Winning over the West

With a new name and a wealth of recently announced software, Tecmo Koei is preparing to dramatically increase its presence in the West. Christopher Dring speaks to Koei CEO Kenji Matsubara on the merger and the publisher’s plans for Europe and the US…

What was behind the decision for Koei to merge with Tecmo?
We immediately began considering the merger after Square Enix had revealed their proposal for the company.

And why did Tecmo choose to align themselves with you over Square Enix?
After contemplating this from many perspectives – such as securing talented staff and development environment, as well as continuing its brand expansion and improving its corporate value – Tecmo chose to merge with Koei.

So what do you feel Tecmo can bring to your business?
We want to focus on the synergy we can bring about by working together. On top of that we need to improve our presence in the West, ensure a higher percentage of sales there, combine our strengths and make a new IP which will become the pillar of support for the two companies. We also need to focus on business and management, and make sure that synergy exists in these areas.

Considering the current climate in Japan, how important have Western territories become to Tecmo Koei?

As the console market is expanding in the West, it is shrinking here in Japan. The Western market is six times larger than that of the Japanese one, and it looks as if it’s going to continue its growth and further widen the gap. Accordingly, our expansion into the Western market has become the most important part of our mid-term plan.

What are the challenges for publishers in Japan?
The main challenges are improving development skill, technology and effectiveness. There are many things that can be learned from the Western makers that lead the way on the 360 and PS3. Improving the development skill, technology and effectiveness really depends on each individual maker’s efforts, but generally speaking, all Japanese developers really need to tackle these issues.

What’s the goal of Tecmo Koei Europe?
The European video game market is expanding very rapidly. Our goal is to establish ourselves as a major publisher in this market. Our European business is not so big at the moment, but we see many many opportunities for us to expand the business, and this is why we’ve established Tecmo Koei Europe.

With this office we want to establish major brand image and also major publisher status in Europe.

How are you looking to grow your Western business?
Firstly, it is important to have our developers collaborate with sales and marketing in our overseas offices, have them understand the preferences of users in those regions and, rather than localising games, we need to focus on culturalising them from the very beginning of development. 

Secondly, we need to make sure that Legends of Troy, which is developed for a more Western taste by our Canadian studio, is a success.

Finally, we must synergise and improve our presence with Tecmo in the West.

Koei and Tecmo are not so small companies, but compared with other publishers in the Western market we are still quite small. We already have some big brand titles like Ninja Gaiden, Dead or Alive or Dynasty Warriors, but to be a major player in Europe we need new intellectual properties. So we will release new IP and reinforce our existing brand titles. That is our strategy.

Any plans to expand offices and hire new staff?
Next April in Japan we plan to hire between 60-70 new staff.

What about in the UK? You have quite a small office here, would you be looking to open a bigger one in the future?
This depends on the business. It’s not easy in the UK, our first strategy is to expand our titles and our pipelines and then we can expand our sales offices. But at the moment we have good partners in the UK, so we will focus on these relationships.

Would you be interested in acquiring any Western publishers?
Not at this moment in time.

So what about buying any development studios?
Not at this moment in time. Our first and foremost aim is to ensure that our Canadian studio can make titles aimed at the Western market.

You’ve said how keen you are to grow the Dynasty Warriors franchise inside and outside of Japan. How do you hope to do this?
In regard to this, we are going in two directions. Firstly, to expand the Warriors engine with the combination of unique and interesting content such as that of Gundam, as in Dynasty Warriors Gundam series. Secondly, to continue expanding on the series numbering titles, and to further improve the simple, yet exciting Warriors formula.

SCE was at the Tecmo Koei Europe press conference. How important is your relationship with Sony?
We are discussing various opportunities with Sony Europe. In Japan we have a long history with Sony, and we have a great relationship with SCEA. So when we began Tecmo Koei Europe we were quick to establish a strong relationship with Sony Computer Entertainment Europe, because they understand our business.

You are known for your hardcore games. But casual games are very popular, especially in Europe. Will you be looking to target a more mainstream audience?
We are very interested in casual games. But at the same time it is a very tough market. Koei and Tecmo are very good at targeting core gamers. But to expand our user base, it might be worth looking at casual gamer. But we understand it’s very tough and other publishers are already established in that market.

So at this moment our strategy is, based on our core fans, to expand into the casual games space.

Which Tecmo franchise excites you the most?
Ninja Gaiden and Dead or Alive are very important, and we want to see further ones. We have Quantum coming and Metroid coming, in collaboration with Nintendo. And these franchises are all really excited.

So what is Tecmo Koei’s stance on the future of the games market? Do you view digital as a key trend?
Technical improvement in terms of hardware and software, and also user increase and diversification, will continue to evolve. Also, this industry will be reinforced with the activity of online services, such as cloud computing. Personally, my goal is to get more and more people playing games and be able to enrich people’s hearts and minds through creating new titles.

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