Where Have All the PC Games Gone ?Unlike in the US, where the value of PC game software sales is posing serious competition to video console game sales, in Japan the PC game software market is only one-twentieth the size of the console game market. Where did Japan's PC game market go off course, and can it get back on track?
by Tina Lieu
When someone says "japanese software," what pops into your mind? Ichitaro? Sanshiro? OASYS?
Well, maybe, but admit it: Super Mario, Final Fantasy, or Dragonquest probably came to mind first. Yet, despite the overwhelming popularity of Japanese game software the world over, Japan's PC game software market in 1995 was less than 5% the size of the dedicated game console market. Consider the following.
In 1996, the installed PC base in Japanese homes reached 5.76 million units, a home PC penetration rate of just 13.3%. This rather modest 2.2 percentage point increase over 1995 was due in part to higher PC selling prices, which was a result of the trend towards multi-featured consumer models loaded with rich multimedia functions (such as built-in graphics accelerators, stereo speakers and sound cards, and CD-ROM drives). This trend continues into 1997, with the introduction of home PCs loaded with Intel's Pentium processors with MMX technology and MPEG-1 (digital video/audio) playback features. The most obvious immediate beneficiaries of these technological advances are, of course, PC games. But where are the PC games in Japan, the world's undisputed electronic gaming leader?
In 1995, 3.32 million PC game software packages valued at JPY 21.6 billion were sold in Japan - increases of 53.7% and 39.2%, respectively, over 1994. This is minuscule when compared to sales of game console software, which in 1995 was a nearly JPY 477 billion market.
In the US, console games continue to hold a market majority, but sales of PC games are catching up. Total US sales of interactive entertainment software in 1996 reached $3.1 billion; of this total, video game console software accounted for 55%, and computer game software for 45%.
The lack of market visibility for PC games in Japan can be partly explained by three reasons: Nintendo 64 and Super Famicon, Sony PlayStation, and Sega Saturn. But there is more to the story than the popularity of these dedicated game console systems. In the early days of electronic games, PC games and arcade games were "it." So what happened - and is there a future for PC games in Japan?
A history of electronic gaming in Japan
Harumi Noguchi, editor of the geisen gaming section of the Tokyo-based online magazine teleparc, recalls the earliest form of her own maikon. "It didn't even have a monitor; it was just put together with a lighted eight-digit LED display and a keypad with numbers, a few letters, and other keys. Since computers were a hobby back then, it was a natural extension to the world of games. Hobbyists would write and type in their own simple game programs. For example, you would 'fire' a 'missile' from the leftmost digit place [of the LED display] that would blip through the six spaces between to hit a target on the rightmost side. Depending on the timing, you'd score a given number of points, which would appear as numbers."
These early gamers were dedicated. "In order to save their games," Noguchi continues, "hobbyists used magnetic tapes. It could take up to 30 minutes to load a fairly complicated game from the tape to your computer. Of course, there were arcade games then, but the motivation was in the fun of recreating those arcade games and customizing them, as well as saving money."
In the early '80s, when reasonably priced computer displays came out (green text on a black background - remember those?), the Japanese switched to calling their computers "pasocon" (personal computers). At about the same time, amateur programmers began to sell their games on tape. One of the early game software companies, Hudson (maker of the Bomberman series), started its computer game software business in this way.
In just six months, 440,000 Famicon units were sold. Within two years, the Famicon's popularity was cemented with the release of Super Mario Brothers. Released in 1985, Super Mario Brothers sold over 2 million copies in a matter of months.
Japanese who wanted to play games turned en masse to Famicon and its successors. Some hobbyists continued programming with Sharp's MSX PC (and still do today), but NEC's PC9800 - which quickly became Japan's mainstream computer, capturing a majority market share - was seen as a business machine to be used for more practical applications (like Ichitaro and 1-2-3) and not for gaming. (There was one active group that used the PC9800 to program adult games; that genre still exists today, although it remains small.)
The perception that "PCs are for work, and game consoles are for games" thus started with the split in the mid-1980s between NEC PC9800 users and Nintendo Famicon users. That perception has continued to the present day.
"Although PC games are by no means a big force in the home gaming market," says Noguchi, "starting around the mid '80s the PC population grew in the Japanese workplace. At some Japanese companies at lunch time, you may see people playing games which came with the computers. History-based, war strategy games, such as Nobunaga no Yaboh (The Ambition of Nobunaga) and puzzle games like Tetris seem to be especially popular."
"I think this 'lunch time game' niche is one that could be mined," she adds. "The games just have to be cheap, and easy to pick up and play any time. But the real question is what games will make it in the home, where PC games have to compete with console games."
"Many new PC buyers end up being content with the games bundled into their machine."The lack of a killer app
Game vendors Sega (maker of Sega Rally Championship), Attain (maker of the Marathon series), and Virgin Interactive Entertainment (publisher and distributor of Tomb Raider) agree with Noguchi that having a "killer app" is one element critical to the success of PC games. "A 'killer game'," she says, "is one that makes people say 'I absolutely have to play that game!'"
Noguchi points out that every time sales of a particular game console have taken off, it has been because it had a new "killer software." Nintendo had Super Mario Brothers, Dragonquest, and Final Fantasy. And Sony PlayStation now has Final Fantasy VII, which has been selling like hotcakes since it was released at the end of January. Total shipments of PlayStation, which numbered 10 million worldwide as of November 1996, had jumped to 12 million by February 14 and 16 million by the end of May. Noguchi also notes that Sony is trying to reach a larger audience for its PlayStation by releasing new software applications (such as its surprise-hit Parappa Rapper action rhythm game) that will attract users besides the child and otaku (computer nerd) segment and give it a different image.
The long road ahead
As one major game maker observes, "many new PC buyers end up being content with the games bundled into their machine.... There is a strong mind set that games are played on dedicated game machines." A Sega spokesperson agrees. "It's important to increase consciousness among users that there are many things that can be done using PCs. Those who think of using PCs to play games are still small in number."
Besides the lack of a "killer game" and the PC's image as a "business machine," some other factors are holding back the development of a serious PC game market. Among the reasons cited by Japanese game makers are the high cost of games and computers, a need for computers to be less complicated, a lack of information, and underdeveloped distribution channels.
The Famicon was a cheap system considering the terrific graphics and great games offered at... a cost-performance that computers could not compete with.Creating lower priced software, in the JPY 5,000 to JPY 7,000 range of console games (some PC games currently go for around 10,000), may be possible. Prices will probably not come down, however, until demand goes up enough to warrant higher production volumes.
The image of computers being "hard to use" is not entirely deserved, since today's CD-ROM games can be very easy to install and play. Still, adding the proper sound card and equipment for certain games, not to mention having the correct operating system, can be a sticking point. Console games come with all the necessary hardware, and no installation is necessary - you just plug it in, insert the cartridge or disk, and play.
"Another thing PCs need," declares Noguchi, "is a 'smarter' interface - one that's as easy to use as a TV." A spokes-person for Electronic Arts Victor (maker of Theme Park) agrees, noting that, "it will be difficult [for PC games to catch up to game systems] in JapanÉ. Somehow, game consoles are just easier to handle."
The lack of information about games available for PCs is an equally difficult problem to solve. Before major software releases of console games, intense print and TV ad campaigns are the norm. This is not true for PC games, which become known primarily through word of mouth. According to Noguchi, "There just isn't the sense of excitement in the PC game world that there is for console games." Even when potential purchasers know about a game, finding it in a store may not be an easy task. Virgin Interactive Entertainment's spokesperson notes that there is a need to increase PC game distribution channels (such as to bookstores and convenience stores) so that consumers can easily buy and play the games.
A recent PC game that has been getting rave reviews, for example, is a network game called Diablo. On the geisen message board, Noguchi saw some postings about Diablo. Some said they'd tried it and were addicted to it. Most others just wanted to know where they could buy a copy.
Future factors for PC gaming
PCs have come a long way, and in some areas they are technologically superior to console game machines. "The ability to database is powerful on a PC," says Noguchi. "For a war strategy game like Nobunaga, based on real historical figures, you could create a huge database with detailed profiles of each character. That's something fans of this genre would really enjoy. Picture quality and resolution on a PC screen is also much better than TV."
What will be the impact on gaming of new computer technologies, such as MMX technology (Intel's new chip technology that speeds up multimedia processing)? Most game makers cautiously told us that they will use new technologies if they are needed for the games they produce. As one major game maker said, "When we develop a new game, our company uses the special characteristics of each hardware platform. For example, if we make a PC game, we try to make a game using something that only the PC could do."
If PC game sales do take off in Japan, it might come with the arrival of network gaming, which remains essentially a computer-only domain. (Although Sega Saturn now lets a user face-off with opponents over phone lines, it hasn't really caught on yet.) In the US, for example, network gaming has been booming since the debut of ultra-violent, 3D first-person shooting games such as Doom, followed by Quake and, most recently, Diablo (a role-playing game). Such games are provoking fast and furious multiplayer bouts using modems and the Internet. Quake, for two to eight players, has spawned "Quake clans" - teams of players that challenge other teams over networks. Many new computer games in the US are now being released with multiplayer networking capabilities.
Single player adventure games, even those with complex or entertaining story lines grow stale after one has "beaten" the game. However, network games like Quake - with fully 3D graphics environments but admittedly weak story lines (Quake was awarded the dubious honor of Computer Gaming World's "#1 worst background story") - have earned rave reviews and can be played endlessly. The fun comes both from the game's technological sophistication and from the challenge of playing against another person.
With the continuing Internet boom in Japan, and new network games on the horizon, PCs may yet be able to compete with game consoles on the Japanese gaming scene. And if they do, that will increase sales of home-use PCs and may help drive the Japanese personal computer market.
teleparc is a Tokyo-based online magazine http://teleparc.com with content in both Japanese and English; geisen is its dedicated game database and game news section.