Top Japanese game companies such as Sega, Capcom and Konami are reported to be drastically scaling back their releases of games for console platforms, whilst drastically scaling up their output of games for mobile phones and social networking services.
Sega has said its releases of console titles will drop from 66 in 2010 to 56 in 2011, whilst it will expand its releases of games for smartphones and social networking sites from 6 to 39.
Capcom is reducing its home console releases to 55 in fiscal 2011, down by 17 titles over the previous year. It too has announced a series of high profile SNS and mobile game releases.
Konami is keeping the number of its console releases stable, but has increased its social and smartphone game releases by 20 over the same time last year.
Square Enix also seems to be following a similar strategy, and has a distinctly unimpressive console line-up for 2011.
The (business) appeal of free to play games designed for casual users is succinctly described by the CEO of Electronic Arts:
At the end of , the digital business is bigger than the packaged goods business, full stop. No questions in my mind.
Then, you know, I think that we’ll find ways to even sell our packaged goods content in chunks and in pieces and subscriptions and micro-transactions.
Our highest ARPU (average revenue per user) are free-to-play games among paying users. You think about that and say, ‘how can a free game be the game they pay the most for?’
We have people who are giving us $5,000 in a month to play FIFA Ultimate Team. And it’s free. Dirty little secret.
In the face of such a huge number of imbecilic rubes shelling out vast sums for the crudest games seen for decades, it is no wonder they are keen for their share of the revenues.
However, unlike EA many of the major Japanese game companies seem to be having a great deal of difficulty keeping pace with the international gaming market – whereas EA and company appear to be hungrily entering a new market, the Japanese companies instead seem to be fleeing both their lack of success overseas and a shrinking domestic market.
Unfortunately, producing even fewer home console games and instead pinning their hopes on developing awful mobile and social games only seems likely to accelerate the atrophy of their remaining competitive strength, and the decline of the Japanese gaming market as a whole.