A new mobile game is sparking hope that three large Japanese developers could revitalize Vancouver’s video-game sector.
Beyond the Dead, the first title launched by GREE’s Vancouver studio, has received positive reviews and is slowly building commercial success. The game is set in a zombie-infested post-apocalyptic world and was released Oct. 31st for Apple’s mobile devices.
GREE’s game marks a broader trend of large Japanese web and mobile game developers responding to lagging sales at home by expanding their North American operations, partly by creating games in Vancouver.
“The Vancouver studio looks forward to developing more titles out of their studio, and expanding the office,” said Akiko Thayer, a GREE spokesperson.
Beyond the Dead is a free-to-play title, which means that it is free to download. But users are encouraged to purchase in-game add-ons to improve their chances of winning.
According to mobile analytics firm App Annie, the game quickly jumped from 1,175th to 281th on the top-grossing chart for U.S. iPhone games.
In addition to GREE, Namco Bandai and DeNA Studios have both opened Vancouver offices to build free-to-play games for North American audiences. Namco Bandai is still in the early stages of setting up in Vancouver, but DeNA’s Yaletown office currently manage two games.
Rebuilding Vancouver’s video game sector
Vancouver’s games sector has suffered a number of closings and layoffs at large console studios, but developers hope that small offices like DeNA, GREE and Namco Bandai can make up for the losses.
Lance Davis, chairperson of the BC Interactive Task Force and board member of Digi BC, is excited by the prospect of free-to-play growing in Vancouver. He believes it could facilitate Vancouver’s transition from making games for consoles such as the Xbox or PlayStation to creating ones for the web and mobiles.
“With the advent of micro studios, when big studios go down, a bunch of micros come up,” he said.
The free-to-play market is set to out-gross console games for the first time in 2013.
Both new gaming consoles, the Xbox One and PlayStation 4, are rolling out support for digitally-distributed free-to-play games, which will open up new possibilities to create more sophisticated free-to-play games.
Struggles back home
The North American free-to-play market has become increasingly important in the face of new regulations in Japan.
GREE and DeNA specialize in card-battle games, in which players purchase digital cards and then compete against other sets of cards. The genre dominates mobile gaming in Japan.
Nearly every one of their card-battle games used the “completion gacha” mechanic, where players are given special rewards when they collect a complete sets of cards. However, the probabilities of earning any particular card is low, so gamers typically have to buy many cards before they receive the correct one to complete their set.
In 2012, the Japanese government outlawed “completion gacha,” with ministers saying the technique promoted gambling. The stock price of GREE and DeNA both plummeted by some 23 per cent.
Falling sales led to DeNA’s profits shrinking by 24 per cent over the past year, according to a recent quarterly report.
GREE, too, saw its profits shrink by 6.7 per cent over the same time period. In response, the developer cut 23 games and implemented aggressive cost cutting.
Shift to North America
Of the 23 games cut by GREE, only one was a North American title. Revenue is up for GREE’s North American games, and the company’s quarterly report signals a shift towards the North American market.
Although Beyond the Dead has not been a runaway success, it demonstrates GREE’s effort to go beyond “completion gacha” and adapt card battle for the North American audience. The game adds open-world exploration, multi-player elements, and side quests.
DeNA has also seen revenue growth for its few North America titles.
DeNA’s Vancouver’s NFL Matchups, a card-battle game, ranks 153rd on the top-grossing chart for US iPhone games, according to App Annie figures. However, the title ranks very low in the download charts, suggesting that it depends on a very small group of dedicated players.
Some industry observers are skeptical that companies like DeNA can have broader success in North America.
“I think they are going to be challenged,” said Joseph Kim, a San Francisco-based game developer and blogger who writes about the free-to-play industry.
“Outside the card-battle market, they really have not had a whole lot of experience. There are differences between markets, and I am not sure if the Japanese have really caught on to other forms of mobile gaming.”
The company is now developing 20 North American games in its Vancouver and San Francisco studios, but it would not say how many are being produced here. The games cover a wide range of genres that North American audiences tend to enjoy, including shooting and racing games.
Saturo Ishida, chief data analyst at DeNA Vancouver, wrote in an email: ”Going forward, we will diversify and strengthen our game portfolio with Western gameplay to attract an even broader audience.”