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JRC Seminar (History of Video Game Industry)

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JRC seminar at SOAS, University of London.

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JRC Seminar (History of Video Game Industry)

  1. 1. History of Japanese Video Game Industry Yuhsuke Koyama Shibaura Institute of Technology
  2. 2. Nihon Digital Game Sangyoushi(2016) ▶ Book of History of Japanese Video Game Industry  Written in Japanese  Now on translating ▶ It may be the first book about the history of video game industry in one country.
  3. 3. 3+1 Markets (or platforms) Arcade PC (online) Console Mobile Phone 21st Century New! Arcade 20th Century 70s~ PC (Standalone) 80s~ Console 80s~
  4. 4. Origins of game companies Arcade Console (Toy) Other Online Service PC (Before Internet)
  5. 5. Periodization in history Dawn 2D era 3D era Handheld era Smartphone era
  6. 6. Important events of Japanese game industry ▶ Five turning point of history  Dawn: Space Invaders (1978)  2D era: Family Computer (NES) (1983)  3D era: PlayStation (1994)  Handheld era: Nintendo DS & PlayStation3 (2004 & 2006)  Smartphone era: Puzzle & Dragons (2012)
  7. 7. Dawn Space Invaders (1978)
  8. 8. History summary (1) dawn and 2D era 1. In 1970s, Video Game industry began in arcade. 2. In 1980s, Also began in PC and home console. 3. The market leader of two eras was arcade. 4. Game graphics technology was 2D. 5. Game supplied with ROM cartridge for consoles. Arcade 70s~ PC 80s~ Console 80s~ Leader!
  9. 9. Summary in 1970s. 1972 (PONG) Arcade 1975 1977 1978 1979 PC Console (Apple ][) (Atari VCS) TV Tennis 1976 (BREAKOUT) First PC in Japan (1978) 1980 Game&Watch Golden age of Ele-mecha Starting the history of Japanese game industry Single function console era: no imported game consoles hit in Japan Block Kuzushi Inadequate performance and there were no influential works
  10. 10. Arcade Games Companies ▶ Some companies have long history.  Founder was non Japanese.  SEGA: Established in 1931 at Hawaii.  TAITO: Established in 1951.  NAMCO: Established in 1955. ▶ Coin-operating amusement machine industry  Pinballs, Juke box, Peanut vender, Electric horse,…  They sold Ele-mechas to “game center”s.
  11. 11. Sega’s Jukebox (1970) Photo: Koyama, at a bar in Shinjuku
  12. 12. Three titles that established arcade game industry in Japan ▶ Block kuzushi (1977) ▶ Space Invaders(1978) ▶ Galaxian(1979)
  13. 13. Block kuzushi (1977) ▶ A name of genre for the illegal mimic of Atari’s BREAKOUT. ▶ Japanese arcade game industry studied the production of arcade game machine through developing Block kuzushi. ▶ CPU was not used in most of Block kuzushi games including BREAKOUT.  Game programs were physically realized using logic circuit. Breakout (Atari, 1976)
  14. 14. Space Invaders (Taito,1978) ▶ First original game using CPU in Japan  Midway’s 8080 mainboard  Developed by Tomohiro Nishikado, TAITO ▶ 300,000 illegal copies  100,000 original  100,000 lisensed ▶ Many “Invader House” and “Game Center” were everywhere in Japan
  15. 15. NHK’s News Clip ▶ https://www2.nhk.or.jp/archives/tv60bin/detail/inde x.cgi?das_id=D0009030166_00000
  16. 16. Galaxian (Namco, 1979) ▶ Establish the basic architecture for arcade games and home consoles.  2D Graphics architecture  BG Screen + Sprite
  17. 17. Architecture of 2D graphics Virtual Screen 1 Virtual Screen 2 Virtual Screen 3 Sprite Layer Structure the screen by stacking virtual screen and sprite layer
  18. 18. 2D era Family Computer (1983)
  19. 19. Summary in 1980s. Arcade 1983 PC Console 1990 Amusement Business Act (1984) UFO Catcher Hang On (1985) Social Problem Leisurelandization PC-8801mk2SR(1985) PC-9801VM(1985) Nintendo’s Famicom decided the basic business model. Although RPGs and ADVs had strength, market began to shrink in 1990. (1983) (1985)(1983) (1989) (1990)
  20. 20. Home Consoles ▶ Some consoles were imported but not hit.  VCS (Atari), Channel F (Fairchild), Studio II (RCA), … ▶ Cassette Vision (1981, Epoch )  First hit in the cartridge style console (300,000). ▶ July 15th , 1983  Family Computer (Nintendo)  SG-1000 & SC-3000 (SEGA)
  21. 21. Cassette Vision (1981, Epoch) Source:Wikipedia(JP)
  22. 22. Family Computer (Nintendo) SG-1000/SC-3000(SEGA) Wikipedia (JP)
  23. 23. 8-bit Console Sales(million) 0.45 1.65 3.74 3.9 1.78 0.21 0.25 0.31 0.19 0.18 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 1983 1984 1985 1986 1987
  24. 24. Family Computer ▶ Overwhelming high performance. ▶ Important chips were designed exclusively for cost reduction.  Integrated 6502 CPU & sound function.  PPU (Picture Processing Unit) ▶ Third Party supplied various games.  Hudson, Namco (1984)  Konami, Taito, Enix, Bandai,…(1985)
  25. 25. Third Party Control NintendoGame Company Factory Cartridge production request License Fee Royalty contract Pay all in advance Game Company Nintendo Cartridge production request Factory OEM contract Business Standard
  26. 26. 1987 1988 1989 1990 1991 1992 1993 1994 1995 PCE 0.6 0.83 0.92 1.27 1.03 0.67 0.4 0.1 0.02 MD 0.2 0.6 0.9 0.7 0.4 0.45 0.1 0.03 SFC 0.66 3.15 3.58 4.43 2.65 1.78 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 Next Generation Battle (million) PC Engine (1987) Mega Drive (1988) Super Famicom (1990)
  27. 27. Summary (1) Dawn and 2D era
  28. 28. Performance Image of arcade, home console and PC Graphic Performance Computational power Data size Arcade Home Console PC
  29. 29. Image of Innovation Trajectory Total Performance Arcade 78 81 83 90 93 9485 PC PC-8801 PC-98VM PC-9821 Home Console
  30. 30. Summary for dawn and 2D era ▶ Three markets are separated and have own strength. ▶ PC:higher age group, high screen resolution, possible to save  ADV, RPG, SLG ▶ Arcade: High performance, aggressive innovation  Action, shump, Fighting,…  Large cabinet game: race, body sensation games ▶ Console: lower age group, many users  Performance: Degraded version of arcade game machine  Released game: any genre
  31. 31. 3D era PlayStation
  32. 32. 2D vs 3D Final Lap R (Namco, 1993) Ridge Racer (Namco, 1993)
  33. 33. 光源ight Source 3D Graphics
  34. 34. History summary (2) 3D era 1. PlayStation (1994) changed the world and the market leader became home console. 2. Arcade was down, PC was nearly extinct. 3. 3D graphics 4. Games were supplied by disk, game price declined 5. PC online game is born, but Japan is weak. Arcade PC
  35. 35. Summary in 1990s. Arcade 1994 PC Console 2000 1993 Print Club (1995) DDR (1998) Virtua Fighter and Ridge Racer were the last glory. 1996 PlayStation change the world! Non-adult, standalone PC games become extinct at most without indies. Win95 broke the language barrier 1998 (1998)
  36. 36. PlayStation ▶ Firstly, “Play Station” was a codename for the CD-ROM integrated Super NES. ▶ Sony decided to develop a game console alone ▶ Development Goals 1. World-class graphic workstation 2. Within ¥39,000 (300 GBP) 3. Game: within ¥5000 by CD-ROM ▶ Simple board design, few parts  winning price competition with Saturn Win!
  37. 37. Impact of new generation (1) Change of the innovation leader ▶ Arcade game developers did not have enough skill  They could neither design system board using 3D graphics nor develop 3D graphic games.  Only Namco and Sega could do both in Japan before PlayStation released. ⇒The privileged position of the arcade game was lost & Console became the innovation leader.
  38. 38. Impact of new generation (2) Cost Structure ▶ Disk media reduce the price of games.  ROM Cartridge: more than 10000 JPY (= 67 GBP)  Disk Media: less than 6000 JPY (=40 GBP) ▶ The share of the game company did not change.  About 3000 JPY (=20GBP)
  39. 39. Change in power balance ▶ After PlayStation (1994), technology driver in computer was game console for more than 20 years. ▶ After Windows 95, PC performance increase rapidly. ▶ Arcade become inferior in performance.  3D graphic game board was very difficult to design.  Console compatible board becomes mainstream.  Sony sold PlayStation compatible boards to game companies.  NAOMI (DreamCast compatible board,SEGA) is popular for many game developers.
  40. 40. Handheld Era Nintendo DS & PlayStation3
  41. 41. History summary (3) Handheld era 1. In home console, profitability declined due to soaring development costs. 2. Handheld console reversed home console in 2006. 3. Japanese game were not sold well overseas. 4. Mobile phone appeared and social game was a severe social problem because of gacha (= loot box).
  42. 42. Summary in 2000s. 2004 2008 Handheld market reversed console market in 2006 2001 1999 2002 Since 2003 when QVGA liquid crystal generalized, mobile phone games became popular. The non-social game market saturated around 2010. 2002 for PS2 and PC Most Japanese game companies have failed to enter online games. 2008 Console Item charge gradually popular 2006 The casual revolution of Wii failed. Japanese company lose international competence . 2006 2003
  43. 43. Home game market (billion JPY) 0 200 400 600 800 1000 1200 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Japan North America Europe Lehman Shock DS effect
  44. 44. Soaring development costs http://cdn4.wccftech.com/wp-content/uploads/2013/09/Game-Budget.jpg
  45. 45. Package arts: Dragon Warrior and Dragon Quest Image source:DQ http://dqmuseum.jp/sp/history.html DW:Wikipedia(en)
  46. 46. Sustainability Crisis in home console Console Release Retail Price Estimated Cost Difference PlayStation2 2000 ¥39,800 $299.99 (US) $440 -¥5000 Xbox 2002 2001(US) ¥34,800 $300(US) $323 -¥2500 Xbox360 2005 ¥39795 $400 (US) $525 -¥12500 PlayStation3 (20G) 2006 ¥49,980 $500 (US) $805.85 -¥30000 (200GBP) Wii 2006 ¥25,000 $250 (US) Less than ¥15,000 +¥10000
  47. 47. Technology development image (home console and stationary devices)Total Performance 1995 1998 2000 2006 2013 PC Home Console Arcade
  48. 48. 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 DreamCast 0.49 1.01 0.39 0.2 0.06 PlayStation 4.31 2.55 0.81 0.28 0.23 0.03 PlayStation2 3.43 4.09 3.92 2.93 2.59 2.12 1.25 0.76 0.46 0.2 0.09 0.07 PlayStation3 0.61 0.89 1.04 1.78 1.68 1.55 Nintendo 64 1.19 1.12 0.27 0.1 GameCube 1.2 1.08 1.1 0.42 0.19 0.04 Wii 1.14 3.85 2.8 1.93 1.73 0.99 Xbox 0.04 0.08 0.04 0.02 Xbox360 0.12 0.2 0.25 0.4 0.36 0.25 0.12 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 Home Console Sales (million)
  49. 49. Background: Aging Population
  50. 50. Game software sales (million) Source: Game industry white paper DECADE 0 10 20 30 40 50 60 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Home Console Handheld Console
  51. 51. 0 1 2 3 4 5 6 7 8 9 10 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 GB GBA DS GG WS PSP Handheld Console Sales (million units)
  52. 52. Number of companies that released the game 0 10 20 30 40 50 60 70 80 90 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 GBA DS PSP PS2 GC PS3 Wii Xbox360 Developer shifted to the handheld consoles.
  53. 53. Smartphone Era Puzzle & Dragons
  54. 54. History summary (4) Smartphone era 1. Smartphone and Puzzle & Dragons (Gung-Ho, 2012) changed the industry. 2. The market size of mobile phone games pulled out that of home console games in 2012. and it was more than 3 times in 2017. 3. Japan do not adapt to the new trend, such as e- sports or game commentary. 4. Loot box problem all over the world.
  55. 55. Social Problem: High expenditure Nihon Keizai Shimbun June 22nd ,2012 4 millionyenfornetgames Counseling to consumer center on online games is increasing ¥4,000,000 =£27,000
  56. 56. Summary in 2010s. 2012 2016 Puzzle & Dragons changed Japanese game industry!! 2011 No gacha but profitable 2014 The presence of STEAM platform is increasing.
  57. 57. Mobile & Smart phone Shift Handheld Console Mobilephone Smartphone 2004 DS / PSP 2006 Structural Change Handheld console > Home Console Non-social game market almost saturated 2007 Increase social game release 2008 iPhone sales started in Japan 2011 3DS / VITA Price cut during the same year (3DS) Peak of social game boom Social problem Smartphone market share exceeds 50% 2012 Guidance of Consumer Agency to Complete Gacha Puzzle & Dragons Structural Change Smartphone > Mobilephone 2016 Switch Pokémon GO
  58. 58. Smartphone VS Handheld ▶ Production Cost: three hardware released in 2011  iPhone4S: $188  Nintendo 3DS: $101  PS VITA: $159.1 (without memory card) → iPhone has better performance from release ▶ Difference in unit sales  iPhone Sales (2018,1Q): 77 million units  Nintendo 3DS total sales: 72 million units → Overwhelming difference for install base ▶ There is no reason to purchase game consoles today!
  59. 59. Drastic Market Shift to Smartphone the case in KLAB inc. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Sep-Nov Dec-Feb Mar-May Jun-Aug Sep-Dec Jan-Mar Apr-Jun 2012 2013 2014 App Store Google Play Mobage GREE mixi Other Smartphone Mobilephone PC
  60. 60. Puzzle and Dragons (Gung-Ho, 2012) ▶ First Hit on Smartphone ▶ Historical big hit  20% of game sales in the first half of 2013 is Puzzle and Dragons  Monthly profit: 7.0 billion yen to 10 billion yen at the peak  In home console game case, more than 2 million packages are sold every month. ▶ Revenue source: Gacha by Gachi-zei  Gachi-zei: Serious? players
  61. 61. Example of Gachi-zei Are you the Gachi-zei of Puzzle & Dragons? I'm putting my life on Puzzle & Dragons. If you’re Gachi- zei, reply by 10th. If no reply, I will resolve friendship with you. It is sorry, I am serious. In Pazzle & Dragons, a player can send a message only once to a friend.
  62. 62. Gung-ho's Sales & Operating income (1 billion yen) 0 20 40 60 80 100 120 140 160 180 2011 2012 2013 2014 2015 2016 Sales Operating income Release Puzzle & Dragons in 2012 Puzzle &Dragons related sales 88.6% of the total (2015)
  63. 63. Why so profitable? Service as a game Package Games Item charge games Demand Price=Willing to Pay 0 Sales Demand Price=Willing to Pay 0 Sales
  64. 64. Technology development image (handheld device) Total Performance 1999 2000 2004 2008 2011 Mobilephone Smartphone Handheld Console
  65. 65. Total Summary Inter market competition
  66. 66. Arcade Home Console PC the 1980's to the early 1990's Graphics Performance Computational capacity Data size Arcade Home Console PC Graphics Performance The late 1990‘s to the early 2000's Computational capacity Data size Arcade Home Console PC Graphics Performance Current Situation Computational capacity Data size Convergence of performance Today there is little performance difference among platforms.
  67. 67. Home Console VS PC Inter-market competition Handheld Console VS Smartphone VS VS
  68. 68. Digital Convergence ▶ PC merges…  TV  Video Recorder  Audio equipment  Word processor (in Japan)  Phone ▶ Smartphone merges…  PDA (Personal Data Assistance)  Music Player  Digital camera  Video Camera  Watch Game dedicated console is the last resort!
  69. 69. What kind of demand is still existing for game consoles? 1. Parents whose children are too young to have a mobile phone 2. Manias who are not satisfied by smartphone games 3. People with low operating skills on PCs and smartphones 4. A person trying to use it for entertainment at a party
  70. 70. Today’s Summary (1) 1. The Japanese video game industry became conservative due to the successful home game market, and failed to enter the emerging market such as online game market. 2. As computer performance rose, the difference in the artwork preference became clear. This is why Japan could not get the position in the growing European and North American markets.
  71. 71. Today’s Summary (2) 3. Japan is now behind the West in terms of technology. People with project management or advanced design skills necessary for large- scale development were inadequate. There are few universities teaching game development in the Japan. Also, Japan have relied on spontaneous genius such as hacker boys. As a result, few people in video game industry receive advanced education up to graduate level.
  72. 72. Today’s Summary (3) 4. From these results, the Japanese gaming industry flowed to easier way, social games / smartphone games where the technical value is not so much needed, high value is given to animation-like pictures. Some companies have gained high profits, but there are also many moral problems.
  73. 73. My Impression throughout the history of the Japanese game industry ▶ The story of the fall of Japan. ▶ To me, the Japanese gaming industry and the US automobile industry seem to overlap.  It was respected as No.1 in the world.  However, it could not adapt to changes in the environment.
  74. 74. Game Over I appreciate getting into my poor Eng”r”ish
  75. 75. Appendix Price Discrimination Why is item-based game high profit?
  76. 76. How to gain more profit from a game ▶ Roughly two ways  Increase new users  Increase customer unit expence ▶ Increasing new users is very difficult  New title can not sell well  Even sequels reduced sales  Budget of advertising is very limited → There is no way to raise the unit expence per customer
  77. 77. Product characteristics of video game ▶ Situation is a kind of Monopolistic Competition ▶ Preference is very strong  Some users do not need it even for free → There is no simple price competition ▶ Consumers have royalties on game titles  Even if raising the price, quite a few consumers follow ▶ Each user has a "reasonable" line & purchase a game if price is cheaper than his/her price line
  78. 78. Demand curve in video game ▶ Demand curve  "Distribution of latent consumers in order of maximum payable amount" ▶ Purpose of the game company  Make profits under this environment  Maximize if possible Number of people (demand) Maximum amount consumer can pay 0
  79. 79. Package game business: Large opportunity cost ▶ Sell to all at the same price  Large loss profit ▶ Loss profit: 2 kinds  He bought higher price...  Hatched in blue  If cheaper, it was sold ...  Hatched in red Sales Maximum amount consumer can pay 0 Part where sales can not be collected Number of people (demand)
  80. 80. Price Discrimination Strategy ▶ Increase sales by presenting individual prices for each customer  High price for customers who pay even for high prices  Low price for customers who do not buy at a low price ▶ Price Discrimination in Package game:3 kinds  DLC (Download Contents)  Limited Edition  Low price edition  Low price edition is also a competitor for the second-hand game package
  81. 81. Price Discrimination Strategy in Package Game Number of people (demand) Maximum amount to pay Sales DLC Number of people (demand) Maximum amount to pay Normal Edition Limited Edition Number of people (demand) Maximum amount to pay First Version Low Price Version (1)Download Contents (2)Limited Edition (3)Low Price Version
  82. 82. Characteristics of Social Games ▶ Sell “Service” rather than the package  Sell play experience and convenience during play  While consumers are playing, it is a revenue opportunity ▶ Small price discrimination is possible because minimum charging unit is small  10000 yen from those who can pay 10000 yen  100 yen from people who want to try only 100 yen
  83. 83. Price Discrimination Strategy in Social Games ▶ Very small charge unit → Depending on the direction, it is possible to have the upper limit be paid by himself / herself → Possible to make all of the triangle's area into sales Sales Number of people (demand) Maximum amount to pay 0
  84. 84. Summary: item-charging business model 1. Basic charge free: attracting a large number of potential customers 2. Price discrimination much more finely than package 3. the core of the business moves 1. Payment: Consideration for game experience 2. From Package to Service: Game as a Service
  85. 85. Expansion of maximum amount by 'directing‘? ▶ Design that allows players feel comfortable / enjoyable by charging ▶ Developer's remarks at CEDEC to design game difficulty if a player charge monthly…  5000 yen: he/she feels “I am strong!”  30000 yen: Almost invincible Number of people (demand) Maximum amount consumer can pay 0 Increase payment more than reasonable behavior with various directing
  86. 86. Gacha and Prospect Theory(1) ▶ In the knowledge of behavioral economics, especially “Prospect Theory”, human behavior in item-charged game can be explained to some extent 1. Humans do not calculate the loss by "the total amount of loss (gain)" but "difference from reference point" → By collecting 300 yen each time, shift the reference point every time. Feeling "just 300 yen put out" → finally to 100,000 yen.
  87. 87. Gacha and Prospect Theory(2) 2. Evaluation of gain/loss: As it goes away from the reference point ...  Gain: the growth rate of plus evaluation weakens (decreases)  Loss: Increase in negative rating growth (gradual increase) → Since the sense of repulsion strengthens when expenditure per turn becomes expensive, it keeps it cheap (about 100 yen to 300 yen)
  88. 88. Gacha and Prospect Theory(3) 3. For phenomena with small probability, humans tend to estimate the occurrence probability excessively. In other words, in response to the phenomenon of "nearly 100%" it responds excessively to "not 100%" and responds excessively to "little probability" phenomenon "probability is not zero“. → The user is more likely to think that "Rare item may be hit by Gacha" more than the actual probability
  89. 89. Slides not used due to time
  90. 90. The prehistory of Japanese video game industry (1) ▶ First video game in lab  OXO on EDSAC in UK ▶ Industrial games were born in the U.S.  Arcade: Computer Space(1971), PONG(1972)  Console: Magnabox Odyssey(1972) , Atari VCS (1977, later called Atari 2600) Magnabox Odyssey Atari Video Computer SystemOXO on EDSAC (emulation on MAC OS) Photo: Wikipedia (EN, JP)
  91. 91. The prehistory of Japanese video game industry (2) ▶ Two markets collapse  Crash of 1977: market crash for consoles using PONG chip  AY-3-8500 (General Instruments)  Crash of 1983: called “Atari Shock” in Japan  Large stocks were buried in New Mexico's desert. =>Japan becomes a leader in the game industry. http://americanhistory.si.edu/blog/landfill-smithsonian-collections-et-extra-terrestrial-atari-2600-game
  92. 92. Elemecha ▶ Generic term for electromechanical playthings  Elemeca with electric + mechanical ▶ MiniDrive (1959)  Kansai Seiki Seisakusho Co., Ltd.  Established in many department store rooftops ▶ Kansai Seiki Seisakusho Co., Ltd.  No.1 company at the time  Could not adapt to computerization Source:http://www.ne.jp/asahi/cvs/odyssey/creators/kasco/2p.html
  93. 93. Slides not used in 2D era
  94. 94. Arcade (1) Crisis ▶ Fuzoku Eigyou-hou (Amusement Business Act,1984)  Gambling machine problem  Youth delinquency problem ▶ Sharp decline in market size  Family computer (1983)  Amusement Business Act (1984)
  95. 95. Arcade Operation Sales (Billion JPY) Source: Leisure White Paper 1993 Edition 450 457 479 408 340 326 349 402 474 561 600 0 100 200 300 400 500 600 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992
  96. 96. Social reputation at the time Police White Paper (1984) May 17, 1979 Asahi Shimbun Conscience shot down Juveniledelinquency Adultsalsogowrong
  97. 97. Arcade (2) Recovery ▶ Image Recovery through Leisurelandization  Taikan Game (Bodily Sensation Game)  Sega: Hang On (1985), Outrun (1986), After Burner (1987)  Crane Game: UFO Catcher (Sega, 1985)  Street Fighter II (Capcom, 1991) ▶ Active innovation  FM sounds, 3D Graphics, large cabinet
  98. 98. Hang On & UFO Catcher (1985) Source:http://sega.co.jp/about/history/
  99. 99. Why PC games shrinked? ▶ Various reasons  Sluggish PC diffusion  Around 10%  Rental and illegal copy  Low performance & Higher price ▶ Only adult games grew. 11.7 9.7 11.6 10.6 11.5 12.2 11.9 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 1987198819891990199119921993 PC penetration rate
  100. 100. PC platform 8bit Hobby PC 16bit PCGaming PC PC-8801 (NEC) X1 (Sharp) FM-7 (Fujitsu) PC-9801 (NEC) (Various companies) During 1983~1987 During 1988~1992 Lose market Share De facto standard in PC X68000(Sharp) FM-TOWNS(Fujitsu) De facto in 8bit New generation
  101. 101. Games for 8 bit PC: PC-8801mk2 SR Ys2(1988) Disappear in Okhotsk(1984) HYDLIDE(1984) Source:Project EGG http://www.amusement-center.com/project/egg/index.shtml
  102. 102. Games for PC-9801VM Software and Hard story(1988) DAIVA: LIGHT OF KARI YUGA (1988) CYBERNETIC Hi-SCHOOL III Aim for the Top GunBuster (1990) Early games were the same as PC-88, but there were many games with beautiful screens. Among them, simulation games and visual novel games are unique to 98. In later years, the majority to be released became bishoujo (or R-18) games. Source:Project EGG http://www.amusement-center.com/project/egg/index.shtml
  103. 103. Sales Ranking March 1985 Title Company Genre 1 Lode Runner Sony, Softpro, Systemsoft ACT 2 The Fire Crystal BPS RPG 3 Baseball crazy Hudson ACT 4 VOLGUARD dB-SOFT ACT 5 Plasma line Tecno-SOFT ACT 6 LEGENDS OF STARARTHUR III T&E SOFT ADV 7 The Black Onyx BPS RPG 8 Professional Mah-Jongg Chanoir TBL 9 Chack'n Pop Nicodem-Carry ACT 10 Tiny Xevious DEMPA ACT Foreign title Arcade game transplant In game magazine Beep March 1985
  104. 104. Summary of PC games ▶ The influence from overseas was limited.  Users wanted to play action games like Space Invaders.  A lot of arcade game hit titles in Japan were transported.  Few titles were ported and hit.  Exception: Lode Runner ?  RPGs were too difficult for direct transplant, necessary to localize => ARPG such as HYDLIDE and Ys series. ▶ PC-98VM (1985) had become de facto standard  Technological innovation stagnated for nearly 10 years  Because of the software compatibility
  105. 105. Non Adult PC Game Market (billion yen) 9 11.1 12.9 14.5 15.6 19.5 15.8 17.2 17 0 2 4 6 8 10 12 14 16 18 20 1985 1986 1987 1988 1989 1990 1991 1992 1993 Market size of PC Games is only 1/20 of Console games
  106. 106. PC-9801 Series ▶ Originally for office use  Digital 8 color  No sound: Beep only ▶ Game Use: VM(1985) and later  640*400, analog 16 colors  Reference model as PC-9801 series ▶ Since the 1990s, PC game companies withdrew one after another and PC game market shrinked.  Only adult games released Source:http://121ware.com/navigate/learn/pcmuseum/index.html
  107. 107. Arcade (Sega System16) Home Console (Family Computer) PC (PC-9801VM) Graphic Solution 320×224 256×240 640×400 Dedicated CRT Colors 4096 colors 25 in 52 colors 16 in 4096 colors Sprite Function Up to 128 in screen Scale possible Up to 64 in screen Up to 8 in line No Sprite Function Well-played game genre Action & Table Genre satisfied with short playtime Compromise of arcade and PC, but close to arcade SLG,ADV,RPG Genre playing for a long time Play Time Extremely short (1 play 3 minutes) Compromise of arcade and PC Long time (Using floppy disk) Sales Form Coin Operation (100 JPY/play) Package Sales (About 5,000 JPY) Package Sales (Up to 10,000 JPY) Platform innovation speed Very fast Significant innovation once in a few years Stagnation for game technology
  108. 108. Slide not used in 3D era
  109. 109. Modularization in game development Hardware Hardware Game Application Hardware Game Application OS,Driver, Middleware Dawn 80's - first half of 1990's Late 90's - Currently
  110. 110. Programing environment Source: "Survey research on advanced technology development of digital content production", 2010 Virtualization Hardware Time Hardware Hardware Hardware HardwareAssembler Assembler Assembler AssemblerC language + Library C++ Objective System C++ Objective System Game Engine Middleware 80s 90s Late 90s~00s Late 00s~2010
  111. 111. Large scale development 0 50 100 150 200 250 DQ1 DQ2 DQ3 DQ4 DQ5 DQ6 DQ7 DQ8 Scenario Game Design Graphics Music & Sound Programmer Engineer Other development Staff Test Play QA Sales promotion
  112. 112. 53.4 67.2 76.3 85.3 92 97 107.6104.4 97.3 86 3.6 4 3.5 3.3 3.1 2.9 2.5 2.2 1.7 1.1 1.4 6 12.9 36.7 0 20 40 60 80 100 120 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Package Sales Operation service sales data from Digital content white paper Market Scale of PC Online Games (Billions JPY) Source: JOGA Online Game Market Research Report Yearly Version from 2005-2014 Digital content white paper from 2001 to 2004
  113. 113. Monthly average sales per online game billing player (yen) 2004 2005 2006 2007 Flat-rate billing game 1437 1338 1554 1223 Item Charging Avatar Charging 4278 4438 4385 4676 Source: "Online Game Market Statistics Report 2007"
  114. 114. Billing form of online game (including non-PC) 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2004 2005 2006 2007 2008 2009 2010 2011 2012 Item Charge Free download Source: "JOGA (Japan Online Game Association) Online Game Market Research Report 2013"
  115. 115. Slide not used in Smartphone era
  116. 116. Market Size(billion yen) 0 200 400 600 800 1000 2012 2013 Home Console Arcade(Video Game+Music Game) PC Online Mobile Phone Smart Phone
  117. 117. Mobilephone game (including avatar) and social game market trend (billion yen) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Social Games 0.5 6 15.7 44.7 138.9207.8 ordinaly Mobile Phone Game 9 20.1 27 41.2 58.9 74.8 84.8 86.9 88.4 82.2 57 0 50 100 150 200 250 300
  118. 118. Regulation on “Complete Gacha” ▶ Complete Gacha  By assigning all the rare items specified in Gacha, players can get special items  Each rare item appearance probability: low  Usually less than 1%  Some enthusiasts tried Complete Gacha and expended hundreds thousands yen. ▶ Consumer Agency announces the view that "Complete Gacha violates premium display law“  Not regulate gacha itself
  119. 119. From “Pay to Win” to “Free to Play” ▶ Traditional Social Game: Competition → billing  Fight with ranking fee and direct interpersonal battle  “Pay to Win” model ▶ Recent: Free to Play  Focus on individual achievement & few interaction with friends  Elimination of competing factors ▶ Play with no charge, with confidence  The same system as past Social game (stamina system), but play enough with no charge  It does not change that Gacha is at the core of business
  120. 120. Kantai Collection (2013) ▶ PC Browser Game (Android version 2016) ▶ Game Design not to act “Pay to Win”  There is no "pay only" or "superior person limited" that makes game play advantageous  "Gacha"-like behavior is very difficult  Game design to play as almost standalone http://www.dmm.com/netgame/feature/kancolle.html
  121. 121. Loot Box problem ▶ Paying a loot box is a kind of gamble? ▶ Stance of economic policy corresponds to the loot box problem  UK, US, and Japan: no gamble  Lessez-faire & self responsibility  Continental Europe: gamble  Paternalism
  122. 122. Game Design Trend in Online Games Acting Interacting Player World Kancolle Puzzle & Dragons MMORPG Social Game Casual Game Late 90's - Early 00's Late 00’s Early 10’s The era goes around? Pokémon GO? Using Bartle’s 4 categories AchieversKillers Socializers Explorers
  123. 123. Reference ▶ https://www.irasutoya.com/ ▶ Wikipedia JP/EN  Photos of Game Console  Logos of game companies

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