More mergers predicted for Japanese videogames publishers

As the next generation of hardware enters the market, major Japanese publishers may look at mergers to raise funds and combat escalating developments costs, according to a report from Bloomberg.

The suggestions in the report, which takes into account the recent merger between Namco and Bandai amongst others, echoes the general sway of the Japanese market as Square Enix (already the result of a previous merger) recently bid for the acquisition of Taito.

Not everyone is convinced by the findings however, especially Capcom spokesman Ryosuke Tanaka. As quoted by Bloomberg, Tanaka said that the company has not been involved in any merger or acquisition in its 20-year history.

Despite Capcom's suggestion that the company is intent on retaining its independence, the Bloomberg report is not alone in highlighting the Japanese publisher as a target for merger or acquisition. According to an analyst at Cosmo Securities in Tokyo, "Capcom is probably the most likely candidate for acquisition or merger out of the remaining large companies. The company is in a difficult situation financially. The most effective of possible combinations for Capcom would be if Sega Sammy bought the company."

The other major firm indicated in the report as a prime candidate for a new merger is Konami. According to Konami executive officer Michihiro Ishizuka, the possibility is already under consideration.

âRising costs and falling profit margins will speed up consolidation in the industry,â Ishizuka stated. âBuying companies with know-how and infrastructure for online businesses would make a lot of sense for us.â

Konami has already purchased Hudson Soft, and bought stakes in toy manufacturer Takara and developer Genki. The company also own Japan's largest fitness gym operator, People Co. and is in the process of re-branding the gyms under the Konami name.