(15/03/08) The Stinger Report has learned from various sources that though the game may be achieving record revenue in Asian countries, Namco's satellite amusement sales operations are thinking of abandoning selling 'Tekken 6' to United Kingdom and United States operators. The state of the amusement scene has seen a strange pattern to business decisions, but the Stinger can reveal secret Grey Import shipments of Tekken kits hoping to sidestep obstructions and the blocking unauthorized 'International Version' cabinet purchases. TSR, speaking to Namco executives regarding these rumors and the rational behind this controversial decision, can reveal that sources close to them have prepared to reveal the situation – as well as the implications for the next must have coin-op 'Street Fighter IV'!
One of the most talked about amusement releases of recent times has been Namco Bandai Gaming's 'Tekken 6' (PS3 Hardware). The public clamber for the game at JAMMA'07, ATEI'08 and AOU'08 was only slightly overshadowed by player hunger to see 'Street Fighter IV' (Type-X² Hardware) Recently, though, Japanese revenue numbers of Tekken's earning power has seen record figures, and asks questions about the international release!
The international interest in the game was underlined when hoards of fans broke the security of the ATEI'08 show in London to play the game – a situation that caught Namco Europe off guard (see Stinger #616). However, it has been rumored from various sources that likewise in America after an equally down-played appearance at IAAPA'08 (see Stinger #601). Consideration was given to abandon release of the game in the UK and USA - an alarming situation that seemed to have no official confirmation.
The Stinger Report approached the key executives at both satellite divisions of Namco towards gaining an official statement on these rumors. The contact was made at what is usually the busiest period for the amusement sales – the Easter / Spring Break buying period. This is a very important revenue stream for manufacturers in America and Europe. Add to this the build up to the ASI exhibition – the first big show of the US season – and it was not surprising that no reply was forthcoming.
Well placed sources to Namco stated off-the-record that another reason for the tight mouth before ASI was that they had hoped the situation regarding Tekken would have fallen off the radar. The company's international division felt lumbered to even have the machine on their books as they saw no real demand. They would be happy to be shot of the responsibility to have to sell it into a market they felt depressed - especially as it was considered a high price piece of 'niche' hardware.
Where with Tekken 5, Namco America had worked extensively on 'localization' (translation and hardware alteration to suit market requirements) the corporation did not want to spend so much on an already expensive and impractical import. Rather than confirming they had abandoned selling the machine, they hoped it would just go away.
This news comes even though the game has broken revenue records in Japan for this genre – supported by phenomenal interest from players in the UK, with the installation of a single unit at London's Trocadero amusement venue. Namco Europe has distanced itself from the hard core Tekken fans with this title, limiting test sites and IC (Integrated Chip) card availability.
With T6 the difference in player relations between Namco Bandai Gaming in Japan and the satellite is stark. In Japan the AM R&D team has worked closely with the player base, listening to their suggestions and requests and shaping the machine's play accordingly. Previously Namco America had worked incredibly closely with the players – the 2004 'Tekken 5' (System 256 Hardware) US cabinet had been specially developed by the excellent American team. The members of this had listened to players including the Joypad home game controller ports, creating localization and player based information; sadly with T6 Namco, Japan had other ideas.
Already released in Japan, South Korea, Taiwan, Hong Kong, Philippines, New Zealand, and even Canada; the game has seen record breaking earning – supported by the secondary spend of the online connectivity (ranking) service and the purchase of IC cards So why not the UK or the USA? The Stinger Report approached a number of trade operator sources about Namco executive's claims of a lack of interest in buying the game.
A major difference in the 2004 success of 'Tekken 5' (System 256 Hardware) and the new release was blamed on the difference in pricing. Internationally, Namco charged over $5,000 for the cabinet for T5 – a cabinet that confirmed to the norms usually requested by operators. In comparison, T6 sits in a unique (Japanese style – A69) HD sit-down cabinet. It is best operated with accompanying connected cabinets and display screen – at a price of $16,000 per unit!
For those who are not familiar with the Asian cabinet: the twin player single screen unit, comprising a High-Def flatscreen display (the most impressive deployed ever for a fighting game) also comprises twin IC card readers - all rounded off with an impressive audio package. The machine in Asia is operated in groups of four units with a control display and IC card dispenser. [http://www.spong.com/editorial/r/e/reportamus265369l.jpg]
It has been understood that the Japanese executive team have been adamant to not create a 'territorial' version of the game (placed in an upright US style cabinet, or to include Joypad ports as with T5), or consider selling kits. It was felt that the US market was not worth the effort and that this game could be used to force those surviving US and UK operators to step-up and embrace new thinking and methodologies in amusement operation.
But the fundamental sticker-shock can not just be blamed on Namco ramping up the price for a HD cabinet – T6 runs on the Sony PlayStation 3 arcade derivative. It is known that since the days of the PlayStation 2 'System 256' arcade derivative Sony has become disinterested in supporting amusement. The PS3 arcade architecture has not even been given a designation – Sony is only interested t in supporting the Tekken sequel due to what it can offer as additional marketing support of the planned consumer release of the game.
But as the Namco international satellites miss-read the hard –core fan's interest in seeing Tekken 6 outside of Japan, working against their hopes to dictate where the game will appear; they are about to be surprised again – because Tekken 6 is coming to America and the UK!
In a major vote of no confidence in Namco's satellite operation, T6 machines have been illicitly purchased and shipped into venues – in a show of defiance 'International Versions' of T6 purchased via Asian sources by US and UK sites. Venues such as 'Planet Zero' in Houston Texas, have installed a T6 set-up – Planet Zero is not an arcade or FEC, but an Anima and comic store. Revealed by the player fan site SDTEKKEN, a growing number of retailers are looking at T6 machines. Another venue in California ('Super Arcade') have confirmed purchasing an International version cabinet from Hong Kong – being shipped for appearance in a few weeks.
Note – The Stinger Report will be visiting the Californian 'Super Arcade' venue in order to see how the players and operator take to one of the first US operations of 'Tekken 6'. See below for a report on what we find and the reaction to the machines appearance, with a question on if operators want more than just gun games and drivers, will they have to go directly to Asia?
Another example of this move to bring the machine to venues on operators 'own terms' is the appearance of T6 board sets (kits). They are being installed in conventional upright fighter cabinets – one Southern Californian amusement distributor selling this system in a package they feel the market can afford. What Namco Bandai Gaming executives in Japan will think of their satellites - if 'Grey Import' versions of the machine do actually sell in numbers - is another question.
However sources close to Namco's International divisions stated that they are prepared to block those using unauthorized routes (Grey) to import machines. Operational issues regarding official IC card availability (a card can only be used 200 times), the issue that international systems will need to be hooked-up to the online component of the game for updates, and that unauthorized machines will be locked out by Namco.
What this could all mean:
Many operators spoke of the high price of the T6 set-up as a reason for their indifference to run the game, others complain of the cabinet not being right for their facility – as always in amusement, buyers able to come up with more reasons not to buy than to buy. It was also stated that the PlayStation 3 consumer release has been confirmed for November 2008, so operators claimed they would have too small a window - as an amusement exclusive - to see a return in their investment.
A more conspiratorial note was struck recently following the appearance and reaction to T6 at ATEI'08. It was revealed that Namco Ltd., Consumer Division Namco Europe had dismissed that T6 would actually be seen at the arcade show. When questioned by players, they stated that Namco would not be releasing the arcade version in the UK as they felt there was no industry. On its appearance and fan site coverage, an angry outburst was recorded from consumer division executives. They claimed that they did not want the UK gamers playing the arcade version as it would 'dilute' the Tekken brand and affect the scheduled consumer launch!
Namco's European consumer division has a reason to be angry as the proposed consumer release of Tekken 6 will not stand up too well to comparison with the arcade version. In Europe the consumer release will not have the much hyped connected features, and as the PS3 Hardware is clocked three times faster than a conventional PS3 console, this limits how close the consumer version will be to the amusement version. Recognition of this has not helped Sony or Namco consumer operations; in a crowded market for fighting games, these operations may want to apply pressure to limit their headaches.
There seems to have been a decision not to heavily promote the arcade game before it arrived on test in America and the UK. Some operators say that their Namco rep's had avoided mentioning the game. Some feel that the plan not to sell the game was promoted to Japanese management and that Namco has been working hard to right off the interest as just a few 'hard-core' gamers and not a real representation of the player base in the respective territory!
Breaking Stinger News – The appearance of the consumer version has been used by some as a reason not to invest in Tekken 6 amidst initial claims from Sony consumer division that the game was scheduled for a November 2008 release. It was now reported on certain sites that US players will have to wait till 2009 (April) to get their hands on the game for their PS3 consoles. This will underline the missed revenue opportunity by some operators.
There is the possibility that the amusement factory indolence to try and sell products that fall 'outside the box' of previous sales methodology could also effect the entrance of the second most anticipated amusement title this year. Capcom's 'Street Fighter IV' (Type-X² Hardware) will also be sold in a high price cabinet configuration – best operated with IC card and broadband, and will need special marketing.
Some observers see the trial and tribulations of the T6's international release as a symptom of the possible collapse of the distribution structure in the States. The products that do not fall into a specific profile are unobtainable through conventional sources, so seeing the creation of a Grey-Market for products. Operators wanting to support their player base are going outside of convention to get their games.
It was leaked to the Stinger through sources in Japan and America that Capcom had gone through a period of evaluation from US distributors to register their interest to sell the SFIV products. This expired at the end of March, and threw up no interested parties for the $14,000 proposed cabinet. US distributors had already started to downplay the market worth of the game at ASI, knowing full well that they would not be stocking it.
But it was the news of the sudden spate of Grey-Imported (Direct-Purchase) T6 machines that sent a shudder through distribution ranks as they started to realize that their intransigence to offer the market what they wanted could see themselves relegated as obsolete – it seems amusement sales has become the industries' worst enemy!
Stinger Field Report -- Tekken 6 in SoCal
The Stinger Report made the time to see the possible new trend in amusement operating – as venues have to go direct to get the video content their players are willing to pay-to-play! The Stinger going to the first Californian recipient of the latest Tekken series – a game that Namco America said there was no demand for!
The 'Super Arcade' is a mid-sized arcade (36 operational machines), sited adjacent to the Mt. San Antonio College. A heavily themed Japanese mall location common to Southern California, the arcade venue is filled with a treasure trove of Asian games that never received mainstream release ('Beatmania II DX II RED' or 'Keyboard Mania 3rd Mix' for example). The site caters for a predominantly Asian clientele, but also local hardcore repeat players.
On a Monday morning visit – on the day the schools went back from the Spring Break holidays – over four players hoarded round the machine; a brand new T6 cabinet (Asian HD sit-down – known as a A89 – and installed March 18th at the site). The operator busy repairing at 'Time Crisis 4' machine recognizes the T6 is a phenomenal player magnet. True, the sites 'Maximum Tune 3' was being played, but the interest in T6 was phenomenal, players competing and returning to battle – tokens lined up to denote who was next to play (though also lined up IC cards have been used in the same way).
The site had a stash of T6 IC cards at $6 a throw. A coin token site, the game was being run at two tokens a bout (4 tokens = $1). Funnily enough, just as the Stinger representative sat to watch a few matches the coin mechanism had to be cleared of a jam, an example of the hard playing this cabinet is receiving – good days seeing over 20 players waiting to play.
The International (translated) cabinet was not a connected (online) unit, meaning that player rankings are not online at the Namco Bandai website, and that the time-release character element will be machine automatic; it is unable to receive updates. Sources are saying that Hong Kong, Philippines and Australian machines are run in this fashion. The Asian countries' TEKKEN.NET (ALL.Net) version needs mobile phone and online connectivity - not available outside of Japan and Korea.
Shipped from Hong Kong, this machine was one of four units in the USA in March and only one of the few Namco cabinets. Original claims that no T6 machines would make America have proven ill judged as another ten units (both kits and cabinets) are heading Stateside. There is growing concern that rather than encouraging a rethink on strategy, this Direct Purchase, sidestepping Namco America, will only see further entrenchment towards supporting popular niche products - such as 'Street Fighter IV'.
The amusement trades intransigence to investigate new sales models, or embrace the loyal player base will see a two-tier US market, possibly encouraging the much speculated split in video and redemption amusement business!
News Story with thanks to Kevin Williams. Please visit www.thestingerreport.com