosophy. The idea is to take technology that is not cutting edge and think about how to make that cheaper technology support the type of experiences that you want to achieve. According to the videos and press releases of the Nintendo Switch, it looks like a Nintendo Wii pad integrated differently. There is a recent report of a number of patents that are related to Nintendo Switch that might help us guess the new features of the product, such as gyroscope, GPS, touchscreen, and image recognition. To me, the Nintendo Switch appears to be a much more sophisticated game pad from Nintendo Wii that will become both a console and a mobile device. What is innovative about it is that the mobile device will have a detachable controller. It solves one of the complaints about mobile devices that they are not comfortable to hold. It will allow for person-versus-person in play, which Nintendo DS already does, so it looks like it is adapting some of the strength of the DS. It also looks like the Switch is borrowing from the strength of tablet technology at a much larger screen level.  

People are excited about it. It is the first time Nintendo has launched something in a while. I don’t know how it will integrate into mobile market, and my inclination is that it won’t. Nintendo tends to choke input. I think what Nintendo is trying to do is creating a platform by which the users can access mobile games through this particular app. But the app is underdeveloped so far, and users can’t access the library of all possible apps.   

How does Japan’s aging population affect the video game industry?

In terms of statistics, a quarter of Japanese population is over 65 years old, which is a shockingly high number accompanied with low birth rate; this is considered national crisis. It affects the game design industry in small ways instead of big ways. There have been a number of games that were released, including some famous ones such as Brain Age, which aims at practicing computational skills, quick thinking, and reflective skills to keep brains young. The entire idea is about tracking how plastic and useful one’s brain is so that one can train one’s brain down. In many ways, if not designed for an elderly group, firmly it will be for their use. There are also companies specifically targeting the elderly market, especially with recent research about video games and brain plasticity, and video games and exercise. Wii and Wii Fit are not hardcore games that require mastery of controlling systems to achieve high scores; instead, they are casual games that are meant to scaffold you in taking control of your own body and your own brain. I think that is the biggest influence. Another influence is that certain arcades in Japan, not all of them, host days or nights specifically for people over 50 or 60 to bring them in. 

Japanese video game industry has also been criticized for slow development of new generations of games. What would you consider as the reasons behind its slow development?

It depends on how do we define slow development. I’ve seen similar development in Japan to the U.S. and the boom of indie gaming. It is the same case in Japan. Whether or not the Nintendo Switch is going to speed up development depends on the ways in which they have changed the Switch from the previous generations of Nintendo Wii. One of the difficulties that hardware and software development collaboration tends to run into is that hardware is developed anachronistically to paraphrase Ruggill and McAllister. It is built with current technologies to anticipate games that will be developed 7 to 10 years from now on. It is built with functionalities that people have not yet learnt to master. When the PS4 was launched, software developers were complaining constantly that developing on that platform was extremely difficult. The CEO of PlayStation of Sony explained that as hardware developers they had to develop a platform for future innovations. Again, not knowing what the Switch is going to be like and also not knowing how much old technology is incorporated in this new mold, I can’t predict how much it is going to speed up game development. My inclination is to say according to Nintendo’s previous development, they tend to be conservative on massive changes to hardware. Therefore, people who have developed on Nintendo Wii or Nintendo DS may not have as steep a learning curve for developing with this new hardware, and it may speed the development up. 

But again, the entire world is developing for the Nintendo platform, not only the Japanese companies. 

Many Japanese video game producers are investing in Virtual Reality technology. Is V.R. an opportunity for them to reclaim global market as they did when mobile games were introduced to the world? If so, how should they catch this opportunity and adapt to today’s global market?
    
The entire world seems to be moving into Virtual Reality and Augmented Reality technologies. Part of the reason is that V.R. technology has become cheaper and affordable in the consumer market. I think whether V.R. is going to reinvigorate Japan is not the right way to think about this. The Japanese game industry always compares its current performance with their heyday in the 1980s. The fact is there is just no way to recapture that. In the 1980s, America saw the arcade crash of 1983, and all the main console developers were Japanese, like Sega, Nintendo and eventually PlayStation. They got sole control of the market in this way. Their I.P. industry was much more developed at that time as well, and it was integrated with anime and manga industries. Historically, this is why I would say V.R. is not the way for Japan to recapture its global dominance. But that being said, Japan is much more advance in robotic technology and in other interactive media technology of which V.R. is of many forms. 

Their choice of developing V.R. is a good call, but I still don’t think it’s going to have a massive impact on the video game industry until V.R. comes down in price quite a bit. Even then, I don’t think it is going to reshape the industry radically. I am being conservative because we have seen a decrease in users of consoles and an increase of users in mobile devices; casual games are on the rise. Also if we look at the experiment with full motion input such as the Wii, there is some development, but people just prefer to sit with a controller in their hands. Those games didn’t do very well with one or two exceptions. That was meant to be a big revolution, and it didn’t work out as the developers expected. Now we think changing the way that we see the world is going to be the big revolution. Again, what will be the value added of seeing a Sony Vive mask versus just seeing it on the television. Until they overcome that value proposition, I don’t think there will be a massive revolution. 

Which companies in East Asia pose the greatest competitive threat to Japan’s video-game companies in general, and to Nintendo in particular?

China is already a massive player in the mobile market because of platforms such as Wechat and Weibo that allow for dissemination of games. It is already a strong market, but I don’t think it is going to be as big as the Japanese market at a global scale. Japan has a long history of integrated transmedia approach to games. Not only do they develop games, they also develop comic books and anime that narratively develop the games, centralizing and strengthening the I.P. of certain games. At other times, the comic books and anime can make a game. In addition to that, light novels are on the rise in translation abroad. All of these are centralized under Japanese government’s policy Cool Japan aiming to bring global investors into different aspects of the Japanese game industry and other Japanese cultural industries. I think this explains why Japan has had a strong foothold in the global market. 

The other thing to note is that the games are functionally two dimensional media. It is not about real human beings that look Asian. We are looking at characters that are without ethnic origin, which means that they look white. As a result, Japanese video games can be exported very easily as a “normalized culture”. If you compare Japanese video games with K-Pop, which includes Korean dramas and Korean music videos, you can find that despite equal popularity in East Asia, K-Pop has more difficulties in being exported unless the directors find foreign actors to join their production. But that is not overlapping into Korean video games or their animation industry. It is the same case with China. Where Korea and China are putting effort into their media and social texts is not as easy to export as the two-dimensional forms. China is celebrating their film industry, especially its fifth generation directors. 

Therefore, I don’t think I see this type of global competitor anytime soon, although home competition in Japan is strong and Asian competition is strong. 

How does the video games influence Japanese culture?

This kind of cultural influence is hard to definitively trace. It is definitely highly culturally significant. We know that video games have tremendous economic impact on Japan. Economically they are often collapsed in with our understanding of manga and anime. If you read reports from Japan External Trade Organization, oftentimes, you can see that all three industries of video games, comics, and anime will be discussed together as integrated industries. Aesthetically, they look very similar; narrative-wise and they often borrow from one another, but metaphorically, I find it very interesting when a comic book or an anime starts using the branching narrative that is the structure of visual story games as jokes. Japan has a great number of mobile technology users, and it is no surprise that Nintendo DS is the most successful console ever. Especially in Japan, people are on the train all the time, so they are playing games on mobile platforms all the time. It is hard to tease out how any media is affecting culture and how culture is shaping the media, for we know media is always an expression of culture and culture always cycles back and redefine culture in particular ways.