Sunday, Apr 30, 2017
Telecoms & ICT | Asia-Pacific | Japan

Japan gaming industry

HAL Laboratory bets on unique attention to details and customers’ happiness to be at the forefront of the dynamic gaming industry


3 months ago

Mr. Masayoshi Tanimura, Chairman and CEO HAL Laboratory
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Mr. Masayoshi Tanimura

Chairman and CEO HAL Laboratory

In an interview with United World, Mr. Masayoshi Tanimura, Chairman and CEO of HAL Laboratory, says that although the industry is growing rapidly and profit-making has become the new mantra for many other players, the core corporate values of the creators of the world’s famous Kirby series and historical collaborators of Nintendo remain “happiness and fun.” The culture of inventing and creating is highly interiorized within HAL Laboratory,” affirms Chairman Tanimura, and its games have proven to be successful because instead of having a specific audience in mind, they are simply developed to be fun to play

From your point of view could you tell us how you see the Japanese economy up to 2020 and what are the key challenges it will face? What can the private sector do to rejuvenate Japan’s economy?

I believe that the economy will grow. The government has implemented the correct structural reforms and policies, and its vision is result driven beyond being well targeted. However, un-planned environmental factors, such as the overseas conditions and the fluctuation of the yen’s value, have led the expected effects to be limited. Nevertheless, the policies are going in the right way, so it should take reasonable effects up to 2020.

The private sector should put extra effort into the redistribution of profits into new businesses, while also redirecting it towards employees by increasing wages and salaries. On the other and, at HAL Laboratory, we have a large internal monetary reserve. We are keeping it because the gaming industry is very dynamic, in a way that when you make a big hit, you make lots of money; but there is a chance that it could also be a mitigated result, provoking severe losses. Our internal financial reserve has been kept and nurtured as a provision for a rainy day.

 

In 2015, the global game market reached a value of $91.5 billion and is expected to grow by 5 percent yearly for the next three years. The game market in Japan rose to $12.3 billion, making it the third largest in the world, behind China and the USA. What have been the key drivers behind this growth? What trends in the console videogame market do you expect both globally and domestically in the next five years?

Our industry is expanding because gamers from emerging countries are joining the market. This new demographic segment has added a significant source of extra revenue. However, the growth of the console video game market is not as large as that in the general gaming sector.

 

In the 1990’s, the gaming console industry was the gaming platform. The four most sold gaming consoles of all times are all Japanese (PS2, Nintendo DS, GameBoy and PS1), and today, out of the global top 10 gaming companies, five are Japanese. What makes Japan’s gaming industry so competitive?

First of all, among makers, there has always been an intense domestic rivalry between big names. Nintendo, Sony and Sega have battled for years, creating a fast-moving industry. This competition is historical. From the user side, the gamer subcultures started developing at the same time, and there was always a big number of them since the early years. These two factors greatly contributed into pushing the industry forward. A strong and demanding fan base alongside a thriving competition pushed developers to create the best, most innovative products.

 

Since the 1980’s, you have closely collaborated with Nintendo, being one of the most famous and recognized game conceivers across decades of different gaming consoles. How would you describe your long-lasting relationship with Nintendo?

Before HAL Laboratory was founded, one of the first personal computers created, the Commodore 2001, was being sold at a store in Japan. In that store, several college students, who would eventually become part of HAL Laboratory, used to hang out and spend their time. These students were tech savvies, always curious to know how this kind of machinery functioned.

At a time where there was no disclosure about internal contents or know-how, they were able to hack the computer and figure out its internal system. This tech-savvy crew set up HAL Laboratory. From the start, we had a group of people who were technically capable and who understood internal computer mechanics. Luckily, the CPU used for the Commodore 2001 was similar to the one used for the NES (Nintendo Entertainment System), which opened the door to our partnership with Nintendo. This anecdote goes to show that our collaboration with Nintendo is something historical, and over the years, we have established a mutual relationship of trust based on collaboration.

However, I want to make clear that HAL Laboratory and Nintendo are two different companies. Our customers are often confused as to our relationship, and tend to wrongfully assume HAL Laboratory to be a part of Nintendo. HAL Laboratory is a secular and independent company, both in terms of management and corporate culture.

 

2015 marked the 35th anniversary of HAL Laboratory. Since 1980, you have been releasing record-breaking games with the likes of Kirby or the Super Smash Bros series. These successes have crossed decades and generations. What are the foundations of this incredible longevity?

What we care about most is making our customers happy with our products. I use the word “happiness”, as this should not be confused with “satisfaction”. In fact, I would like to clarify that matter. At HAL Laboratory, we believe that happiness and customer satisfaction are two separate concepts. On one hand, a person can be satisfied by obtaining materialistic objects or winning an abundance of money, but not necessarily happy about it. On the other hand, some people have nothing, or very little, but live in a state of happiness. There is an index for measuring consumer satisfaction. However, the happiness that a game brings to you is not something you can calculate; it’s something you have to culturally install and be internally dedicated to.

 

Do you conduct surveys directly with clients to get this information? Or does it come from Nintendo?

I have some experience with data collection. Here in Japan, companies do not collect as much as American companies’ data for consumer satisfaction. Instead, creators must imagine, assume and think it through. The question we at HAL Laboratory ask ourselves is: “What part of this product can provide tangible happiness?” While most companies in Japan do take care of customer satisfaction, they do not create products reliant on an index. It is more of an underlying corporate concept, some kind of an inner-vision.

 

In the 80’s and 90’s you developed a short-lived US subsidiary, HAL America, to further penetrate the U.S. market. Do you have any plans to tap into the U.S. again?

In short, we want to continue making our customers happy. At the same time, we are gaining more and more customers, and this is a challenge for us. In 1992, we released the first game of the Kirby franchise. Up to that moment, we were really focusing on developing as many games as possible, as fast as possible, all in order to maximize profit.

Launching so many games made us wonder if that was really the way to generate profit, so we decided to change our strategy. From the second Kirby title, we started developing our creations, but always ensuring that, whichever new Kirby game a player chose from the series, they could be entertained. They would think “There is no end to the fun.”

For that reason, we reduced production of the number of products before we took off every tiny little aspect, from the main character to the flowers in the décor, in order to build an environmental essence that would characterize the series, making it, above all, simply fun to play. Ten years later, Kirby’s popularity soared and it became a well-known icon of Japanese gamming. However, in the U.S., it was not like that. We therefore decided to take different strategies in order to promote Kirby, and introduced it through animation. We were greatly successful. Thus, we are already challenging the American market. Nowadays, we have sometimes sold more Kirby titles in the U.S. than in Japan, and we plan to keep on doing the same.

 

Your latest feature, Kirby Planet Robobot, surpassed in June 2016 the 300,000 sales unit. Could you tell us what makes this game stand out and be different from others in the market?

The key to the Kirby series’ success is that we are not developing towards a specific target audience. We try to make our games enjoyable for beginners and experienced players alike. Regardless of age, gender, nationality or background, we are developing games that everybody can play.

I sometimes like to compare our games with the sensation of pressing bubble wrap paper; because people simply enjoy pressing it! We want our customers to have fun when playing our games. That’s the big principle guiding us. For this particular title, I would highlight the tremendous effort we have invested in the making process, the attention to detail, and the various levels of difficulty.

 

What ambitions do you have for the future?

My ambition is to maintain and expand our corporate philosophy. That does not necessarily mean that we have to make our company bigger. Of course, I would like to be profitable enough to improve the lives of my employees.  However, I do not want to make our company explode for the sake of money, I do not want to sacrifice my customers’ happiness for the sake of profit. Some companies in this industry set their first priority to be as profitable as possible, we are different in this aspect. We would like to reach the same stage as the Kirby title and make HAL Laboratory well known around the world, while remaining true to our core values: Happiness and fun.


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