[In this editorial, originally printed in the October 2010 issue of Game Developer magazine, EIC Brandon Sheffield discusses the conundrum the Japanese game industry faces, examining how smaller stores' fightback against the might of Wal-mart could present lessons for Japanese developers.]

As I write this, I’m in Japan for the Tokyo Game Show, and as such I’ve had the opportunity to speak with a number of Japanese developers in the last few days.

One question on everyone’s lips is “how do we appeal to the Western market?” It’s understandable—the Western market is huge, and the hardcore HD gamer in Japan is becoming less and less common.

Though this is anecdotal rather than empirical, I would submit that part of the reason Japanese hardcore gamers are on the decline is that while Western gamers grew up loving games, and have continued to find them a viable means of entertainment, Japanese gamers that grew up with the NES/Famicom now find those old games to be “nostalgic,” but have moved on to other leisure activities. However, on this side of the pond we’ve stuck with games well into our adulthood.

Wal-mart: The Great Evil

In one particular discussion, I mentioned that Japanese game companies needn’t hide their cultural background and different nature when making games for the West, as they often try to. It’s similar to the debate about Wal-mart killing all the local businesses.

The fact is, yes, Wal-mart kills local grocers, clothiers, and appliance shops when it moves into an area. It does this by providing a greater variety of products at a cheaper or comparable price, all in one location. The trouble is, if your market is general, like many of these mom and pop stores, someone will always be able to do that better than you, faster than you, and more efficiently than you, provided they have the backing to do it.

While I absolutely do feel for the mom and pop shops that got closed down when Wal-mart rolled in with its poor wages and sub-par product, I understand why people choose convenience over the principle of supporting local business. People will always do what’s easier for them.

But then, there are the niches. If you want to get the right kind of bait or tackle or fishing rod, you’re not going to go to Wal-mart, you’re going to go to a specialty bait shop. If you’re into model trains, you’re going to go to a shop that specializes in that. If you like comic books, you’re definitely not going to be sifting through the romance novels at Wal-mart to try to find the latest James Kochalka zine.

What Wal-mart can’t do is cater to specific tastes. If what you’re doing is very generalized, someone will always be able to do it better. But if you’re a specialist, by definition you’re equipped to understand that niche better than Wal-mart could ever hope to, or even desire to.

Wal-mart doesn’t want to be the best seller of model trains. Wal-mart wants to make the most money with the least effort. If you love trains, you’ve got a niche you can fill, with the right amount of skill and exposure.

Get In the Niche

There are two types of Japanese games that have done well in recent years. There are those games that are simply very solid, but don’t necessarily appear to be from any particular country. Games like Street Fighter IV or New Super Mario Bros. are good examples.

But you’ve also got the games with interesting ideas that attempt to differentiate themselves in order to get noticed, such as No More Heroes or Demon's Souls. The games from Japan that have failed have often been those that attempted to emulate Western games just for the sake of it, without actually understanding what makes those games fun in the first place.

This really applies to all of game development, not just when trying to make a game in Japan that will appeal to the West—but you’ve got to have a basically good game above all other things. Just keep in mind, if you go into the generalist camp, simply trying to make a good game with common themes, you’re competing with a huge number of companies, many of which will have been toiling in your particular genre, with your particular brand of space marine for many a year.

On the other hand, if you spend more time working to differentiate your game, to give it a unique visual, aural, or game play style (and I mean significantly different, not just nicer explosions, or better ponytail physics), then you’ve got a talking point right away. The press will want to pay attention to your title, because maybe it’s doing something interesting. Fans will notice the press and follow the title. Non-core gamers may even catch wind of this buzz, if it gets loud enough.

Could a Japanese-developed third-person shooter about a bald, no-nonsense space marine work? Certainly it could. But does simply emulating that idea show the strength of a company or an understanding of a genre? Not really. On the other hand, with an interesting visual theme and an irreverent sense of humor, you immediately wind up closer to distinctive games like No More Heroes or Metal Gear Solid.

It’s not necessary to hide where you come from—an American game developer making Red Dead Redemption is a perfect fit. A British game developer like TT Games making an irreverent well-animated action platformer like the Lego franchise is a perfect fit.

For Japan, making a rather heady, visually stylish game such as Mad World or Bayonetta makes the most sense. Why should we try to be something we’re not? If we all just take what we know, apply the existing techniques from other games that have come before us, but marry all that with our unique expertise, then we wind up being the invincible mom and pop that Wal-mart simply can’t touch.