Konami has been in the headlines a lot lately. First up were those troublesome rumours regarding the impending departure of Hideo Kojima, creator of the Metal Gear series and arguably the Japanese company's most valuable and famous employee. It would appear that Kojima is set to part ways with Konami when he completes work on Metal Gear Solid V: The Phantom Pain, a massive blow to the industry veteran and the first change of work Kojima will have experienced since he joined Konami almost 30 years ago.
Next up was the cancellation of Silent Hills, the next iteration of Konami's famous survival horror brand which would have seen famed Hollywood director Guillermo del Toro teaming up with the aforementioned Kojima to reboot and revitalise the flagging franchise, which has spawned several sequels and movies since its 1999 début as a rival to Capcom's Resident Evil. A playable teaser of the game launched exclusively on the PlayStation 4 last year, but this has now been removed and Konami has confirmed that Silent Hills is no longer in production. Add to this the news that the Japanese company has dropped its listing on the New York Stock Exchange, and you've got a hat trick of bad tidings for fans of the firm.
So what exactly is happening within the walls of this famous publisher, which can chart its history back to the '60s but is unquestionably more famous for being a prolific force in the global video game industry? Some have shared the opinion that Kojima has become too big for his boots and his forthcoming departure has little to do with the temperament within Konami's Tokyo Midtown HQ. Others have pointed out — and rightly so — that the delisting from the New York Stock Exchange actually sounds a lot worse than it really is; Konami trades the majority of its stock in Tokyo, with less than half a percent of trades occurring in New York — the removal is therefore more of a tactical move, saving the company the costly fees associated with keeping the listing active.
However, as Rob Fahey points out in his excellent editorial over at GamesIndustry.biz, these events all form part of a much bigger picture — and it's one which will make grim reading for those who have been playing on Nintendo consoles since the days of the NES. There's no easy way to say this, but the signs appear to indicate that Konami is taking steps to extract itself from the console game business - a business it entered with Nintendo's Famicom system back in the 1980s.
It might seem like a fairly extravagant or even provocative prediction, but Fahey's argument is incredibly persuasive. The most shocking facts relate to Konami's dwindling line-up of console releases; back in 2012, the company published around half a dozen titles worldwide, but in 2013 it could muster only two — Metal Gear Rising: Revengeance and Pro Evolution Soccer 2014. The following year was very much the same; 2014 saw Castlevania: Lords of Shadow 2, Pro Evolution Soccer 2015 and Metal Gear Solid V: Ground Zeroes — the latter arguably being more of a demo than a full game. Granted, there are a tiny number of Japan-only releases to add to those figures, but they're hardly smash-hits on a global scale.
Astonishingly, Konami is yet to publish a game in 2015, and it's likely that Metal Gear Solid V: The Phantom Pain will be the company's only major release this year. While other publishers have thrown themselves into next-gen - or current-gen, if you prefer - development, to date Konami's only full PS4 and Xbox One title is Pro Evolution Soccer 2015; for Nintendo fans, the publisher has gone from being a third-party legend to fringe player, with its last major Nintendo releases being Metal Gear Solid: Snake Eater 3D, Castlevania: Lords of Shadow: Mirror of Fate and Yu-Gi-Oh! Zexal Clash! Duel Carnival — which came out in 2012, 2013 and 2014 respectively. Konami is yet to release a single Wii U retail game, although Nintendo has published several of its classic titles on the system's Virtual Console service.
The facts speak for themselves; Konami is clearly scaling back its console publishing duties. Fahey points out that since 2009 — when "digital entertainment" accounted for 60 percent of Konami's total revenue — the cash the company generates from video games has fallen. In the financial year ending 2014, "digital entertainment" accounted for less than half of Konami's revenue for the first time ever. In the first nine months of the current financial year, it contributed 43.6 percent. Now some of this can clearly be attributed to Konami's near non-existent release schedule and the death of its arcade business, but "digital entertainment" doesn't just mean console games. It covers a wide range of other pursuits — including smartphone gaming, browser-based games and Yu-Gi-Oh!, Konami's very own Pokémon challenger which continues to generate cash, despite its age. Like so many of its rivals, Konami has poured resource into mobile and social gaming and has been rewarded with encouraging results. That 43.6 percent could, then be hiding an even more shocking fact - Konami's console game revenue has dropped so dramatically that even successes in newly-emerging sectors cannot stem the tide.
While looking at these figures it's important to note that Konami has found financial success in sectors unrelated to video games. It generates a considerable amount of revenue from slot and casino machines, as well as Japan-only Pachinko machines. It also presides over a growing network of health and fitness clubs — this portion of its business now accounts for 35 percent of total revenue. You could argue that Konami is merely doing what any other company with multiple business interests would do — it is going where the money is. The video game brands that it owns are certainly big-hitters, but they're incredibly costly to produce — especially on the latest platforms — and Konami simply doesn't have enough of them. Metal Gear Solid V is a good example; it has taken Kojima Productions several years and millions of dollars to craft this latest release, yet traditionally Metal Gear games fail to reach the same stratospheric commercial heights as Activision's Call of Duty or Ubisoft's Assassin's Creed — and we get a new offerings from both of those franchises every single year. It could be that Konami's bean-counters have simply looked at the balance books and decided that AAA console development isn't delivering the profits required.
As Fahey himself is keen to point out at the end of his piece, his thoughts are merely speculation at this point and Konami has made no official announcement regarding its stance on the console game market. In fact, the firm seems committed to keeping the Metal Gear universe alive following Kojima's anticipated departure. However, Fahey also states that Konami's downscaling of its console business is "deliberate and planned", and looking at the facts it is almost impossible to disagree. Konami was one of the many Japanese firms which benefitted from Nintendo's dominance during the '80s and early '90s, creating or working on many smash-hit franchises such as Metal Gear, Castlevania, Teenage Mutant Ninja Turtles, Goemon, Gradius, Contra, Parodius and many more besides. The publisher has contributed a staggering number of must-have games for Nintendo formats over the past three decades — something that any dedicated fan will attest — and to think that it is leaving the console game sector after establishing such an illustrious reputation is saddening; still, business is business and short of a complete about-face, it would appear that Konami's exit is almost a foregone conclusion.