Bandai Namco: We want more IPs to ‘double the size of our business’

Katharine Byrne
Bandai Namco: We want more IPs to ‘double the size of our business’
Bandai Namco’s European VP of marketing and digital Hervé Hoerdt

This August, MCV revealed that publisher Bandai Namco had struck up a new strategic partnership with Life is Strange studio Dontnod. Details about the game are still thin on the ground, but we do know it will be a brand-new IP focused on a new kind of narrative adventure set in a fictional US town.

Of course, given Bandai Namco’s recent release schedule, the news shouldn’t come as much of a surprise. In this year alone, the firm has published the likes of Tarsier Studios’ Little Nightmares, The Farm 51’s Get Even, Mojo Bones’ Impact Winter and Slightly Mad Studios’ Project CARS 2, to name just a few of its European-led titles. 

Its partnership with Dontnod, however, represents the next stage of its diversification strategy, so we sat down with Bandai Namco’s European VP of marketing and digital Hervé Hoerdt to find out more about how these titles will transform the publisher into a more global company and why its ultimate goal is to end up “somewhere between Nintendo and Disney.”

GAME PLAN

It all began in 2014, Hoerdt tells MCV. 

“Our strategy in Europe isn’t new,” he says. “We’ve been working on this for the last three years, but it’s only now starting to become visible. The first part of this was Little Nightmares, which we’ve been incredibly happy with, but it’s just the start. Now we’re very happy to partner with Dontnod.”

Naturally, Hoerdt’s ambitions for Bandai Namco’s European programme are high, as he wants titles like Little Nightmares to form 50 per cent of its publishing output going forward.  

“We’re a Japanese-centric company and most of our content right now is coming from Japan,” he continues. “We know that, as great as this content is, we’ve been targeting the same audience for years, so we want to double the size of our business, and we’re going to do it through more platforms, more localisation and more IPs.

“Japanese companies mostly develop on Nintendo and PlayStation [platforms], but more and more we have the Xbox, especially for the UK market, and PC. We also want our fans to enjoy localised games, so we’re doing more games in languages like Polish, Russian and Arabic.

“Last but not least, it’s about the IPs. We think about the big anime IPs like One Piece, Naruto and Dragonball, but our Japanese content is only addressing a limited part of the market segment. We’ve also been working with studios in Europe and we’ve been going back to Japan saying, ‘Okay, these are the hottest ones and we’ll bring these new IPs to market over the next five years’. That’s a pillar of our company, and we’re going to use it to double our business.”

Pictured above: Tarsier Studios’ Little Nightmares was the first step in Bandai Namco’s European strategy

To achieve this, Bandai Namco has been busy developing long-term partnerships with a handful of key studios, creating “a broad ecosystem” with the potential for “several iterations,” Hoerdt explains. 

“This might be one or two games, or one title as a game-as-a-service, but also – and I think this is more important as an entertainment company – to put it beyond video games and look at it in 360-degrees,” he says. “This means things like comics, toys, plush, board games, movies, series and so on. We’ve already been talking to Hollywood studios at E3 for some IPs, so this is the kind of vision we have.”

Bandai Namco is still being cautious about how it develops its European portfolio though, as Hoerdt says it’s very much looking for quality over quantity. Indeed, the publisher is aiming for just three to five narrative adventure IPs like Little Nightmares over the next five years.

"We’ve already been talking to Hollywood studios at E3 for some IPs."

Hervé Hoerdt, Bandai Namco

“You can’t market ten IPs,” Hoerdt laughs. “Usually, when you run a new IP, you’re not making any profit. Most barely break even, so you create a new universe and then it becomes understood and starts making a profit, allowing you to reinvest in that content. You also can’t do one-shots if you want to take a 360-degree approach.

“Our competitors are now doing fewer, bigger titles, which I understand from a PR perspective, but from a consumer perspective, video games have to be diverse, so we’ll be somewhere in the middle. Ideally, we’d have two or three big titles in various ranges and genres appealing to various audiences in our top tier, and then in tier two, you can have three to five Little Nightmares-type games, for instance. In this portfolio content strategy, we want to bring a cluster of IPs that work well together, so Little Nightmares is there, Get Even is there, and the one we’re working on with Dontnod sits in another direction.”

Of course, this isn’t the first time a Japanese publisher has branched out to court western developers, and Hoerdt points to the efforts of Square Enix as a source of inspiration.

“We’ve been a Japanese company, there’s no doubt about that,” he says. “But the shift we want to make is to move from a Japanese-centric company to a more global company with a Japanese DNA. I think Square Enix, for example, has actually done this quite well through its mergers and acquisitions, and as a competitor, I kind of admire the way they’ve balanced their portfolio. If we could achieve something in that direction, with our own DNA, I’d say we’d sit somewhere between Nintendo and Disney. We’re really proud and excited to work on this as a company.”

EVERY LITTLE HELPS

Hoerdt has reason to be excited, too, as April’s release of Little Nightmares was the first sign that its European strategy was starting to bear fruit. It’s been such a hit, in fact, that Hoerdt predicts it might even be considered a ‘top tier’ title one day if the game continues to grow at its current pace.

“Recently, we reached the milestone of half a million units for Little Nightmares, which is good,” Hoerdt enthuses. “If you compare it to our benchmark, EA’s Unravel, they had a different strategy where they went for the digital-only road, whereas because we have this unique strength to have all territories everywhere, we went for the digital plus boxed road. If we look at digital-only sales, we are below Unravel, but if you combine this with the boxed sales at retail, we are far above, so that’s part of the success.

“Another part of its success is the fan feedback that we’ve received, and the user-generated content, such as the papercraft and the community activities. It’s only the start of it. So, yes, Little Nightmares is obviously one of the franchises we discussed with our Hollywood partners, so in that sense, it’s been successful. From a purely financial view, I don’t think we made a super amount of money, but in the end, we have half a million fans as of today, and it will definitely go above one million as we manage the life cycle. Think about it –
one million people are happily entertained – that’s our reason to be.”

Pictured above: Little Nightmares sold 500k units and “will definitely go above one million as [Bandai Namco] manages the life cycle,” Hoerdt says

Tarsier Studios’ upcoming programme of DLC for Little Nightmares, the second chapter of which is due for release imminently, should certainly help in this respect. But Hoerdt points out there’s still more work to be done when it comes to raising the game’s profile overseas.

“Little Nightmares and the rest of our European portfolio are definitely more popular in Europe, but still, it’s a good start,” he says. “To enter those markets, you either have to have a big IP like Call of Duty, or you need to start from scratch like we’ve been doing. Our Japanese colleagues were very happy with Project CARS, Get Even and specifically Little Nightmares.

“For instance, Little Nightmares has sold over 20,000 units in Japan, more than 10,000 units of Project CARS, and they’re really interested in the new IPs we presented to them at the end of July that I can’t talk about yet.”

Of course, not all of Bandai Namco’s European titles have seen the same success as Little Nightmares. Get Even, for instance, failed to generate the same kind of response, and Hoerdt admits it was “difficult in many respects.”

"Little Nightmares [is] definitely more popular in Europe. To enter those markets, you either have to have a big IP like Call of Duty, or you need to start from scratch like we’ve been doing."

Hervé Hoerdt, Bandai Namco

“First of all, we decided to postpone the game because of the [Manchester bombing] in the UK,” he explains. “I don’t know how much that impacted the sales, but it’s true we had a campaign targeted around May 23rd and we had to postpone everything last minute. We thought that, as much as we’re here to entertain, it wasn’t the right moment to bring this game to market, so this may have affected some of the sales.

“I cannot say the sales are super exciting,” he continues. “But I can’t say they’re a big disappointment either. It sits somewhere in the middle. Farm 51 did a huge job, so they deserve that we do our best, and we did do our best, but overall it was average – average, but in exceptional circumstances.

“Again, we want to do more and reward the studio that has made such a brave choice. It’s easy to enter the market with something that has a recipe that’s easy to sell, but I think our obligation is beyond that – it’s about bringing added value. In that sense, Get Even is really unique.”

GIVING THE NOD

Speaking more specifically about its partnership with Dontnod, Hoerdt tells us the studio is very much one of the “rising stars” of the industry. 

“Dontnod was a kind of rough diamond,” he says. “With the success of Life is Strange, it’s the first big player in terms of its quality, business model and vision, and we think it’s a good strategy that fits. It was the right moment, so we decided to partner with them.”

Indeed, Hoerdt sees no reason why the partnership couldn’t lead to further collaboration between the two companies in the future if the relationship proves productive.

“When you’re building a new franchise, a new partnership usually takes around two years, even thirty months, to go to market,” he says. “We’ve been working with Dontnod on this project for around 12-18 months, but it takes time. We’ll focus on this and do everything we can to make it successful, and if it is successful, I can’t imagine that it wouldn’t generate a wider partnership. It’s far too early to foresee, but I would love to. For me, it’s a really good studio.”

Pictured above: Bandai Namco's new IP, developed by Dontnod, will be a narrative adventure set in a fictional US town

We’ll have to wait until next year before we find out more details about the game – including its name, platforms and release date – but Hoerdt was keen to elaborate on the importance of its US setting. 

“In order to establish a new brand with a western audience, we think locating the game in a fictional place in the US helps to win over the US partners. Part of this choice comes from having this global, worldwide audience in mind. 

“We’re still working on things like story and the characters, but with a studio like Dontnod, you can expect triple-A quality,” he continues. “You can expect very emotional experiences and this is what we’re looking for, with some kind of investigation and going deep into the psychology of the characters, and giving emotion to the player. This is what we’re aiming for with this partnership.”

CONTINENTAL DRIFT

With its eyes set firmly on the west, Bandai Namco looks to be well on its way to achieving its goal of global diversification. While some of its European titles have proven more popular than others over the past six months, partnering with up and coming studios like Dontnod shows there’s still plenty more to come – especially if its new game can replicate even a fraction of the success of its three million sales smash, Life is Strange. 

What’s more, it will be Bandai Namco’s European division leading the charge, as Hoerdt concludes our chat by telling us that Bandai Namco Europe now sits at the heart of the company’s future business plans. 

“I see more opportunities than ever,” he says. “We are building Bandai Namco Europe as the lead company in the group when it comes to creative innovation. Two years ago, we started an innovation process with a small team of around 15 people, and we will extend this to all employees very soon, where we can talk about business opportunities beyond video games.

“We’re in the entertainment business – we’re even contemplating pet entertainment, as crazy as it seems – so there are many projects in the pipeline. If tomorrow there are 200 million coffee machines that are able to provide an experience, we’ll go for that.

“We see untapped markets everywhere, and even from the simplest business perspective, you want to find something new. We have the legacy, the creativity and the DNA to achieve that.”

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