Many Japanese developers are struggling to keep up with the big numbers drawn in by western games. This isn't as much speculation, as it is fact. Outside of Nintendo, Square Enix, and Platinum Games (and a few select others), it's difficult to really pin down a developer that's been a hit overseas which Japan can directly claim. But the reasons behind these failures are not hard to identify. In fact, it can all be summed up in one pretty simple question: Where are the new IP's?
The fact of the matter is that franchises simply last far too long in Japan. Sometimes for good reason, sometimes out of (what seems to be) a desperate last-ditch effort for more money. Developers must see long-standing icons such as Mario and Solid Snake, thinking that the main goal should be to create a character that can be milked for generations. The fact of the matter is that sort of strategy really doesn't apply to everything, and is especially irrelevant when it comes to the rest of the gaming world. Few gamers want to see the same characters used over and over again, most just want a better product.
The Dynasty Warriors series is a prime example, changing very little between each iteration (up until Strikeforce), with a slew of expansions that release with every title. Why bother playing Dynasty Warriors 6 when everyone knows that DW 6 Empires will be a more updated version that will release a short while after? Not to mention that the changes from 5 to 6 were marginal at best, there's very little incentive to go and purchase the game aside from 'seeing whats new.' This isn't just a problem with the series game design, but with much of the industry. This same faulty logic can be applied to the Disgaea series which, while loveable, doesn't really alter much from game to game. Even titles like Pokémon wind up meeting some tough criticism (from adult players), mainly complaining that very little is different from game to game.
Which brings up the next point: why all the RPGs? There's nothing wrong with the genre really, turn based or otherwise, but it seems like Japan has been scared to move away from the subject for quite some time. Capcom regularly takes a stab out there with some TPS, action, and fighting games. Then of course there's Kojima's Metal Gear and Platinum Games' Bayonetta, but beyond that there's very far and few in between. It feels like the industry is too afraid to expand into other genres, regardless of the fact that whenever a developer does that game generally turns into a hit. Katamari Damacy was a great example of this, as was Fatal Frame. Though both titles would wind up spawning additional games that would hold a little less critical acclaim, the point is that risk very often pays well for developers.
In fact, that's almost the most frustrating part of this entire scenario. There are very few circumstances that a new IP hasn't become at least a cult classic of some sort. Shadow of the Colossus, Demon's Souls, Zone of the Enders, are just a few games that have become legendary in some respect. Yet for some reason Japanese developers continue to hope that remakes and niche games will sell. Nippon Ichi the most recent victim of this, cancelling three projects after showing a 97.5 percent operating profit loss at the very start of 2010's financial year. The result? They start up a new game that skims as close to fetish-oriented girl spanking as possible, in hopes that it will draw in the cash. The entire situation probably could have been avoided if they'd taken the time to update graphics in Disgaea 3, increase their localization attempts to multiple consoles, or maybe even advertise a little. Instead they're now preaching to a crowd of gamers that will most definitely be local to Japan, completely alienating the rest of the world as a market.
The combination of not knowing where to take current brands, and being too hesitant to develop new ones is killing Japanese gaming. As older, more longstanding series such as Final Fantasy try and figure out what direction to take, younger ones are simply floundering with their inability to catch up with big-budget titles. This isn't to say that developers should look for ways to get Love Plus over to North America, but rather if Japanese developers are looking to make more money on a global scale they're going to have to do their homework on what the rest of the world is enjoying. Metal Gear Solid is a series that's enjoyed universal acclaim due to its mix of fantastic storytelling and enjoyable mechanics, but titles don't need to be that complex. At a very basic level there's enough differences between all the Metal Gear titles that they're individually worth looking into, and that's what makes them so interesting.
Check in later this week where we go into a little more detail about why Japan's current set of heroes should take a small break, what Western developers they should be taking advice from, and how a recovery in the Japanese gaming industry would improve gaming standards as a whole.