“How Nintendo fell out of love with hardcore gamers” is not, as you might surmise, a quote from some irate forum-goer venting his spleen about Nintendo’s new direction, but a headline feature in multiformat industry bible Edge. Compare and contrast that with its main cover line “Heavy Rain - the new state of the art in realtime 3D on PlayStation 3″ and it’s clear to see just how much Nintendo is pulling in a different direction to the rest of the industry.

Though the piece itself - well-written and informative, as Edge features tend to be - veers away from the faint sensationalism of its strapline (or indeed it’s punning title, Nintendon’t), it’s telling that a magazine like Edge feels the time is right to examine Nintendo’s current position. It’s clear that that E3 press briefing has a lot to do with it, but really, Nintendo has been moving down a different path for quite some time now.

While some might claim Nintendo has become arrogant due to its success - and you can hardly blame people for thinking that, especially given all the bar charts and graphs boasting how much revenue its two wildly successful current consoles are making - I think it’s merely looking at a new business strategy, and core gamers aren’t its number one priority any more. They’ll still be catered for, of course, but people have to accept that Nintendo isn’t going to release twenty-odd hardcore-friendly titles per year (not that it ever did, but still).

It’s a pity in a way that Nintendo can’t cast its net wider and recruit more studios to make more titles (which would undoubtedly be profitable) but then it’d monopolise its own console to an even greater degree. Perhaps that’s not such a bad idea given that very few third-party developers seem to know how to get the best out of Wii, but then we’d miss out on the likes of MadWorld or House of the Dead: Overkill. A partnership with Sega then? Two sets of fanboys for the price of one? A nice idea in some ways, but it just wouldn’t work.

It’s not hard to see why Nintendo’s blue ocean strategy appeals to the company itself - its new audience doesn’t go baying for blood if it doesn’t get a new Zelda or Mario every year, rather it’s happy to pick up the latest heavily-trailed peripheral-dependent blockbuster every couple of months or so. While it would be folly to turn a totally deaf ear to the complaints from core gamers, it makes perfect sense that Nintendo’s focus has changed, particularly with Microsoft and Sony so actively chasing one side of the market (and both having effectively cornered it between them in the previous generation, leaving Nintendo to pick at the scraps in third place). 

Nintendo’s new approach is a little like your favourite band releasing a really commercial stadium rock album after several years peddling quirky indie-garage which fans adored but which hardly troubled the charts. In a way, you hate them for it, but at the same time you can hardly blame them for selling out a little. And there’s always the old classics to fall back on when your head starts to turn towards another group…let’s just say I’d be surprised if 2009 didn’t at least bring the announcement of a new Mario or Zelda, if not the games themselves.

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Japanese developer Tose has worked on many hundreds of games since 1979 and employs about a thousand developers in multiple studios all over Japan -- and consumers have played many of their games without ever even being aware.

The company has associated itself with only a handful of its titles: Sega Casino, SNK's Sasuke vs. Commander (1980 arcade game), Nightmare Before Christmas (GBA), Shrek: Reekin' Havoc and Shrek: Hassle at the Castle (both GBA titles for TDK Mediactive), and a series of Nickelodeon licensed mobile games for THQ.

Other than that -- and the notable exception of Starfy, a series for which the company holds half the IPl, Tose keeps mum. This is because the company's business lies largely in outsourced development, and confidentiality agreements prohibit Tose from discussing the games it's worked on.

In fact, confidentiality's so key to Tose's business that we can't even give the name of the Tose exec to whom we spoke for this special Gamasutra interview.

Two years after our first in-depth feature on the company, we revisit Tose to find out how Nintendo's market dominance in Japan is affecting the development climate, about the challenges Japanese developers face in reaching Western audiences, and whether Tose -- who primarily develops now for Wii, PS2 and DS -- is prepared to make the move onto next-gen consoles.

How do you feel the Japanese market has changed in the last two years, with the advent of new consoles?

In the past two years, the DS and Wii have become the dominant players in the industry. Sony took a large marketshare in the industry with the PS2, but has been a little bit behind for the PS3. Overall, the industry is still growing.

The third-party publishers of the industry have been growing, but Nintendo’s growth is too significant. So for me, that is not good for the publishers. That is just good for Nintendo. For us, we still can have lots of projects for many companies for the Wii and DS, but for the publishers, it's not a good situation.

Is it a more attractive position for Tose to be in than before?

More projects are coming to us than before. Not only from traditional game publishers, but also new companies publishing DS products which are not games, like brain-training titles.

How many next-gen games has Tose had to do development for, so far? I mean like Xbox 360 or PS3 or high-end PC.

We are just doing a couple of titles for the PS3 and the Xbox 360 as well.

Is that next-gen end of your business coming from the U.S., or is it all in Japan thus far? As other countries start to outsource more, do you have to change your tactics?

From U.S. publishers? Not yet. We haven't changed our strategies at all, but more projects are coming from the U.S. and the European publishers, so we have to deal with that demand, as well.

Also, we have just opened three studios in Japan -- Okinawa, Nagoya, and Sapporo -- to supplement manpower for that demand. So we guess we are a little bit worried about the situation, because other countries are trying to catch up. Fortunately, we have been in this industry for 29 years, so we will be okay.

How many developers are working at Tose, now that you've opened more studios?

It's 1,000 in Japan, 200 in China, and two in the U.S.

Big office! (laughter) Very important.

There may be a strong development environment in Sapporo, but not a lot in Nagoya nor Okinawa. Why did you choose to open studios there?

Our first reason to have studios in Nagoya and Okinawa is there are no publishing companies like Capcom and Sega. If there are lots of publishing companies, it's very competitive to employ talent in that area.

The second reason is that there is a special school for the students to learn video game development, so it's easier for us to find talent.

Also, our company policy is to train people from entry-level to a higher level, so those places -- Okinawa and Nagoya -- are very good places for us to have people training.

I've noticed that games from the Kansai [Osaka and Kyoto] area have a different feel than games from the Tokyo area. Do you think that games coming from Nagoya and Okinawa will be stylistically unique, too?

I agree with you, that games have different flavor from different places. It will not happen from Okinawa yet, because we're just starting. But for another studio, we'll have Okinawan-flavor games in the near future.

Are there any plans to do any more original IP out of Tose in the near future?

We already make original games for publishers, but we will not own the IP of that project.

Will it be based on ideas generated from Tose, or from the publisher?

From both. It depends on the project.

Have there been cases in the past where Tose has come up with an idea, pitched it to a publisher, and the publisher released it as their own?

Basically, that is what we are doing.

Are there any examples you can give?

Sorry. That's all we can say.

How is your tools integration going? Does everyone use the same toolkit, and do you develop in-house engines?

We have a central technology team in charge of all the technology for the platform. They are controlling and managing the technology for the entire company. Usually, we can share the information through the internal website.

We don't have an engine or anything. We have basic libraries and stuff, and each team can share. Each team has a different project and different clients, and they use those basic libraries, but they have to customize them for different projects and stuff. But they have tools, you know -- different types of tools. Those are shared by all the teams throughout Tose.

From the Japanese perspective, how's the Western expansion going?

We want to expand more, especially as the U.S. market is much bigger than Japan's, so we need to get more projects from U.S. publishers.

Do you think it's easier for Japanese companies to develop for the Western market by working with Western publishers, or from Japan and market it from there?

Both are not easy, because it's business. In the past, it was easier to work with Japanese publishers even though we had a project for the Western market, because we have known Japanese publishers for a long time, so both already know how to work together. So it was much easier before. But now we are getting to know the Western style, so it's becoming easier, but still it's not easy.

Has it been difficult to adjust to the way Western publishers deal with things? I think they probably do a lot more micromanagement and a lot more check-ins and milestones than I would guess from Japanese publishers.

We didn't have any difficulties in scheduling issues, because we have had the same experience working with Japanese publishers.

But we think we have to do lots of work before starting actual development, like game design documents and technical design documents. There's lots of documentation that we have to prepare for Western publishers. That's probably the biggest difference between Japanese and U.S. publishers.

Do you find that Western publishers give you more feedback during the project?

We don't find any big difference between Japan and the West on that. Probably the difference in the West is in what they want us to do, in terms of gameplay or game mechanics -- it's very hard to explain, but for us, the companies in both countries are trying to make the game as good as possible, but in each area, there's something of a difference in taste or something like that. That's a kind of difficulty.

In the West, there's a lot more focus on a multiplayer component, and most games are required to use the network in some way. Is that another difference?

That's true, but we haven't had lots of projects for next-generation machines yet.

Are you concerned about that? At some point, these consoles will become the standard -- do you worry about being behind?

We are not concerned about it at all. We are based on a work-for-hire model, so projects will probably be coming for the Xbox 360 and PS3 if publishers want us to do that.

Is the staff being trained for next-gen stuff in advance of getting the projects?

Yeah. We already have knowledge of technology for those console games.

By your business model, the names of your new staff that you'll be training from entry level won't really become known to the outside world. How do you evaluate their work and promote them up in that case?

We have a kind of mentor system. We have one mentor for one new person, and he should be responsible for training for that person. For example, for the Nagoya and Okinawa studio, we sent people there who have been in this industry for many years, to train people locally from the beginning state.

Also, our company policy is that once people join Tose, we want them to work at Tose for their entire life. Right now, that works well in Tose, so we don't worry about people leaving the company.

What do you do when people are not very good at their job, then, if you want them to stay there forever?

For people to join the company, they have to pass a lot of steps, like examinations, in terms of technology. People who pass that test should be good, so we don't have to worry about that aspect.

But with a thousand people working at the company, how can you identify if someone's not doing well?

We work as a team, so everything is a team's responsibility. If someone is lazy, that's totally the team's responsibility. We shouldn't have that kind of lazy guy in the team, so that team has to take care of everybody.

It's very Japanese, so... (laughter)

I guess in the U.S. if one engineer is sick in bed, his part of the work should be stopped. But we work as a team, so even if someone is sick, the team covers his part.

Tose is not supposed to discuss which games it's worked on -- have you ever had issues with people breaking non-disclosure?

Top secret stuff stays in the minds of the people working on it. It doesn't go down to lower levels.

Sony is launching the 160GB Playstation 3 on October 31. This new model has more than twice the storage capacity of current models, an attractive feature for users with a penchant for downloading and storing videos, music and photos, in addition to games and game extras. Other features include Playstation Network content, a Blu-ray Disc player, DUALSHOCK3 wireless controllers, video chat and online play. It will be available in Europe and the US for a retail price of €449 and US$499 respectively. [Electronic House]

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There's a lot of legal babble here, but I'll try to break it down:

Back in 2003, Immersion sued both Microsoft and Sony for the use of rumble in their controllers, as they originally held the patent for the technology. From this lawsuit, Microsoft was ordered to pay Immersion $26 million. Ouch.

However, being the sly bastards that they are, MS included a clause that required Immersion to pay them a portion of any money obtained from Sony as part of additional litigation.

Later, Sony was ordered to pay Immersion $90 million over the suit. Double Ouch. Microsoft was not paid per that earlier agreement, so they sued Immersion. 

Finally, Immersion settled out by paying 20.75 million to Microsoft. 

The end result? Microsoft made out like a bandit, paying in a little over $5 million for the use of rumble in their controllers. Poor Sony has to pay so much more. 

[Via GamesIndustry.biz]