Every Friday afternoon, the staff of Xseed Games have a meeting. They sit in a conference room, break out the booze, and talk about video games. They talk about what games might be fun to make, what games might be fun to play, and what sort of strange Japanese titles they should work on next.
It's a much-needed moment of respite for the gang of talented multi-taskers, heroes to any American gamer desperate for someone to drag overlooked Japanese games across the Pacific for us to play, who work long hours translating, marketing, and bringing Eastern games to life in the United States. They have to work hard: there are only nine of them. Nine people. At the entire company.
But while the bigger guys—giant game publishers like EA and Activision—duke it out over who can sell the most millions, Xseed is happy to stay small. They're happy to focus on quirky Japanese games. And they're happy to stick within their niche, even knowing that it won't make them nearly as much money as they might make chasing after shooters and dubstep.
It's not easy. Big retailers want nothing to do with them, passionate fans can be a little bit too passionate, and everyone in the company has to wear multiple hats every day. But Xseed keeps going. And to people who like Japanese games—games like Half-Minute Hero, The Last Story, and Valhalla Knights—Xseed has become one of the most beloved companies on the planet.
Niche of a Niche of a Niche
"How do you pick the games you localize?" I asked Xseed. I was sitting in their conference room, chatting with vice president Ken Berry, editor Jessica Chavez, translator Tom Lipschultz, and marketing manager Jimmy Soga.
"I would say usually games are found either by somebody contacting us, like the Japanese developer team or publisher contacting us and saying, ‘Hey, we have this title, are you interested in publishing it in North America?'" Berry said, "or us just hearing about a title, whether it be reading about it in Famitsu, or seeing it a trade show, or seeing it covered on the Internet."
"Then we'll take all that feedback, sit down together as a group, and then say 'Okay, here's what I like about the game, and here's what I didn't like about the game,'"
When they're interested in a game, they'll approach the Japanese developers or publishers and ask about the North American rights. If a deal is possible, Xseed will ask for a playable build of the game so the whole team can check it out. Everyone at Xseed will spend a week or so playing the game and filling out internal assessment forms to figure out whether it's good or bad.
"Then we'll take all that feedback, sit down together as a group, and then say ‘Okay, here's what I like about the game, and here's what I didn't like about the game,'" Berry said. "And then based on that feedback, we'd have to come up with some kind of basic sales estimate—how much we think the title can sell. And then based on that we would have to put in a proposal to the original developer team or publisher in Japan."
Xseed will make a specific offer, pitching an upfront minimum guarantee ("You will definitely make $XXX") and a royalty rate ("You will make X% of every sale") based on how many copies they think the game will move. At this point, that Japanese team might also be taking bids from some of Xseed's competitors—other niche publishers like Nippon Ichi, Atlus, or Aksys might be interested in the game as well. So the bid is very important.
"What if you found a game that you really, really loved, but you just couldn't justify publishing it because you wouldn't sell enough copies?" I asked.
"That's every single game that Tom likes," Berry said, laughing.
"The one that I really pushed for, actually," Lipschultz said, "was the Hatsune Miku minigame that came in the first expansion pack for Project Diva, called Hello Planet, which I thought would make a great PSP Mini. But yeah. Nobody here really thought that was a great idea."
Hatsune Miku, an auto-tuned android that sings Japanese pop songs, is immensely popular in Japan. It's never quite picked up steam here.
"Tell him the premise!" Chavez said.
"Well it's a game based on an actual Miku song," Lipschultz said, as Chavez giggled uncontrollably next to him. "Basically it's an 8-bit style platformer that is in like a post-apocalyptic world. World War 3 happened. Humanity's been wiped out. But Miku's like an android that was like awoken automatically after a long sleepcycle. You play as Miku trying to find your master. Eventually you find his grave and, like, die at the side of his grave."
(Chavez still couldn't stop laughing.)
"You get to read all these emails about what happened," Lipschultz said. "And hear about, like, the end of the world. And it's billed as like the last love song of the planet. It's a very sentimental, very sappy sort of game, but it's really genuinely touching, and really fun... I thought it'd be a good choice but I couldn't convince anybody."
"A niche of a niche of a niche," Chavez said.
Xseed's office is small, cluttered, and full of personality.
So yes, sometimes games are even too smalltime for a small publisher like Xseed. And their biggest regret, Berry said, is that they can't bring over the sequels to games that didn't sell well, like Retro Game Challenge or Half-Minute Hero.
"I mean, we take so much flack from our fans," he told me, "because they say they bought it and they loved the first one, and why can't we bring over the second one? Well... Half-Minute Hero was probably one of our worst-selling games."
I asked how many copies they sold.
"Just imagine our hypothetical threshold and then cut that by five," Chavez said.
Berry laughed. "Look on VGChartz and then take like 1/5 of that and that's probably it."
Fleeing Square Enix
Xseed started with an exodus.
It was 2004. Just a year before, two big Japanese companies called Squaresoft and Enix had merged to form one bigger Japanese company called Square Enix. And although the merger had gone smoothly for Square's U.S. offices, some of their big American executives were starting to disagree with their Japanese counterparts on how to grow business in the United States. Eventually, Square Enix U.S.A. president Jun Iwasaki stepped down. So did a few other executives, including business development manager Ken Berry.
"A couple months after, he called us all together and said he wanted to start up a new company," Berry told me during a meeting at Xseed's office earlier this month.
There were six of them: Iwasaki, Berry, Square sales manager Sean Montgomery, marketing manager Kenji Mimur, CFO Kenzo Nogimura, and PR head Kyoko Yamashita. Iwasaki gave them all the pitch: first, using his contacts at Square Enix, they'd do some marketing work on a freelance basis. Once they'd gotten off the ground, they'd transition into publishing their own games.
From there, Xseed was born.
"We actually did all the sales and PR and marketing for Kingdom Hearts II even though we weren't a part of Square anymore."
"We actually did all the sales and PR and marketing for Kingdom Hearts II even though we weren't a part of Square anymore," Berry said. "We also pitched in quite a bit for Final Fantasy VII: Dirge of Cerberus, and the movie, Advent Children."
Iwasaki was close with Tetsuya Nomura, one of Square Enix's most powerful producers and the man behind Kingdom Hearts. While at Square, Iwasaki had recognized just how appealing a Disney/Final Fantasy crossover could be, and he'd launched a big marketing campaign for the game. It became a massive hit in the U.S. Nomura was always grateful for that, so even when Iwasaki had left Square, Nomura worked to get him onto their projects.
The newly-formed Xseed also did some marketing research for Namco-Bandai, helping run focus groups during Comic Con to take a look at the Gundam series. But the folks at Xseed didn't just want to do marketing. They wanted to sell their own video games. They wanted to be a full-fledged publisher.
Towards the end of 2005, Iwasaki found out through some Japanese contacts that Sony of America was going to pass on localizing the Wild Arms 4—the fourth game in the popular RPG series that blends giant robots with wild western themes—and the folks behind it were looking for a new publisher. Around the same time, Berry suggested that they go after another RPG: Shadow Hearts: From The New World, a game with a bizarre plot and a fascinatingly intricate combat system.
They got both games. They brought on a company called 8-4 to help with translation on Wild Arms (and a specialist named Jeremy Blaustein for Shadow Hearts), while they handled everything else: sales, PR, production, distribution, licensing, and all of the other fiddly little things that need to be done before a game can be brought to life. They also got funding from a Japanese company named AQ Interactive (a company that, later, would go on to become their majority shareholder).