Video game articles thread

[fatty]

Instead of creating a new thread each time I see an interesting story I'd figure I would just keep them in one thread.

Why Xbox failed in Japan (Part 1 of 2)
The inside story on Microsoft's greatest ever challenge.
By Wesley Yin-Poole Published Friday, 14 December 2012

Bill Gates was preparing to walk out on stage to deliver his much-anticipated keynote at the Tokyo Game Show on Friday 30th March 2001. The Makuhari Exhibition Hall was packed with a 4000-strong audience. Executives from all the major Japanese game publishers were there: Capcom, Square, Tecmo, Sega, Namco, the lot. Press had gathered from all over the world, and they were all there to see one thing: the Xbox.

Backstage, Gates turned to Kevin Bachus, at the time Xbox director of third party relations and the man charged with getting all those Japanese executives out there in the audience to make games for Microsoft's new console. “Here, hold this,” Gates said, pulling out his wallet. “I don't like having anything in my pocket when I'm talking.”

Suddenly, Bachus was holding the wallet of the richest man in the world. It felt thin, as if only a credit card and a driver's license were inside. “I was terrified to even open it,” he remembers over a decade later. “But of course that's all you need when you're a billionaire right?”

Gates' star turn at the Tokyo Game Show was supposed to show the Japanese game industry that Microsoft was serious about getting into the console business. Gates, one of the most famous people in the world, one of the most respected businessmen ever, had taken the time to make sure Japan felt important.

But all didn't go according to plan.

Bill Gates on stage with Sega executives announcing its 11 game deal for Xbox at TGS Spring 2001.

Gates spoke eloquently about the importance of the Japanese game industry, of his reverence of Isao Okawa, the former president of Sega who had died two weeks before the show after a battle with cancer. Okawa was a "great man who accomplished many things" Gates said. The Japanese, wearing headsets pumping out frantic translations, listened intently and respectfully, as the Japanese do. But when Gates started talking about the Xbox his keynote turned from insightful industry analysis into a sales pitch.

Gates announced Sega would design eleven games for the Xbox, including Panzer Dragoon, Jet Grind Radio Future, Sega GT 2 and Gun Valkyrie. He announced the Xbox controller S, a slightly smaller version of the reviled controller that would come with US and European launch units, with the buttons positioned to best accommodate styles of gameplay popular in Japan. And he announced Microsoft's Xbox Japan division, run by former Sony game development chief Toshiyuki Miyata, set up to make Japanese games for Xbox to appeal to Japanese gamers and to sign Japanese games made by Japanese publishers.

Miyata previewed Xbox games with videos and demos - Azurik: Rise of Perathia, Amped: Freestyle Snowboarding, NFL Fever 2002 and Halo, which would all launch in Japan. Konami's Air Force Delta 2 and Tecmo's recently confirmed Dead or Alive 3 were shown to highlight the support from Japanese publishers. Gates spoke of the console's 8GB hard drive, saying, "people still underestimate the difference it will make”.

"In the Japanese market feedback is naturally different from the United States," Gates said. How right he was.


Xbox Japan marketing during TGS Spring 2001. The poster shows Bill Gates holding a burger and the new smaller Xbox pad.

John Greiner is president of MonkeyPaw, a Californian company that localises obscure Japanese games for release in the west, primarily on the PlayStation Store. But before starting that company the 20-year game industry veteran was president of Hudson Entertainment. He's lived in Japan for years, working with the Japanese, understanding their culture.

We meet just outside one of the restaurants inside the expansive Makuhari Messe as Tokyo Game Show 2012 kicks into life. A high-pitched screech is on loop, part of the promotional video for the show that bursts out of hidden speakers. “This is my office,” he says as we set to down to chat.

“Put it this way, CESA, the organiser of these big events, they were pissed because of his speech and what he said,” Greiner remembers. “That turned a lot of developers and publishers away. They had a speech they vetted, and then when he gave the speech it wasn't the same speech. There were parts that were different. He was supposed to be talking about the industry but he was really just plugging the Xbox. Of course! That's America.

“That was a big deal, and people were pissed. The whole Xbox introduction into the Japanese market was not done correctly. They lost the faith of the people who they really needed.”

From Microsoft and Bill Gates' point of view, the keynote speech was appropriate. It was exactly the kind of thing they were used to doing at shows in the US: the Game Developers Conference, the Consumer Electronics Show, E3. But for the Japanese it came across as a PR-driven plug.

“I'm not saying they went out of bounds,” Greiner says. “But it was a bad start.”

Bachus seems taken aback when I suggest the speech didn't go down well. “People liked it,” he says. “It sounds a little arrogant, but from their perspective and from my perspective as a guy who had been in the game industry my whole career, I thought it was validating to have someone like Bill Gates go to the Tokyo Game Show and show that commitment. That was a really big deal and I really enjoyed that.

“The expectation was we were coming to ask the Japanese industry one last time to support us and to explain why and to give the same kind of thing you see Sony or Nintendo give at E3, which is, here it is and this is what we're doing.

“Because they didn't really do that at TGS at the time, there were questions like, 'well do this but could you please keep it relatively non-denominational and sort of give philosophy?' For whatever reason, that message wasn't communicated properly.

“Look, you know from dealing with the game industry, you put ten guys in a room and you get twelve opinions. I didn't have the impression after that presentation that people were upset. There were certainly, I'm sure, some people who felt we were being typical western barbarians coming in and unsubtly pimping our product out, but Bill thought that was what he was there for.

“The speech was absolutely appropriate to an E3, to an ECTS, to a GDC. But because there had been some expectations set and because we were being given this opportunity to give a keynote, I'm sure that may have rubbed some people the wrong way. But that had no impact on our relationships. In fact, we heard a lot more positive about the fact Bill came and spoke and spoke eloquently about the game industry and how important Japan was.

“You can't please everybody all of the time.”

Gears in motion

Microsoft's Xbox adventure in Japan began years before Bill Gates' 2001 keynote speech. When the Xbox was being created in Redmond, Bachus and Seamus Blackley, the two Xbox co-creators who spent the most time in Japan, always knew the market would be a challenge. At the turn of the century Japan dominated the console games industry with a whopping thirty per cent of the market. The Sega Dreamcast, which hadn't performed well, was made by a Japanese company. Sony's PlayStation 2, which had performed wonderfully, was made by a Japanese company. And the Nintendo GameCube, also made by a Japanese company, was fast approaching.

“We were basically going to play in Sony, Sega and Nintendo's home stadium,” Bachus says. “As a result, Seamus and I and other people from the team put a disproportionate amount of effort into trying to make Xbox attractive in Japan, but there were a bunch of things that were lined up against us.”

Kevin Bachus and Seamus Blackley toured Tokyo with a prototype Xbox. It was taken to Sony Computer Entertainment's building.
The Xbox was so named because of its ties to PC gaming - unsurprising, really, given the company behind it. It was built based on familiar PC gaming development processes and tools and technologies. It came with a hard drive, would facilitate patches and would connect to the internet. All wonderful, forward-thinking additions to the console landscape sure to please western developers.

Unfortunately in Japan there was no such thing as PC gaming. The likes of Konami, Namco and Capcom were console developers. On top of that, Microsoft faced a perception issue. Most Japanese publishers of the time thought the Xbox as a console for American games that most Japanese gamers wouldn't find interesting.

“So even before we lifted a finger there was a perception among game companies and consumers that this was a console made for other countries, and even though it might be available in Japan it really wasn't for them,” Bachus says.

But, in truth, Microsoft didn't help itself when it came to Japan. Some of the decisions it made while designing the Xbox made some of the Japanese games community scratch their heads.

The Xbox was a beast of a games console, heavy, bulky and devoid of subtlety. It was made out of inexpensive black plastic with a controller seemingly made for hands the size of those pointing finger gloves you see at baseball games. It was everything the Japanese thought an American-made games console would be.

“We thought it would be more like what PlayStation 3 looks like now, something sleek and sexy,” Bachus says. “For a number of reasons, mostly related to cost, but also partly related to thermodynamics of engineering the box - air flow and the size of components - we just weren't able to do that. The Japanese looked at that and it reinforced the notion this didn't have a Japanese aesthetic. This was a console that was for western gamers and was being made available in Japan.”

Microsoft's Xbox team received all sorts of feedback from Japan. Ed Fries, then vice president of Microsoft Game Studios and one of the co-creators of Xbox, remembers being confused by the advice he was given. An earlier PC game Microsoft had brought to Japan had a main character with only a few fingers, and Microsoft was told that was a taboo because it had a connection to the Yakuza cutting fingers off.

When it came to the Xbox, the befuddling feedback continued. “We were told we couldn't call it the Xbox because X is the letter of death,” Fries remembers. “We were told we couldn't make it black because black is the colour of death. I was like, isn't the PlayStation black? Rules that apply to you as an outsider don't necessarily apply to insider products.”

Fries was told he couldn't release Halo the way it was in Japan because Japanese players wouldn't be able to deal with the dual sticks. “So we ended up having to make a bunch of modifications for Japanese players and dumb the game down, make an easier version.”

Most of the Japanese backlash to the recently unveiled Xbox revolved around the controller. The “controller débâcle”, as Bachus remembers it now, was the result of two competing factions within the Xbox development team. Microsoft's chief technology officer J Allard and [Xbox software boss] Cam Ferroni wanted to build the ultimate game controller that had everything the team liked about its rivals: the expansion port from the Dreamcast, the two thumbsticks from the PlayStation DualShock and six buttons, which was great for playing fighting games on the Sega Mega Drive.

Microsoft's hardware technicians wrapped plastic around those features and came up with the original Xbox controller design, codenamed Duke. Testing showed it didn't cause much of, if any, muscle stress in the hand. Blackley and Bachus and celebrated programmer Mike Abrash thought it was enormous, and felt everyone else would too.

The Japanese “flipped out”, Bachus says. “They said, 'obviously this is going to fail. Nobody is going to buy this.' Then they started rethinking their commitments to the platform. They said, 'this combined with the enormous giant console says you really don't intend for this to be successful in Japan.'"

“We were told the controller had to have the weight of water,” Fries recalls. In a panic Blackley and Bachus triggered a crash program to develop what would become the Controller S. Its codename was Akebono, after the US-born sumo wrestler Akebono Tarō, the first non-Japanese born wrestler ever to reach yokozuna, the highest rank in sumo.

But there wasn't time for Microsoft to build enough Controller Ss. So the launch consoles in the west shipped with Duke and the after market controllers were Akebono. When the Xbox eventually launched in Japan in 2002, all the controllers were Akebono, but the damage had been done. “It caused everybody in Japan to say, 'do these guys know what they're doing? Are they going to be successful here?'” Bachus says. “That was rough.”


Ed Fries at the time of the Xbox's launch - a launch he was instrumental in.

Doing business

Before launching the Xbox Microsoft met with publishers to try to secure third-party support for the console in the US, in the UK and in Japan. Meetings were arranged. Discussions were had. Microsoft talked the talk. Publishers signed up, or they didn't.

In Japan these meetings were fraught with complexity. So popular was the first PlayStation that Sony enjoyed a vice-like grip over the hearts and minds of Japanese publishers. They were afraid to alienate Sony by supporting Microsoft. In some cases, they were even afraid to be seen to support Microsoft.

“I remember going to a Sony party at E3,” Bachus says. “They had every one of the major Japanese game publishers who we'd spent a lot of time with in Japan. I ran into one of these guys, who was standing with Ken Kutaragi. At first he was like, 'hey!' and his face lit up. And then he realised he was standing next to Kutaragi. 'Oh, oh, I'm sorry, do I know you?' He pretended he didn't because he didn't want to alienate Sony.”

Microsoft had heard that Sony struck different loyalty rates with different publishers. Microsoft wanted to create a level playing field where all publishers paid the same royalty fee, but this rubbed some Japanese the wrong way. “They thought we'd buy their loyalty,” Bachus says.

With Xbox Microsoft was starting from scratch in Japan. It had a relationship with Sega because Microsoft had created a version of Windows CE for Dreamcast and some of the Sega console's development tools, and it had a relationship with Konami (through the PC port of Metal Gear Solid) and Tecmo (mainly because Blackley and Itagaki got on like a house on fire) but these relationships were small and distant.

Microsoft's strategy was to talk tech. Bachus and Blackley visited Japan on a regular basis to extol the virtues of the power of the Xbox. They tried to do it the Japanese way, socialising over dinner and drinking lots and lots of wine. The idea was to cultivate relationships that would benefit Xbox in the long term.

At E3 2000 the Japanese game industry flew en masse to Los Angeles. Microsoft had its chance. The Xbox team got wind of Club Cha Cha, a Japanese hostess bar in Torrance, California, near Los Angeles International Airport, that Japan Airlines would recommend to their first-class customers. It was for a certain sort.

Bachus block booked the entire place, and one by one they came - the first time all the Japanese game developers had been together under a Microsoft roof. They had a great time, and Microsoft was more than happy to bankroll the fun. At the end of the night, which was actually the morning, Bachus looked at the itemised bill: the Japanese had drunk through $30,000 of wine. “Japanese game developers are particularly appreciative of that,” he says with a chuckle. “The party went on for a very long time.”

“They were very friendly to us. Very receptive. On a personal level I really enjoyed them and had a good time with them, but from a commercial standpoint they were trying to figure out what sort of thing they could do to justify an investment in developing games for Xbox.

“A lot of the classic console games have come from Japanese game publishers obviously. But that represents a very small percentage of the games they do. If you look at Namco, Ridge Racer or Tekken, very successful games in and out of Japan. But compared to the number of titles they do, most of which never see the light of day in the west, it's a big investment to say, okay, we're going to staff up an engineering effort to do a game specifically for this one title we think is probably going to be successful in two thirds of the world, and not the world that reflects well on us and we take pride in.”

Meetings meetings and more meetings

The cultural divide between east and west that caused Microsoft so many problems manifested itself in meetings. Sometimes, these meetings went well. Microsoft had a relatively easy time securing Tecmo's Dead or Alive 3 as an Xbox exclusive launch title because of Blackley's close relationship with series creator Tomonobu Itagaki, Later, in 2004, Itagaki's Ninja Gaiden released exclusively on Xbox.

“I remember meeting with them and they were saying, 'well, I guess you're here to ask for Dead of Alive, because everybody comes and wants to know what it would take for us to move Dead or Alive over.'” Bachus says. “I said, 'actually, no. I've read you're thinking about doing Ninja Gaiden, which was one of the first games I ever bought, and I'd love to see that on Xbox and I'd love to build a franchise around the association between Ninja Gaiden and Xbox.


“My candour and the fact we weren't just looking to go after the crown jewels right away, that we were looking to build a relationship with them, surprised them in a positive way. They seemed to embrace a relationship with Microsoft in a more receptive way than some of the others who were looking at it from more of a commercial standpoint.”

Doing business in Japan is not the same as doing business in the US, and the Xbox team learnt the hard way. In the US businessmen meet, discuss a contract, terms, sign and then get to work. In Japan business is done based on the strength of a relationship, cultivated in the many restaurants and karaoke bars that litter Tokyo and other business centres. The Japanese want to get a sense of who they're dealing with before they sign on the bottom line.

“When I first took over the games group back in '95, we had a game in development with Namco called Return of Arcade,” Fries recalls. “It was the second Arcade series we had done with them, porting their arcade classics to the PC. I kept talking to my guys on the team about where the contract was. The contract wasn't done, but the game was getting done. Finally the game was done. It was in manufacturing and we still didn't have a contract. That's a problem. I had to fly to Japan. I had dinner with the senior execs of the Namco team. Then I flew home the next day. We never talked about the contract, but then the contact was signed and everything was good.

“That's when I first started to learn about business in Japan.”

“They were very American, and I'm an American so I can say that,” Greiner says. “And Xbox is a cocky company. I respect them because I love what they've done, but sometimes that doesn't rub Japanese well when you're in their culture trying to break into their market. You have to act like them. You can't act like the Wild Wild West. This is the ancient Orient, not the Wild West, and there are lots of rules and ways to do things that you simply don't cross lines.”

Sometimes meetings didn't work out quite as intended. “I remember one rough meeting where we met with Naka-san [Yuji, creator of Sonic the Hedgehog],” the softly spoken Fries says. “Maybe he and I had an argument. He's known for that. I had to get mad at one point, which is unusual for me. It really is. But he didn't hit me or anything, like some of the stories I've heard.”

But for all the good work Microsoft did to secure Japanese-made games for the Xbox, it is the ones that got away that linger longest in the memory.

[fatty]

Why Xbox failed in Japan (Part 2 of 2)
The inside story on Microsoft's greatest ever challenge.
By Wesley Yin-Poole Published Friday, 14 December 2012

The ones that got away

Christmas 2000, a year from launch. Most western publishers had jumped on board and were developing for Xbox, but Microsoft was still enduring friction in Japan. Executives struggled to work out what was going on. Was the team in Japan working hard enough? Was it made up of the right people? Was the challenge simply too great? It was decided - a quick trip to Japan would sort everything out.

Microsoft had heard on the grapevine that Shinji Mikami, famed creator of Resident Evil, had grown tired and frustrated with developing for the PlayStation 2, which hadn't even been out a year. There were whispers that Mikami was thinking about moving Resident Evil away from PlayStation. He was looking at Microsoft, preparing to launch the Xbox, and Nintendo, preparing to launch the GameCube. Microsoft saw its chance, and set up a meeting.

Bachus remembers Mikami looking every bit the Japanese rockstar, all mirrored sunglasses and leather jackets. An entourage of hangers on followed him into the Microsoft Japan meeting room.


Kevin Bachus, perhaps looking pale after losing out on Resident Evil 4.

The meeting was conducted by a member of Microsoft Japan's staff who could speak both English and Japanese. Things began cordially, but soon started to deteriorate. Bachus shifted uneasily in his seat. He could tell from Mikami's body language and tone that he wasn't happy with the answers he was getting. The entire meeting was conducted in Japanese. Notes were passed to Bachus explaining what was going on but all he could do was watch in horror, helpless, as it fell apart. The meeting ended abruptly. Mikami stood, bowed, and left.

Bachus was furious. The translator explained: Mikami had confirmed what Microsoft had heard, that he was frustrated developing for PlayStation 2, which was tough to work with. But his team's bonuses were tied to game sales. He needed a reason, a way to explain the shift away from the wildly successful PlayStation 2, the dominant platform of the time, to the Xbox, which had yet to launch, and which in most Japanese eyes was doomed to failure. “What do you guys have to offer?” he asked, bluntly.

Eventually an exasperated Mikami boiled it down: 'what is your philosophy? Sony says games are entertainment, something larger, fuelled by the Emotion Engine. Nintendo says games are toys, created by the legendary Shigeru Miyamoto, perhaps the greatest game developer of all time. What do you feel?' Microsoft had no answer.

“I almost jumped out the window because we had said repeatedly over and over and over that we aspire to enable games that could be considered to be art, much like film,” Bachus says, “that because of the maturity of the development tools and the APIs and the power of the technology, game developers on Xbox would be able to concentrate on the finesse features that elevated games to being something more than they were otherwise.

“So the guy who reported to me said, 'oh that's so great! I wish that I had known that.' But unfortunately it was too late.”

Bachus flagged down Pat Ohura, the head of Xbox Japan at the time, and told him to jump on the next train to Osaka to salvage the deal. But he was too late. Mikami had already met with Nintendo and pledged Resident Evil to its consoles. “That's why Resident Evil 4 was a Nintendo exclusive and it took a while for it to come to Xbox. That was very frustrating.”

Ed Fries has his own tales of Xbox exclusives that got away. One involved Square - the only major publisher not to support the Xbox at launch - and massively multiplayer online game Final Fantasy 11.

Square wanted to bring the game to the Xbox, but Microsoft's Xbox Live team in Redmond resisted, pushing back against the idea of having a more open platform. Square wanted to create a single world where PC players and Xbox players could interact together - a difficult technical challenge to resolve.


Resident Evil 4 launched on the Nintendo GameCube in January 2005. What might have been?

“They didn't want to be open to this Square thing,” Fries says. “I was just trying to get Square to support us at all. This was something they were willing to do on Xbox. They weren't willing to bring their core Final Fantasy over because of their tight relationship with Sony, but if we could get FF11 then we'd have a Final Fantasy on our platform. That sounds great, right?”

Many meetings and dinners later, a meeting in the US at E3 2003 was arranged. Microsoft and Square executives sat down to discuss Final Fantasy 11. From the off it was a disaster. “I had gone through a lot of work to set up this meeting,” Fries says. “I just sat there and watched it fall apart. There was a whole bunch of American attitude to the meeting, and the Japanese did not appreciate it.

“It was like watching a train wreck. It was like watching all this work I had done just fall apart.”

Bachus puts Square's lack of support for the Xbox down to a “self-reflecting problem”. “Square decided that with Final Fantasy it had been a good strategy to focus exclusively on one platform. You didn't see Final Fantasy on Nintendo, Sega and Sony. They decided it was going to be Nintendo and then they decided it was going to be Sony.

"They were intrigued by the capabilities of what we were doing with our platform. There were a lot of things we were looking to do together from a technological standpoint, but ultimately they believed even more significantly than the others, that Xbox was unlikely to be the dominant platform in Japan in the PlayStation 2, Xbox and GameCube era, and that because they were going to once again focus on one platform exclusively, it made more sense for them to be on PlayStation than it did to be on Xbox.

“Final Fantasy has historically been predominantly a Japan-centric title. It does very well outside Japan, but not nearly as well as it does inside Japan. At the end of the day they felt that the installed base of PlayStation in Japan and PlayStation 2 lent itself more for that. And at the time, once you go past Final Fantasy there's not a whole lot in the Square library to say, well, we have Square, we just don't have Final Fantasy.”

The launch and scratched discs

Ed Fries remembers the launch of the Xbox well. It was early morning on 22nd February 2002. He and the team had stayed up all night, as they often did in Japan, and headed straight to the days' festivities in Shibuya. Bill Gates had made the trip and was on hand to give away the first Xbox sold in Japan, but he reserved a special mention for Fries, who was expecting the birth of his first child in little over a month's time.

“He signed an Xbox for me. He wrote, 'Ed Junior's first toy. Bill Gates.' I've got that here. It's a prize possession. That first Xbox was a smokey, clear colour. It was a neat box. It was a neat time in my life. We had just launched the Xbox and then I was having my first kid.”

But things soon went south. Japanese gamers began complaining that the Xbox was scratching game discs. It wasn't a problem local to Japan, but there it caused an uproar that blind-sided Fries and the Xbox team back in Redmond. The re-sell market in Japan is particularly important, and if there is a scratch on a disc it lowers the value of the game. “It's not really an issue in the US,” Fries says. “Maybe western companies sell to a different standard than Japanese companies. As it spun in the carrier it could leave a rotary scratch on the outside of the disc, which doesn't interfere with gameplay at all, but interfered with the re-sell value in Japan.”

Then, amid poor sales, more bad news. “When things started to go against Microsoft they decided they needed to do some layoffs,” Bachus says, “which was very, very not Japanese. They handled it in a very American way and it made national headlines, so it again reinforced the notion that this wasn't a console for Japanese gamers. This was a console that was for western gamers and was being made available in Japan.”

As news of the layoffs spread former employees at Microsoft's Xbox operation spoke out about apparent poor treatment. "The Xbox sales situation has become severe," Microsoft's director of business development, Par Singh, reportedly said during a company meeting reported by Nikkei Keizai Shimbun. "Regrettably, an early retirement program has been instituted. Please return to your desks and check your email for a letter from the Personnel Department. If you receive one, follow the instructions immediately." This was the way of the west, not the way of Japan.

In September 2003 Microsoft announced that Yoshihiro Maruyama, previously an executive at Square, had replaced Singh as the new general manager of the Xbox Division at Microsoft Japan, reporting directly to Peter Moore, then corporate vice president for Worldwide Retail Sales and Marketing in Japan and Europe for the Home and Entertainment Division. Microsoft said this “key” management addition would reinforce Xbox's commitment to Japan.

The cultural divide

Many foreign companies have struggled to find success in Japan. Microsoft is not the first, and it won't be the last. But it's clear that as the gargantuan American company was finding its feet in the land of the rising sun, it didn't play a smart game.

“It's a very unique iconic market,” John Greiner says. “You've got to know what moves people and what doesn't. They have to do it their way. I know some of the Microsoft Japan guys and they get that. They understand. But it's hard because a lot of decisions are made out of America, even for them. That's hard for the Japanese to work with."

Talk to the Japanese about Xbox and you get an odd, almost apathetic response. They know they're not that bothered, but they're not that sure why.

The Team Ninja of 2012 is very different to the Team Ninja of 2000. Itagaki is gone, hoping to make a success of Devil's Third. In his place stands Yosuke Hayashi, lead developer of Dead or Alive 5 and Ninja Gaiden 3 - both multiplatform games.

The Tecmo Koei booth is one of the larger at Tokyo Game Show 2012. There Dynasty Warriors and all its spin-offs attract attention from the locals. The noise is deafening, and Hayashi's poor translator has to shout to be heard.


Yosuke Hayashi heads up Team Ninja, once a powerful ally for Microsoft in Japan.

I ask the Microsoft in Japan question and he smirks before it's even been translated. “Sony and Nintendo were born in Japan,” he replies. “They're Japanese companies. That's where they come from. Microsoft is an American company. That's where it has come from.

“Say you go to Germany, you see a lot of people driving Mercedes Bens, BMW. You go to America, you see a lot of people driving American cars. They know American cars. In Japan people are driving Japanese cars.

“There's just something about the hardware that gets made in each region that works for that particular region, and the people there just know it and they get it. It's a natural evolution of being created there. That's one of the things which might have hampered Microsoft or made it one of the challenges to reach the people over here.

“It's just not from here. It just doesn't feel like it came from here.

“If you got to Europe you see more of a balance between Nintendo and Sony and Microsoft in their platforms. Maybe that's because none of them were made from Europe. So they're all foreign.

“It's not that there's anything bad with the 360. I love 360 games. There are a lot of 360 games I want to play. But in general it has a different feel and it just hasn't resonated like a Sony or Nintendo console.”

“It's just not from here,” he says.

“Of all the countries in the world, the more we understood Japan the more we understood it was going to be difficult,” Ed Fries says with a sigh. “About Japan culturally, about their long history in the video game business. There's a cultural conformity that happens in Japan. All those things conspired to make it hard for an American product to come in and compete head to head with entrenched Japanese competitors.

“The more I got involved with it and learnt about it, the less surprised I was about how we were doing. When we were starting to work on 360, I was in the camp that we should de-emphasise Japan, that we should just accept it will never be a market where we'll do particularly well. Although we should pay some amount of attention to Japan, it shouldn't be a giant battle for us. There were other people who felt differently on 360, for sure.

“The people like me who spent more time in Japan had a more realistic expectation of what our potential was there and what the future potential was, than some of the people who were mostly back at Redmond and were divorced from it. For them, Japan was thirty percent of the market. We can't just give away thirty percent of the market. So we need to go and win there.”

The Last Hope

Whether through recklessness or bravery, Microsoft has thrown money at the Japan problem. Microsoft's media briefing at Tokyo Game Show 2008 opened with a trailer for The Last Remnant, a role-playing game made by Square Enix in Tokyo for release exclusively for Xbox 360 that November.

On stage then corporate vice president John Schappert told the Japanese game community how they could appeal to the global market with Xbox games. “Xbox 360 has emerged as the console for RPGs,” he said. “We're seeing compelling titles like Tales of Vesperia, Infinite Undiscovery, Fable 2, Fallout 3 and The Last Remnant. And that's just for 2008.”

Also shown was Xbox 360 exclusive Star Ocean: The Last Hope, the Tri-Ace made, Square Enix-published JRPG, and the first in the series this generation, and exclusive to Xbox 360 - an eye-catching coup. Resident Evil 5. N32, Ninety Nine Nights 2, from Q Entertainment - an Xbox 360 exclusive. Tekken 6, out on Xbox 360 in autumn 2009. XBLA game Space Invaders Extreme from Taito. Arkanoid Live. SNK Playmore's Metal Slug 7 for XBLA. King of Fighters '98, out in the spring. R-Type Dimensions from Konami.

Fast-forward two years to Tokyo Game Show 2010. Microsoft's media briefing was held on 16th September. Takashi Sensui, general manager of Microsoft Japan, walked out on stage to announce the 10 Japan-made games he believed would reverse Xbox's dwindling fortunes in the country.

Kojima Productions producer Shigenobu Matsuyama gave a demo of Metal Gear Solid: Rising, the game that would eventually be shifted to Platinum Games and renamed Metal Gear Rising: Revengeance. Where is that now? It launches next year. In Japan, the Xbox 360 version has been cancelled.

“We can only say there are several reasons for that, and we can't get into specifics,” is all Kojima Productions producer Yuji Korekado would tell me over Skype. “In Japan we have users who play a lot of PS3 games and users who play Xbox 360 games.”

Then Phil Spencer, corporate vice president of Microsoft Game Studios, announces five brand new partnerships for Japan-made Xbox 360 exclusives: Spike - Fire Pro-Wrestling, coming 2011. Treasure's 2011 XBLA game Radiant Silvergun. Kinect exclusive Haunt, from NanaOn-Sha. Grounding Inc's Project Draco, now called Crimson Dragon, supposedly the spiritual successor to Panzer Dragoon. Suda 51, CEO of Grasshopper Manufacture, with codename D, coming 2011 for Kinect.

Then, more Xbox 360 exclusives, this time with a focus on Kinect: Dr Kawashima's Body and Brain Exercises, a launch title for Kinect in Japan from Namco Bandai. Child of Eden, a Kinect exclusive from Q Entertainment, SEGA's Rise of Nightmares for Kinect and Capcom's Steel Battalion, a Kinect-exclusive from Dark Souls maker From Software.

How did these games do? Each and every one failed to make a dent in the sales struggle Xbox 360 endures in Japan. One still hasn't come out: Crimson Dragon, from Grounding Inc. The Japanese developer failed to respond to Eurogamer's enquiries. Microsoft provided the following statement:

“Crimson Dragon on XBLA was initially slated for a June 13 2012 release in Japan, however the release has been delayed. We don't have a release date to share at this time, but we're excited about Crimson Dragon's progress, and we are continuing to work on it with the teams at Grounding and LandHo!”

And what of the Kinect exclusives? Like most games for the motion sensing camera, they failed to set tills alight in Japan and the rest of the world. It's no surprise: as all Japanese publishers will tell you when the tape recorder isn't running, Kinect was never going to gain traction in Japan, where living space is at a premium and homes are smaller, on average, than they are in the west. Here we laugh about how much space you need to get Kinect to run properly. In Japan they don't even bother.

Now and then

Microsoft's decision to skip Tokyo Game Show this year was deemed a sign of two things: one, of TGS' reduced importance, and two, that Microsoft simply didn't have anything of importance to reveal, with the next-generation looming on the horizon. But it was also a sign of the diminishing importance of Japan to Microsoft and Xbox.

24 Xbox 360 titles were shown. 148 role-playing games were there. 21 games were described as shooting. Last year there were 37 Xbox titles at TGS. The year before that 25. In 2009, 40. In 2008 62.

Has Microsoft given up on Japan? In 2010 senior Xbox executive Chris Lewis insisted Microsoft would not pull out of Japan, but did admit to it being “a challenging market”. “We are up against very strong competition there,” he told Eurogamer. “All our competition is strong. We're very respectful of what Sony and Nintendo do and where they've come from and what they bring. Nintendo, particularly with the Wii, has opened up a market opportunity there. We've leapfrogged that handheld technology with Kinect...”

"We are up against very strong competition there"
-Xbox EMEA boss Chris Lewis

Microsoft declined to put forward a spokesperson for an interview about Xbox in Japan for this report but did provide the following statement:

“As we move into the holidays, there is a focus on the worldwide market (for example the Black Friday sales figures that were released) rather than performance by territory.”

The future

The next Xbox looks set for launch in time for Christmas 2013. Will Microsoft once again invest in Japan exclusives that fail to make a mark? Will it, once again, throw money at the Japan problem?

“I would first lower expectations,” John Greiner advises. “What's a reasonable number? How many units do you think you can sell? It's possible for them to be a challenger, but they're still an American company and still operating from an American mindset.

“The Japanese they have here are very good and I appreciate what they're doing, but it's hard to dislocate the cultural aspects of Microsoft from even their Japanese divisions. So they're still very much Microsoft. It's going to be really hard for them.”

“If I were them I wouldn't give up on Japan,” Fries adds. “Sony's in a much weaker position than they used to be. So we'll see what that means for what they bring out in this next generation and how successful it'll be. Nintendo has moved into a very low-end hardware place. There's room for it to be the biggest, most powerful machine. With the Japanese game market not as strong, maybe Japanese gamers are more open to western content.

“I guess my point of view is, I would just be what Xbox is. It's always done well when it's focused on what it does well instead of trying to be what it's not. If it's the best machine to play shooters on and shooters are the most popular category, then I would do that. I'd love to have Square supporting the machine and bringing Final Fantasy to it. I wouldn't be closed to that. I just wouldn't spend a hundred million dollars to make it happen.

"We should be what we are and be our culture, and to whatever extent they're willing to accept that, that's great"
-Ed Fries

“I would take a realistic approach to it. Think about anime culture in the US. That's pure Japanese culture influencing the culture in America. And likewise our culture can influence their culture. And our products can influence them. We should be what we are. That doesn't mean we shouldn't work with Japanese developers and develop Japanese content. But we should be what we are and be our culture, and to whatever extent they're willing to accept that, that's great. That's my attitude.”

Speaking to those who struggled to make Xbox a success in Japan, there is sadness and regret, but on the whole most are proud that they gave it their best shot. Yes, the goal was to win in Japan, outselling the PlayStation 2 and the GameCube, then the PlayStation 3 and the Wii. It hasn't done that. It hasn't even come close, but that doesn't mean there haven't been successes along the way.

“For a long time when I was at Microsoft and was working on DirectX, I would go to Japan,” Bachus says, thinking of his proudest achievement there. “It was a challenge because there weren't many PC game developers. I was trying to figure out, 'well, how can we get more PC development in Japan?' I would always go to Akihabara and I would walk through these shops and these big monuments to gaming. One floor would be the PlayStation floor. One floor would be the Nintendo floor. I would walk around it.

“I remember going to the launch of Xbox in Japan February of 2002 and everywhere I go I see Xbox logos, I see Xbox pictures on the subway, I see Xbox on the buildings. I go to Akihabara, and these places I had walked a hundred times before now all of a sudden have Xbox displays and big throngs turning out to check it out and find out what's going on with it.

“I can't express to you what it's like to have something you work on go into... the closest would be if you were an artist and you'd always gone through the National Gallery and then suddenly one of your paintings was hanging there. That was great. That was a real high point for me.”

In the end, Bachus and Fries remember their time in Japan fondly. “There are a lot of things that went well,” Bachus says. “It was always going to be a herculean uphill battle. So in that regard I don't think many people were surprised it struggled. I was almost as surprised by how much we did accomplish in Japan and how much we accomplished with Japanese companies. I remember it being very challenging and being disappointed we didn't do better, but not feeling this thing was just a sinking ship.”

“I love Japan,” Fries declares. “I love going there. I think it's such a playful culture. It's one of the only places in the world where you'll have a serious business meeting and people will have a little Hello Kitty hanging off their cellphone. You'll see people playing games in the subway. It's a culture that doesn't take itself too seriously. It's a great culture for gaming.”

Will it ever be a great culture for Xbox? As Microsoft embarks on its next assault on gaming with a new console, we're about to find out.

Couldn't resist:


Lot of great points in the article, though.

[oldskoolboarder]

Kind of the other side of the coin of the Nintendo article I read (I forget where). Said that the success of the Japanese-centric games on Nintendo platforms pretty much kills their future growth in the US because they make more money there.

[Jincman]

I doubt that Microsoft will invest much this coming generation in Japan for the XBox. The XBox is 'out of the woods' so to speak as far as getting all kinds of content and they don't really need Japan like they felt they needed them 6 years ago.

I do agree that the scratched disc issue and red ring issues hurt in Japan more then they did in the US. I feel that Japanese consumers are less tolerant of hardware failure then the US.

[fatty]

I like that Japan values the condition of the software and hardware. I would be much more likely to purchase used more often if that was the case here. I remember purchasing a 'new' copy of Ocarina of Time from Gamestop a long time ago and opening it to see a small curly hair stuck to the game. Promptly returned. No, I don't want to know where that hair was from. Since then the discs that I have purchased used have sometimes looked shady as well.

If anyone comes across the Nintendo article, please post it as I think it would be a great read.

[Jincman]

Jan 1, 2013 23:02:36 GMT -5 oldskoolboarder said:

Kind of the other side of the coin of the Nintendo article I read (I forget where). Said that the success of the Japanese-centric games on Nintendo platforms pretty much kills their future growth in the US because they make more money there.

I think this is because of the Yens strength against the dollar.

Although, Nintendo gets a cut on 3rd party games as well and if those are American based ... that's good money too. I think Nintendo has a strong interest in the US market. They are interested in expanding and catering to the family gaming market. They have done a great job with that on the Wii and will continue to push that on the Wii U.

[fatty]

I'm not really into FPS games nowadays but I remember in college I loved Goldeneye and would play it for hours straight.  Though I never really got into Halo I did get a lot of time in with Timesplitters 2 in as well.  Here's a pretty good article about Free Radical, which contained developers who worked on Goldeneye and later were responsible for Timesplitters.  Sad to learn how their fate all went down.  If you enjoyed the article make sure to click on the link to give the website some views.

Free Radical vs. the Monsters

The dark LucasArts: What drove the legend behind GoldenEye out of games, and the publishers who had a hand in the studio's demise.

By Rich Stanton Published Friday, 4 May 2012

The story of Free Radical Design begins with one of gaming's milestones, and after almost nine years it ended with the studio's blood on several publisher's hands. Founded in April 1999, the Nottingham-based studio created the much-loved shooter series TimeSplitters and third-person psychic drama Second Sight during the PS2 era. But Haze, the company's final game, received a critical mauling, sold poorly, and shortly afterwards Free Radical entered administration.

This article began with the question 'Did Haze Kill Free Radical?' But after speaking to every key figure in the company's history, the story turned out to be much bigger than the poor reception of one title. It's about how big publishers sometimes manhandle the developers they work with, and how badly they handle change. It's about how they asphyxiated one of Britain's finest independent developers, and drove an industry legend out of the games business.


Free Radical Design was founded by key members of the Rare team that made GoldenEye. Released on N64 in August 1997, it was the first classic console shooter and sold a stunning eight million copies. "I think at the time we naively believed we did everything ourselves," laughs Free Radical co-founder Steve Ellis. "We were kind of a company within a company in Rare and credited ourselves for the success of GoldenEye, without really acknowledging that many other people played a part in that."

Dissatisfied with their meagre share of GoldenEye's profits, the team had nevertheless started work on successor Perfect Dark before, in late 1998, David Doak handed in his notice and set off a chain reaction. Doak had originally been hired as a network guy, but was soon one of three lead designers on GoldenEye 007. He's got a knack for getting into games; GoldenEye fans may remember MI6's sleeper agent 'Dr. Doak' (a friendly dig at Doak's doctorate from Oxford University) from the second mission. He later turned up in Haze as rebel leader Merino - the man the corporations want to slay.

"Steve and I hadn't really spoken about it very much," says Doak, Free Radical co-founder and director. "I think he was pretty shocked when I left Rare. But to Steve's credit he definitely galvanised me, and he's never been one for inaction." Doak and Ellis set up the company, and were joined by Karl Hilton, Graeme Norgate and Lee Ray.

The term 'Free Radical' describes atoms or molecules that are fiercely reactive. Free Radical Design was independent, jammed with talent, and determined to stand up for itself - a combustible mix that meant, initially, publishers were slow to react. Retaining the IP for titles it developed was a priority, which meant that Ellis and Doak had a few wasted meetings before Eidos made a move.

"When we set up we weren't going to make TimeSplitters," says Ellis. "We were making a game called Redemption that would end up being Second Sight." The estimated development time was three years. "Redemption was the plan," says Lee Ray. "Then Ian Livingstone says, being the Fighting Fantasy freak that he is, said 'Yeah we'll do it if it has demons in it.' He was obsessed with demons! So there was a bit of arguing and discussions about what exactly this game was going to be, and in that time Steve had banged out a very good first-person shooter engine. So now instead of all that talking, we could be cracking on with something."

"We started working on TimeSplitters and didn't tell Eidos about it," says Steve Ellis. "Then we showed them and they said, 'No definitely not, don't do that, we don't want it.' We carried on anyway, and when we went back to them a few months later they came round. The budget for it was very small, six figures, so it wasn't that big of a gamble."

That makes an audacious project sound easy. TimeSplitters was aiming to be a launch title for PlayStation 2, which meant October 2000 and a development time of sixteen months. "With a team of 15 everyone had to put the graft in," says Ray. "And everyone did. TimeSplitters was shambolic but bloody hell it was creative. That was a 15-man team working round-the-clock to get a launch game done on a platform we hadn't seen."

"We had a lot to prove," says Doak. "It was tremendously exciting. I remember getting up and just being so keen to get to work. It felt like a real moon shot, you know, and everyone who joined was really excited to be on board. Everyone pulled together, the artists and animators were sitting testing it until the 11th hour."

The next project was intended to be Redemption - but now that Eidos wanted another TimeSplitters. Free Radical began expanding. "At the end of TimeSplitters there were still only about 17 people in total," says Ellis. "We five founders were all still hands-on at that time. By the end of TimeSplitters 2 we had something like 30 people working on it."

"With TimeSplitters we showed we could do it," says Doak. "With the second one we wanted to make a genre-defining game. TimeSplitters 2 was great, it was brilliant, because we'd shipped a game, we had some very cool tech, we knew what we wanted to make better, and we just wanted to do the concept on acid."

TimeSplitters 2 was released in October 2002 and surpassed the original in every way. "Personally I think the best thing Free Radical did was TimeSplitters 2," says Ellis. "That was the highpoint for the company, the game that was most like what we wanted to do. Given infinite resources, it's what we would have done more of." The reviews were great, and the game would go on to sell well over two million copies across three platforms, but it wasn't the breakthrough hit Free Radical had hoped for.

Meanwhile, Second Sight had finally entered full production. The project had changed hands from Eidos to Activision, and Free Radical were about to taste business Bobby Kotick style. "We got some way through it with Activision," says Ellis. "Then they had a day in November 2003 where they made big changes. They decided they didn't like UK development anymore, they didn't like external development anymore, and they didn't like developer-owned IP anymore. Bad for us, because we ticked every box! On that day I think they canned ten projects and in the process put some companies out of business."

"It was a troubled development," says Doak. "Because that's when we found out how Activision worked. Bobby Kotick really loves developers! He wouldn't even speak to us, and we never spoke to him. He's quite happy to have some people put us out of business, but only does calls with investors. That was like the night of the long knives. We stood up to Activision, we had good legal counsel and they told us the right things to say. It looked like it was going to put us under for a bit, but didn't."


Free Radical's insistence on owning its own IP had paid dividends, and they were able to take the near-complete game elsewhere. But hopes of a big marketing push to back the studio's pet project had been dashed. "It ended up at Codemasters," says Doak, "But at that time they had their own problems - and the game came to them nearly finished, so they wanted to get it out as quickly as possible on a shoestring. We desperately needed someone to publish it, and they needed filler. That was it. Their Lara was Colin McRae, every publisher has one."

Second Sight was released in August 2004, and its final form eschewed Ian Livingstone's demons in favour of a unique combination of stealth action and psychic powers. "It was unfortunately timed," says Doak. "I mean what are the chances of people making two Asteroids Hit the Earth movies in one year? Must be a million to one! But there you are. And Psi-Ops came out at around the same time, and that blew our US sales out of the water. You could do more violent things in it like explode people's heads." The sales were far from stellar.

Free Radical's other project at this time was the last TimeSplitters game, Future Perfect. After TimeSplitters 2 EA had come sniffing around, and Free Radical was ready to listen. "EA Partners was this part of EA that was involved with third-party things," says Doak. "It was a bit like being groomed, you know. Here's all these friendly avuncular people that will give you all the love and attention you need to get your game out, and then after a while they go away and all the bad guys come around and it's like you're in borstal. Getting held down, beaten around the head with a cue ball in a sock."

"In retrospect, what happened after TimeSplitters 2 was that EA saw the Metacritic and came to us," says Ellis. "I don't actually think they'd looked at the game very much." The publisher demanded Future Perfect have a strong lead character in order that it appeal to the US market. "EA turned up with this stuff that was supposed to help us," says Doak. "And it was just big boards with pictures of Vin Diesel on them. Wesley Snipes was on one in his Blade outfit." Future Perfect ended up with Cortez, a cowardly and dumb marine whose catchphrase falls flat every time: "It's time to split!"

Future Perfect had the longest development of any TimeSplitters game, and there was a sting in the tail. "We had quite a frank conversation with EA," says Ellis. "Where they told us they weren't going to bother trying to market it very much. Because at the time they had their GoldenEye game [GoldenEye: Rogue Agent], and they said that for every dollar they spent on marketing that game they would get more dollars back. It didn't match up with their original promises."

"Throughout the development of Future Perfect we had EA people all the time coming to us saying 'yeah your game's alright, but not as good as this GoldenEye we're making.'" says Doak. "Continuously! 'Yeah I saw GoldenEye, it's awesome, you Brits had better raise your game!' And we asked to see it. 'No, no, you can't see it'. We killed ourselves getting Future Perfect done, only to find that they had made a total balls of GoldenEye to the extent they had to throw more money at it to market it, the money that they might have spent on Future Perfect. I mean, it's like fiction that it's a GoldenEye game, isn't it? I don't think the irony of what they were doing ever occurred to EA."


Steve Ellis.
GoldenEye: Rogue Agent came out late in 2004 to a muted response, receiving a flat 60 on Metacritic. Future Perfect was released in March 2005, and while it received a warmer reception EA didn't push it, and it didn't achieve better sales than the series had under Eidos. "The problem is they never really got it," says Ellis. "That summarises it. And because they never really got it they tried to change it into something that they did get."

Free Radical was exhausted, and at a crossroads. "Second Sight wasn't a great success," says Doak. "Future Perfect sold a lot, but it didn't generate a lot of revenue for us. And we had a lot of people who'd killed themselves to get those games done. Our ethos was to reward these people, but we didn't have the money to do that as much as we wanted to, and that dents morale."

The studio's next moves would be made on a shifting battlefield, the move from the PS2 era to PS3 and Xbox 360. Publishers were facing rocketing production costs, and responded by becoming even more conservative, favouring internal studios and franchises that could hit four or five million sales with each instalment. "People were telling us, 'We don't like your cartoony styles, they don't sell. Can you do something more serious for a shooter, something more military?'" says Doak. "They wanted us to pitch stuff to them, but they were directing us down these narrow paths saying, 'Pitch us something a bit like this'. And what we should have said was 'f**k off, no. I'd rather go out and get run over by a car!'"

A consequence of the money involved was that retaining IP had become impossible, and Haze ended up signed to Ubisoft under a co-ownership deal. "The amount of money you were asking for to make a game was so much more than when TimeSplitters got started," says Karl Hilton. "Publishers just weren't prepared to invest seven or eight figures in something they didn't own a big part of."

"What I was hoping was we could make an anti-militaristic shooter, a kind of Apocalypse Now," says Doak. "But in terms of ambition it was crippled from the start, because we wanted to do this thing about the horrors of war, and Ubisoft were saying, 'Yeah go for it, something really horrific - but it's got to get a 15 rating.'"

"Previously we'd had the experience of an engine which just worked and you take everything for granted," says Haze's creative director Derek Littlewood. "Going from that to a situation where you're building everything fresh is very different, you can't throw together a level to test a particular style of gameplay because you don't have the tools to do it. On TimeSplitters 2 and Second Sight we were able to try out a lot of different things in-game during development, but on Haze that process was so much harder."

But what crippled Haze wasn't the age rating. "We made the decision to continue developing our own technology," says Steve Ellis. "Because that had worked well in the past, and we had a new generation of programmers who wanted to do away with our previous engine, which was C-based, and replace it with a C++ one. It sounded like a good idea. It sounded like we were going to solve a bunch of problems we might run into as things scale up. It didn't, and that was the start of our problems."

The problems meant delays were inevitable, and Free Radical approached Ubisoft. "When you're talking to any publisher about delays the first reaction is denial," says Steve Ellis. "You spend a lot of time talking and effectively making the situation worse. The next stage is reluctant acceptance, coupled with compromises as a result of us missing our date. We were made to do things because we had lost our ability to say no. That's where things went wrong."

Free Radical had to work to moving dates, as the game was delayed in small increments rather than the big one it needed. "It's like you're in a race and you're racing along, and there's a mechanic hanging on to the front trying to finish the car," says Doak. "And every lap you've got to smile, wave to the grandstand and pretend you're doing really well, even though on the other side you can see two wheels have just come off."

If things weren't bad enough, Haze soon had another problem. Ubisoft had agreed a deal with Sony whereby the game would become a PS3 exclusive in return for significant marketing support. "I have a tremendous amount of respect for Derek Littlewood," says Haze's project manager Martin Wakeley. "Because it became exclusive late in the project. And to be quite candid, it had never really ran on the PS3."

"We had internal people getting frustrated with some of the things we were making," says Doak. "But people were killing themselves to get Haze done, and they did amazing work. Some of the coders were those mechanics working on a car in a race, and hurting themselves doing it. I have enormous respect for the work people did on Haze. You always kind of hoped it might come together. But, you know, we're not stupid, we knew it wasn't what it could have been... we could see the problems."

Haze was released in May 2008, didn't receive the all-out marketing push than Sony had promised, and received a critical kicking, though with hindsight it's a game that, while flawed, is far from the disaster people say. Regardless, it didn't sell - and by now Free Radical had a much bigger problem.

The studio had completed Future Perfect and Second Sight with around 70-80 staff, but had been rapidly staffing up - thanks mainly to a deal signed in summer 2006. "The people at Lucasarts came and found us," says Doak, "and said we'd like to talk to you. Guys like Jim Ward and Peter Hirschmann, who I still have tremendous respect for."

Jim Ward was then the president of LucasArts, and his strategy involved a 'reboot' of the company's own IP - hence titles like The Force Unleashed and the aborted Indiana Jones project. Another was Star Wars: Battlefront 3, and LucasArts wanted Free Radical to develop it.

"They had good but very ambitious ideas about technology," says Doak. "And they seemed like nice people. We were fairly disappointed with where we were with Haze, and so even though we thought we didn't want to do work for hire as a principle, the fact that the work for hire was Star Wars did make a difference - it's not a bad one. It was also a fantastic tonic for the troops at Free Radical, because you don't have to go very far in development to find someone with Star Wars shit on their desk. It looked like a marriage made in heaven."

The studio hunkered down to its most ambitious project yet. "It was going well," says Doak. "They wanted to massively upgrade the scope, and consequently we were being required to be very ambitious technology-wise - when you see those leaked videos of it you can see it looks spectacular."

The key idea of Battlefront 3 was that players could seamlessly transition from a small-scale gunfight into a space battle simply by climbing into a ship and taking off. "It was so ambitious because you had to populate an environment like that on a scale like that, so we had some tough nuts to crack," says Doak. "We were continually trying to improve that, and it was going well, in fact it was going so well that we were going to make two, and they were letting us do some really interesting stuff with the mythology."


'Trying to get anything into Haze was a battle of wills,' says audio director Graeme Norgate. 'Another guy said that trying to get sounds into the game was like papering a wall while the rest of the house is burning down. Haze had high ambitions and potential but the engine killed it.'
Battlefront 3 had started in mid-2006, and development continued until early 2008. Then things changed. "Steve and I began thinking that the dates were looking a bit tight for the first one," says Doak, "so we thought we'd do what we had never done before and let LucasArts know our concerns. Because LucasArts had been so good to work with, we thought they'd see the sense of what we were saying. And that coincided with Jim Ward not being there one day."

Internal forces at LucasArts had lost faith in Ward's 'reboot', not helped by new IPs like Fracture failing to make an impact, and on 4 February 2008 he left the company. "That was worrying," Doak continues, "but it didn't seem like it would be a bad thing. We still thought we'd done the right thing. And then we went from talking to people who were passionate about making games to talking to psychopaths who insisted on having an unpleasant lawyer in the room."

The appointment of Darrell Rodriguez as president of LucasArts was announced on April 2nd 2008. He wasn't the only new face. LucasArts was making sweeping changes as part of a new strategy, the first step of which was cutting their outgoings in half. Huge numbers of staff were fired, an entire layer of management was removed, and countless projects were canned. "For a long time we talked of LucasArts as the best relationship we'd ever had with a publisher," says Ellis. "Then in 2008 that disappeared, they were all either fired or left. Then there was a new guy called Darrell Rodriguez, who had been brought in to do a job and it was more to do with cost control than making any games. And the games that we were making for them were costly."

The conversations with LucasArts became incredible, wars fought from different perspectives, and an internal video lampooned the attitude Free Radical was facing. Funny as that is, it's gallows humour - the effect on the studio would soon become no laughing matter. Any ally Free Radical had, like LucasArts' own UK producer, soon exited. Battlefront 3's development remained ongoing, and despite talks over the release date Free Radical was delivering on milestones.


But LucasArts began to press hard on other, less quantifiable, issues. "Stalling tactics," says Graeme Norgate. "If a publisher wants to find something that is wrong with a milestone, it's very easy for them to do so as there are so many grey areas within a deliverable. If the contract says, 'Graphics for level X to be release quality,' who can say what's release quality? And there you have it."

"LucasArts hadn't paid us for six months," says Norgate "and were refusing to pass a milestone so we would limp along until the money finally ran out. They knew what they were doing, and six months of free work to pass on to Rebellion wasn't to be sniffed at." Part of the eventual agreement between LucasArts and Free Radical saw certain assets passed on to Rebellion Studios. For a time LucasArts was tempted by the thought of a hastily put together Battlefront 3, but nothing came of it. When presented with the allegations put forth by this investigation, LucasArts said simply that it does not comment on rumour and speculation.


'I've seen some people saying how can they cancel something that was finished,' says Doak, 'And to be fair [Battlefront 3] wasn't finished, but it was very far from a car crash and had interesting ideas. They had some edict from above about restructuring, had to save a certain amount of money per year, and there you go. Game over.'
"We had a lot of good people," says Doak. "We'd got ourselves into this situation where we had staffed up to fulfill these contracts. And LucasArts said to us, 'Well we've got rid of our people, you get rid of your people.' No, because I'm attached to my people. Some people who work for them did terrible things to us."

"In many ways it was a depressing farce talking to them," says Doak. "They had an agenda motivated by purely financial considerations. Their goal was to stop doing it. And it didn't matter that we had a contract that protected us. If we wanted to fight about it they were quite happy to fight about it, but it would be on their terms, on their turf, and we would lose not because we were wrong, but because... well, we wouldn't be able to ante up."

LucasArts wanted to find an exit, and the balance of power swung firmly in its favour. "What we found out in 2008 is that your contract is only worth as much as how far you can pursue it in court," says Steve Ellis. "Say the contract is, 'If publisher wants out, they have to pay X million pounds to developer.' Well, what if they don't? What are you going to do about it?"

LucasArts presented Free Radical with a choice. "The amount of time [court] would take was more than the money we had left," says Ellis. "So in practice the publisher wants out, and what they do is offer a fraction of that amount. And you either accept a smaller payment and hope to pull through one way or another, or you don't accept the payment and go out of business quite quickly." Free Radical had no choice at all.


The pressure on David Doak was unimaginable. "My role at Free Radical meant that I was simultaneously involved in these unpleasant 'high level' discussions with psychopaths who wanted to destroy us, and then the next day sitting with our dev staff at their desks trying to boost people's morale. Helping them to pass milestones that I knew would subsequently be manipulated to cause them to fail. It was the most depressing and pointless thing that I have ever been involved in. The dream job which I once loved had become a nightmarish torture."

"I found it impossible to reconcile that situation in my head and I had a nervous breakdown. I had to stop and take time off for the sake of myself and my family - ultimately I left the company I founded feeling like I had failed it."

The vast majority of Free Radical's employees had no idea about Doak's circumstances. But the situation of the studio was clear; over 200 employees, but no projects signed and no money coming in. "At that point it hit home," says Derek Littlewood, "and people worked very hard to try and put together prototypes and design documents, we were gathering pitches that we could take out to publishers. I think everyone realised the seriousness of the situation."

"We had money in the bank, so we were able to carry on operating," says Ellis, "and Free Radical was in the probably unique position of not having borrowed any money." But this was mid-2008, and the height of the global financial crisis. "Big publishers were wondering what was going to happen," says Ellis, "And finding it very difficult to talk about signing up anything new."

One project they didn't want was TimeSplitters 4, which had been in development during the final years of Haze. "We tried to do TimeSplitters 4 with everyone," says Martin Wakeley, "and they weren't interested. People say they love it, but no-one wants to sell that game." The game had been built using an upgraded version of the original engine. "Running at a constant 60 fps," says Norgate "and with more lighting effects than we could even dream of in Haze. Too little too late, unfortunately."

Time was running out, and something amazing nearly happened. "Activision came to us and said do you want to make the next GoldenEye game?" says Ellis. "And that was a thing that gave us hope, and made us determined to turn things around."

For a brief moment, it existed. "In a very short space of time I had to throw together some ideas for what we would do with a remake of GoldenEye," says Littlewood, "and then one of our artists put together a new dam. We did it all in the end for PS3 and Xbox 360, the engine we had for that, so it was actually playable on there and all updated with minutiae and textures. It never saw the light of day, but we did that initial work because we wanted to show our willingness."

"Then GoldenEye suddenly disappeared," says Ellis. "Without ever any explanation, really. That sounded like a brilliant opportunity. That was one of the things that was happening right at the end when we didn't have many more options. In the end, they chose not to do it." Administration loomed.

"I can tell you exactly when it happened," says Ellis. "It was a memorable day. The day of our Christmas party in 2008. We always had a Christmas party and we always paid the bonuses then. Even at that stage we had a couple of good prospects that looked like they'd sort things out. That day it became clear they wouldn't happen, and administration was unavoidable. I remember quite clearly being at the party, seeing all these happy employees saying things like, 'Thanks for the bonus, I love working at Free Radical, it's great.' I didn't really know what to say. 12th of December 2008. A memorable day, and not a good one."


'I still think the top people did the right thing,' says Derek Littlewood, who now runs Eggbox Interactive, 'and Dave and Steve's effort to shield the people who were making the games from the business reality of where we were was a very honourable thing to do, and a tough thing to do.'
The administration process saw around 140 people losing their jobs, while a skeleton staff of around 40 was kept on to keep the company running. During this time Rebellion, always on the margins, turned up to put in bids for certain of the studio's assets. "Rebellion were one of the interested parties [during administration] and yes, put in an offer," says Ellis. "The sad fact is that in a situation like that, everyone is looking for a bargain so there were no 'good' offers - only 'preferable' offers."

But the process ends with Crytek purchasing Free Radical Design, and keeping a small but significant number of its people in a job. Crytek UK, managed by Karl Hilton and with Graeme Norgate on audio duties, has subsequently worked on Crysis 2's multiplayer and is current developing Homefront 2. Steve Ellis and Martin Wakeley have gone on to found Crash Lab, Derek Littlewood now runs Eggbox Interactive, and Lee Ray is an affable freelancer. David Doak remains outside the industry.

"The thing is we stood up for ourselves, we weren't afraid to tell people we disagreed with them," says Doak on the fall of Free Radical. "I think almost a decade later there were many people happy to stand around and watch the company go under. Maybe there were a few grudges. How come no publisher wanted to save Free Radical? Well we weren't well-behaved compliant boys. We were passionate about what we did and wanted to protect ourselves and be rewarded for our work. Perhaps if we'd been a bit more submissive that would have saved us. But who knows?"

The story of Free Radical runs in parallel to how the big console publishers have changed over the last decade. Free Radical was a studio that made its own tech, tried to keep control of its own IP, and even in 2012 stands as one of the few developers honest enough to pay their employees overtime. There are so many other ways it could have gone. What's hard to take is that it's done. Timesplitters may return, but Free Radical never will.

"Everyone knows all the horror stories about development," says Doak. "And it's a real shame, because it turns people off it in the end. There's this aspect open to exploitation where because it's your dream job, doing something you really love, you should endure all kinds of abuse to do it. Having watched it from the sidelines for the last few years, it seems to have gotten worse. It's just this big furnace that burns people. It's like that thing, where if you enjoy sausages you shouldn't see how they're made. That applies to games."

If you're interested in more of the bad blood between Lucasarts and Free Radical check out these links:

Former LucasArts employee on why Star Wars: Battlefront III failed

Free Radical cofounder responds to Battlefront III claims

[fatty]

Article about the story of Gamecube:

www.dromble.com/2014/01/07/dolphin-tale-story-of-gamecube/

I've only made it through some of it, but I like what I've read so far.

[UsualNoise]

Very interesting, thanks. Sad to see some long-standing Nintendo strategies still working against them today. (Lack of 3rd party support, lack of online gaming, etc.) Seems like the Wii really did save them as a console maker. Hopefully that doesn't have to happen again.

[fatty]

Video Game Layoff Stories:
kotaku.com/video-game-layoff-stories-1593420342

Some excerpts:

Like cows to the slaughterhouse

On a hot summer morning in August, 2010, an e-mail was sent out a little after 10am (our flex-hours required us to be in by then at the latest,) saying a company-wide meeting would occur at 11:30. Myself any my team members didn't think too much about it at the time, but in hindsight I could feel tension among some of the upper-ranking developers.

When the time came, all of the Senior Producers went room-to-room, ushering developer after developer into our motion-capture area, stating that this was a required meeting. Being the cheeky bunch we were, many of us made jokes about how it's a surprise party with beer, while others (like myself,) joked about layoffs and using a paintball gun as a deciding mechanism. That was a stupid comment to make.

After the studio was quickly herded into the large room, the large doors were slid shut behind us, reminding me of cows being herded to the entrance of the slaughterhouse. Within seconds, the Studio Director appeared with a piece of paper. His nervousness was palpable while reading from a scripted piece of paper, which he seldom did. "With a history of 8 years of no layoffs, and a consistent track record of delivering quality products on time; I'm announcing that today we will be making employment concessions in order to deal with changing expectations." I had no idea what that meant, other than we were on the chopping block.

Of course, being in QA, I knew my fate was sealed. Along with all of the smokers, and ex-smokers, many of us headed outside for a quick stress-relieving burner. After a group of 20 or so people finished their quick cigarette, we headed back upstairs only to find that many of our badges didn't work. They had deactivated many of our badges before even having our exit-interview. Frantically, one by one, many of us swiped our badge on the reader, the first 6 or 7 finding theirs did not work. The next person's worked, and we were able to walk to meet our managers, head in hands.

Two weeks a month

I have a little story from a small game company called [REDACTED] in Beijing.

This is not your normal game studio, oh no. It's been around for about 4 years now, but it has not released any games! Not a thing, no revenue coming in at all from their business practices (but a fair amount coming in via corruption within the Chinese government...)

So we were working away on a game for a couple of years, but the release date kept getting pushed back... March 2013...May 2013...September 2013...March 2014...but no progress was made on the game at all since February 2013

The reason for this? Simple really, people weren't getting paid. We were due to get paid on the 10th of every month, but every month the 10th would roll past with no sign of the cash. At best, we'd get it by the 24th (which always confused me, why not just change the payment date? -.-). This seems to have been going on for a while before I joined, so as soon as the 11th came by, and people still hadn't been paid, the entire development team would just stop working. They would sit at their desks playing WoW or LoL, refusing to contribute to the game until they were paid. This meant that every month there was at most 2 weeks of development time going into the game, which funnily enough meant that the developers were actually getting paid a full months salary for 2 weeks work (although the management never caught onto this, as they were incredibly inept). It really was quite the show of disobedience from a Chinese workforce that isn't normally associated with strikes etc.

Anyway regarding the layoffs. So the CEO decided we no longer needed artists...any artists at all, so he took all 17 of them into his office. There he told them they are all fired, and that they must sign the form on his desk to say that they accept the mutual termination of their contract and are due no severance pay. Now this may have worked if he did it 1 on 1, with a bit of intimidation from his powerful parents, however when there are 17 people in the room? The artists burst out in hysterical laughter and told him there is no fucking way any of them are signing that shit. They then all went to a nearby law firm, got themselves an employment lawyer and sued the company. I'm no longer there, but I hear they got quite a nice payout, 3-4x what they would have been owed in severance.

And the icing on the cake? Well the CEO and his mistress decided its about time they actually looked at the game that their company was making. What they saw was pretty much an interactive novel, with CGI clips and very little interaction. Sure enough, the game was scrapped and people began leaving in droves.

[fatty]

Not a video game article but thought this was a good read and wanted to share it considering many of us are familiar with the Napster era. This is an article about a guy who worked at a CD manufacturing plant and would steal the latest releases weeks before the street date and upload them to the web. Describes how he was one of the biggest uploaders and how he eventually gets caught by the FBI:

www.newyorker.com/magazine/2015/04/27/the-man-who-broke-the-music-business

[oldskoolboarder]

Ah Napster. The single reason why I ended up getting DSL at home. That and because I got an IT warning at work for downloading files. DOH.

[UsualNoise]

Fascinating article, thanks for the link!