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Former Square-Enix USA president bets big on PS Vita with new publisher

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The biggest video game publishers in the world are working hard to recreate their business models to accommodate an American gaming market where players are moving away from consoles and devoted portable gaming devices. Electronic Arts is recasting its console-centric empire on mobile and social games on platforms like iOS and Facebook, as well as the fast-growing free-to-play PC market. Activision is opening studios devoted to mobile gaming, like The Blast Furnace, for the first time. Now is not the time to focus on small audiences.

GungHo Online Entertaiment doesn’t care about what the industry giants are doing in the United States. The Japanese publisher sees not just opportunity in the US, but opportunities on some of the current industries least successful platforms. Three of the six games GungHo’s new GungHo Online Entertainment America branch is releasing are for the PlayStation Vita.

Can it succeed?

The company’s hired an executive with experience making Japanese games a success in the United States. Jun Iwasaki, former president of Square-Enix’s America office and until now the CEO of niche publisher XSEED, has spent the past two decades making Japanese games hits in the United States. His track record is strong. Iwasaki oversaw Square at the end of the ‘90s and early ‘00s, handling the domestic releases of Final Fantasy VII and many of the companies biggest western games. That experience will reportedly drive GungHo’s efforts here

“We understand there are cultural differences between Japanese and Western audiences, but we believe that the best approach is to start with a game that is genuinely entertaining, then produce said game for a specific audience,” Iwasaki told GamesIndustry International in a new interview, “It may seem like a basic rule, but it’s one that we firmly believe in.”

His statements seem strange in light of GungHo’s initial American releases. While it’s bringing three Android and iOS titles out, including Puzzle & Dragons, Freak Tower, and Princess Punt 2, its biggest releases are for the PlayStation Vita. Sony’s portable console has sold just 2.2 million units worldwide since its release last December, making its player bade the very definition of a “specific audience.” Dokuro, Picotto Knights, and Ragnarok Odyssey are badly needed original titles for Sony’s machine, but who will play them? Why bank so heavily on Vita?

“While we are looking forward to the Vita’s installed base growing in the future, we believe that the Vita and other handheld gaming devices (like the Nintendo 3DS) have great potential for network functionality and overall versatility,” said Iwasaki, “Also, as smartphones and tablets become increasingly closer to directly competing with dedicated handheld consoles, we feel it’s important to maintain a multi-platform model. In the same way that Sony and Android have increased their compatibility, it seems the PSP and Vita have increased their network connectivity rates, so we believe the systems show promise.”

Parity of online functionality and the ability to release titles on Vita as well as other mobile platforms is how Iwasaki thinks GungHo can mitigate risk in the market.

His company still faces the issue of competing for an already small audience. XSEED, Iwasaki’s previous venture and the initial US publisher of Ragnarok Odyssey, Atlus, and NIS America are just a few of the publishers already pushing small Japanese titles on PS Vita and Nintendo 3DS.

Whether or not GungHo thrives depends almost entirely on how well it’s able to promote its games. Iwasaki made Final Fantasy VII a success in America by partnering with Sony to publish it and aggressively marketing the game. That could work with GungHo’s titles, but it’s a different industry today than in 1997. The company is bold for going global, but the risk may not be rewarded.

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