Bandai Namco: "Every publisher has to focus more on their own expertise"

2022 was a stellar year for Bandai Namco thanks to Elden Ring's critical and commercial success.

As a result, 2023 felt like it was all going to be about maintaining that momentum. When we ask Bandai Namco Europe CEO Arnaud Muller about how well the company has managed to rise to that challenge this year, he first points to Elden Ring's DLC, the Shadow of the Erdtree, announced earlier this year and due to release soon.

But he also points to Armored Core 6, which he says is the current focus in Bandai Namco and FromSoftware's relationship. As we previously reported right after our interview with Muller at Gamescom, the firm expected Elden Ring's success to have widened Armored Core's audience, and therefore anticipated the title to be a success.

And it's fair to say it has been, with Armored Core 6 topping the UK boxed charts, the US monthly charts, the European listings, and sitting among the best sellers of the year globally.

But FromSoftware's titles continued success is not all there is to Bandai Namco's 2023, Muller wants to highlight.

"We’re very pleased with the portfolio, and the variety of games we have in our portfolio," he says, mentioning Naruto x Boruto Ultimate Ninja Storm Connections, Park Beyond, Sand Land (from Dragonball creator Akira Toriyama), and Little Nightmares 3. "So, that’s a lot of games to follow from last year’s momentum with Elden Ring."

"We’re not going to invest $150 million on the next AAA game for a Bandai Namco IP in the west. We’re going to build on small but secure successes"

He continues with a smile: "And then [we have] a very small title called Tekken 8 which you may have heard of. [Tekken] has sold more than 50 million copies as an IP, and Tekken 7 sold ten million copies. So, it’s going to be great, it’s going to be big. [It] really takes the fighting genre to a new level… This is as good as it gets in terms of making the best of Unreal Engine, and being able to polish the game to a level where visually, it looks stunning. We have big expectations [for] Tekken 8."

However, Bandai Namco's pipeline of Western games doesn't look as busy as it's been in other years, we point out. Park Beyond is an already-released live title, and Little Nightmares 3 is planned for some time in 2024.

"The company’s already achieving approximately 25% of its total sales outside Japan – our objective is to reach 50%," Muller says, referring to an objective that's been at the forefront of Bandai Namco's strategy for several years now. "The way we’re going to move from 25% to 50% is thanks to a combination of push of the Bandai Namco IPs and the titles coming from Japan to the overseas market, thanks to our sales and marketing network, and the creation of our own IPs in the Western market.

"We’re doing that with our own studios, Limbic [in Germany], Reflector in Canada, and also the studio partners that we have in Europe, [like] Supermassive. So, in that space, we’re looking for successful but careful initiatives. We’re not going to invest $150 million on the next AAA game for a Bandai Namco IP in the west. We’re going to build on small but secure successes, such as Little Nightmares [and] future games that we have with Limbic as well."

In a sea of shooters all sharing a similar vibe, Little Nightmares 3's announcement was a highlight of Gamescom's Opening Night Live. The franchise was originally developed by Tarsier, which was acquired by Embracer in 2019. The IP remained with Bandai Namco, and for this third entry, the series is getting a new art style, and a new developer in Supermassive Games.

The UK-based developer had already worked on Little Nightmares 2's Enhanced Edition, and is a long-term partner of Bandai Namco with its Dark Pictures Anthology series.

"We didn’t select [Supermassive] because they did Dark Pictures or Until Dawn, we selected them because we knew that they would embrace the IP"

"We’ve had a long history of working with Supermassive, so this is why when we changed studio from Tarsier, we decided to work with Supermassive, because of their understanding of the IP," Muller explains. "We didn’t select them because they did Dark Pictures or Until Dawn, we selected them because we knew that they would embrace the IP, and they had this co-op expertise which we wanted to implement in the next iteration of the IP."

It feels like quite a change of direction for Supermassive, known for its realistic third-person horror games.

"They’re specialised in horror games, telling stories, and I think Little Nightmares is about telling a story, even though the player has to guess what the story is," Muller says. "So it made a lot of sense to work with them, and we’re very proud of where we are now. On top [of that], we’ve announced a podcast – we want the players to explore the IP, to discover the lore outside of the video games."

Bandai Namco's relationship with Supermassive is an interesting beast. The developer was acquired by Nordisk in 2022, but continued to work with Bandai to publish its Dark Pictures series. However, it self-published the latest entry in the anthology, Switchback VR. Meanwhile, last year's The Quarry was published by 2K Games.

"I think they don’t necessarily want to work with one partner," says Muller when asked about these relationships. "I’m sure they have different development lines at the studio. It’s a great relationship, but they’re free to do what they want with their games, and if we don’t see any potential, or if we don’t see any fit in our portfolio, then they can find somebody else. It’s case by case."

The market is quite crowded with big AAA this year, with little space for anything else to succeed. We ask Muller for his read of the current market.

"I find the market quite challenging right now for a few reasons. I think the market is very much polarised on a few very successful IPs. When you look at the numbers outside of a few games, then the market is not necessarily growing. The market’s also supported by this series of hardware subscriptions services, and it’s true that through game sales, both digitally and physically, outside of the few hits, are struggling. So, that is a fact, and I think all publishers are seeing that.

"[But] I think that when you’re able to address your own audience, however big that audience is, there is still an opportunity to really sell and meet your fans’ expectations, and let me tell you why. If you look at the fighting genre, if you look at the Japanese RPG genre, if you look at the games that are coming from anime or manga, they have a very loyal fanbase. So, that market is probably, what? Five, ten, 15%, if you combine the three, of the total market. Within that space, there is growth. And as long as you’re able to provide the right quality, and games that are not just day-one driven, or solo experience, but you have different gameplay modes, different content post-launch, different ways of keeping your audience within that game, then clearly, you have the recipe for success.

"As long as you’re able to provide the right quality, and games that are not just day-one driven, or solo experience, then clearly you have the recipe for success"

"So, it’s not alarming, but I think every publisher has to really focus more on their own expertise. And you can see that from some of the other players. Like if you look at Capcom – Capcom has been good at focusing on Monster Hunter, on Resident Evil, on Street Fighter. And if you do well what you’re good at, then there is clearly an opportunity to keep your fanbase engaged and therefore be very successful."

He takes the example of Little Nightmares, saying that even if it's "not going to be a massive hit in the market," it will sell very well.

"And Little Nightmares will sell very well because we will deliver what the fans are expecting to the right level of quality. And if you do that, then you are on for success. What I would say is that there is probably less space for innovation at a time where the market is, post-COVID, a little bit struggling given the macroeconomic environment, the growth that we’ve expected in the previous years, [and] the weight of subscription. Yes, you need to be clever."

Muller also points to the acquisitions spree that the industry has recently experienced, and how it has now slowed down.

"The consolidation of the industry has really accelerated over the last couple of years. It’s slowing down now, and money is more expensive, and therefore, the ability to raise money to make acquisitions is slowing down. If it makes sense for us in terms of portfolio, in terms of the type of games we want to make, yes, we will look at any opportunity. But not at any cost, and not in a rush, because the market today doesn’t require you to be very aggressive, or not as aggressive as it used to."

The wider economic climate has been slowing down growth that games had experienced over the last five years, Muller points out, though he does acknowledge that growth was accelerated by COVID.

"I think today a lot of games are being delayed. The availability of hardware has been an issue. Of course, with inflation and the macroeconomic environment, then consumer spending has been down. So, it was always bound to slow down. That’s where we are. But if you’re clever in the way you manage your portfolio, the way you manage your development costs, and still keep a level of quality and fans engaged, fine. [It's] easy," he jokes.

Bandai Namco has not been completely unscathed in the wave of challenges that's been hitting the industry though, with Gundam Evolution joining a very long list of online games shutting down in July.

"I think the game is great and worked well in Japan and Asia, but I think outside Japan, we probably struggled to adapt the monetisation well," Muller says. "And I think this is a very big learning for us, but we have big plans for the Gundam IP. [It's] really picking up in the US, it’s getting bigger and bigger. In Europe, this is not yet an area of focus for our group. It is clearly growing in Asia, Australia, New Zealand, and the US. Next is Europe. But when it will grow, then we will come big with a 360-degree approach and with big ambitions, because it’s the biggest IP of Bandai Namco. So, watch that space. Gundam will be an area of focus in the very short-term for Bandai Namco Europe."

"Gundam will be an area of focus in the very short-term for Bandai Namco Europe"

In the meantime, Gundam fans can sate their appetitive for the IP and other Bandai Namco properties via merchandise, with Bandai Namco making a surprising move earlier this year and opening a store in London. In a post-COVID world, we ask Muller about the importance of these types of physical experiences, and why the firm opted for the UK.

"The store we’ve opened in Camden is kind of a flagship store for us to showcase the variety of Bandai Namco products we have," Muller says. "It’s not just games, but we’ve got Gashapon, we’ve got Ichiban Kuji, we have toys, we have figurines. So, it’s one way to address our consumers directly with the wide range of projects that Bandai Namco has to offer. It’s also a nice location where I think we see a lot of potential for our IPs, and what we’ve noted is that anime IPs are clearly becoming more and more popular in the UK.

"During COVID, a lot of people in the UK have started to read manga and [they] are becoming increasingly popular in the UK to a point where IPs such as One Piece, Dragonball, or Naruto are starting to pick up. In the past, it was of course Japan, and then in Europe, it was France, and then Germany, or southern Europe, where some of these IPs have always been popular as well. And the UK was always lagging behind. It’s clearly changing. And I think that Bandai Namco has a big opportunity in the UK."

Sign up for the GI Daily here to get the biggest news straight to your inbox