There’s a game development crisis going on in Japan currently, where the old models just don’t seem to work much as before. I may have to dig up some articles on this, if anyone cares to know about it in more detail. The Wii probably suffers exactly from its approach to games and the fact the Japanese culture is changing on that regard.

There’s a serious conundrum that Japanese developers are facing. On one hand their attempts at creating western culture games hasn’t been met with much success in Europe and USA. On the other hand their own market is starting to become too small for much more growth. European and USA companies compete on 4 continents. Japanese companies are starting to lose their edge on Europe and competing solely on Japan. Japanese high production values and carefully developed home games have lost their appeal in both the West as they are starting to lose in Japan itself.

The real problem is that Japan corporate culture is having an hard time embracing the highly visible titles with low production values of western development culture (nice looking, fun, but riddled with bugs, poorly developed and essentially bad products from a corporate point of view). Western companies are notoriously bad development companies, specialized in producing low quality but highly visible products. Japanese are the exact opposite. Their attempts at mimicking Western titles have been alienating the already shrinking Japanese market, while not gathering success in the West.

A few key Japanese developers have been addressing this problem in the past. Keiji Inafune in particular with his meme-like “Japan is over. We’re done. Our game industry is finished.” While many companies, many game developers and many gamers refuse to look at the truth, the fact is that Japan is in a tight spot. And they need to face it sooner or later. Last year Tokyo Game Show, once the biggest games convention in the planet, was a veritable attendance graveyard and where the biggest stand was… of a cellphone gaming company!

Nintendo is facing this reality. No longer holding a relevant position in the West with its home gaming approach and also losing ground in Japan itself. The problem is that Nintendo is the dalai lama of Japan gaming. If they try to westernize their gaming offer, their success is questionable and they will deal the biggest blow to Japanese gaming culture ever heard about. If they don’t, Nintendo is going to die in a market that is becoming increasingly more open to western titles.