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The days leading up to the Tokyo Game show have already seen the Xbox 360 Media Briefing, an event that set out Microsoft's next-generation console strategy in bold strokes. Yesterday, a far more low-key, but no less important event took place. The Foreign Correspondents Club of Japan held a professional luncheon with two of the game industry's most knowledgeable experts: Enterbrain president Hirokazu Hamamura and KBC Securities research director Hiroshi Kamide.
Both are widely quoted individuals whose opinions carry significant weight among their respective constituencies--Enterbrain publishes the widely-read weekly game magazine Famitsu, while Kamide covers the game sector for KBC and is often quoted in newspaper and magazine articles read in Japan as well as the West.
The luncheon was held in an area of Tokyo which straddles the Marunouchi business district and celebrated Ginza area. This neighborhood is eccentric to say the least. Amid the buttoned-down, suited masses shuffling to work, one finds a series of bizarre cow sculptures, apparently placed as part of an art-in-the-street campaign. A Shinto shrine guarded by two stone foxes grace the front of the glass and concrete pillar that is the Yurakucho Denki Building, where the FCCJ's offices are housed. Further underlining the contrast between the two districts--or perhaps offering an attempt at harmonizing the two areas--are the lush green grounds of the Imperial Palace, located just a block or two from the venue.
About 25 guests, including journalists from The Wall Street Journal, Bloomberg wire service and London's Guardian newspaper, feasted on sautéed salmon or more blue-collar roast beef sandwiches in the club dining room. Wolf Blass Bilyara Chrdonnay and Mommessin Cotes-du-Rhone wines were also supplied, possibly to encourage guests to freely speak their mind about the upcoming battle royale in the Japan game industry.
After the gastronomic activities concluded, it was time for a photo op. A number of bright studio-sized lights were focused on the two men to facilitate the taking of snaps. And then, with a few words of introduction from Birga Becker, moderator for the event, the gloves came off and the talk began.
While much territory was covered, the core of the conversation dealt with a topic on most gamers' minds--the three-way competition between Microsoft, Nintendo and Sony.
Hamamura fired the opening shots, opening with a slide presentation and speech that incorporated some of the vast raw data and projections the Enterbrain organization puts into its yearly gaming white paper.
He gave an overview of the Japanese game market, which is currently booming, thanks to traction from the Nintendo DS.
"With ten million units sold to date, this is the fastest growing console in the Japanese market," he said. "No console has ever exceeded 19 million units, but I think the DS will." The success of the DS may be due to more to an overall and evolutionally trend than Nintendo's genius.
Just as small, agile mammals replaced the enormous dinosaurs, Hamamura's figures show handhelds have been steadily devouring market share over the last four years. This share grew from 25 percent in 2002 to about 45 percent in 2005--before jumping to over 60 percent as of July 2006. But this sort of thing has happened before in Japan.
"You can compare this with the emergence of mobile phones," he said. "Mobiles have been growing while fixed phones have not. The shift has been from one phone per household to one phone per person." He also stressed that much of the DS's success has been due to word of mouth--players finding a fun game and telling their friends about it. Due to these factors, Hamamura said "I expect the DS to exceed 20 million, or maybe even 30 million in [worldwide] sales."
Hamamura then proceeded to dissect each of the next-generation consoles. He had a lot of praise for each, beginning with the Nintendo Wii, which he called a "sure bet" for the end of this year.
Hamamura believes the Wii will build on the word-of-mouth effect enjoyed by the DS to eventually reach ten million units over its lifetime. Showing a graph of project sales curves for the current Nintendo consoles, he said: "The growth pattern will be very similar to what we've seen with the GameBoy Advance." That is to say, moderately paced, stable growth in sales.
"They will at least sell double the number they sold with the GameCube." He also pointed out that Wii's advertising campaign focuses on the players interacting with the hardware, not spectacular graphics.
Moving on, Hamamura then lavished praise on the PlayStation 3, outlining its features and "unparalleled graphics." However, he was not sure that these would guarantee it instant success. "In a poll we ran, 50 percent of the respondents said they wanted a PS3. But when asked if they could afford to buy one, most said they would wait for a price drop. ... In the case of the PlayStation 2, the DVD player was a very attractive feature. But I don't think the Blu-ray feature in the PS3 is as attractive now as DVD was then."
Hamamura feels that growth
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