AUG. 28, 2014 • Much in the same way Nintendo Co. Ltd. has diligently nurtured a wholesome reputation in the video games it publishes, Natsume Inc. has successfully followed a very similar blueprint starting with the Harvest Moon franchise. That farm simulation series was a trailblazer back in 1997 when it was released on the 16-bit Super Nintendo Entertainment System. The title remains very popular today and laid the groundwork for franchises such as FarmVille and Farm Heroes Saga.

Natsume Inc. started off in 1988 in Burlingame, Calif. as an offshoot of Natsume Co. Ltd. in Tokyo.  Both companies remain closely related but the U.S. operation has been run independently for many years. When Yasuhiro Maekawa took the reins in Burlingame during 1994 there were under 10 people working at Natsume. Since then the company has released over 125 titles worldwide. Today Natsume is pursuing digital distribution via Sony and Nintendo platforms, as well as mobile releases on iOS and Android. DFC went to Maekawa to better understand how this diminutive publisher has gotten to where it has and the challenges of adapting to the online marketplace.

DFC: Since there is often some confusion please give us an overview of how Natsume Co. Ltd. and Natsume Inc. are related. How many people work Natsume Inc. and how may projects are you currently working on?

Hiro: Natsume Inc. acts independently of Natsume Co. Ltd. There is a relationship between both companies but Natsume Inc. is not a subsidiary of Natsume Co. Ltd. Natsume Inc. is free to develop and license titles from any partners we see fit. Thus, all decision making starts and ends with the office in the U.S.

DFC: What was the reason Natsume Inc. needed to open its own office in Tokyo during 2013?

Hiro: As I mentioned earlier, we we operate independently of Natsume Co. Ltd. and we needed an office close to many of our development teams. Over the past three or four years we have been developing a lot more titles than in the past, whether for iOS, 3DS or other platforms and we needed an office to oversee all of that.

DFC: What is Natsume’s guiding philosophy on game design and publishing?

Hiro: We basically have two fundamental philosophies when designing and/or publishing a title:

Niche Marketing and Differentiation Strategy: We focus on markets and genres that are not as widely popular as others at that time. We will release an original title in such a market and genre that we think might have potential to grow into a franchise by investing time and money. One example of this is our Harvest Moon franchise. When Harvest Moon was first released, the simulation/farming genre was pretty much nonexistent. With time, money and care, the Harvest Moon brand has grown worldwide.

Family-Friendly Gaming: Our company mission is to “Make Everyone Happy” with exciting interactive entertainment software for the entire family. Our games are non-violent…no blood, no killing, no nudity, etc. We instead focus on games that offer a peaceful and friendly environment with a heartfelt message.

DFC: We know Natsume Inc. started off as a one-person operation in 1988. How has the division grown since? What have been the challenges since then and what are the future growth plans for the division?

Hiro: I took over this company in 1994 and at that time we had 5 employees. This company was reorganized in 1995 and I restarted the company alone as a one-man company with a new business model. At that time, Natsume Inc. was selling products directly to retailers in the same way all other publishers were doing. This was a lot of work and I soon realized that it was very difficult for a one-person company to continue direct sales to the various retailers for a variety of reasons including physical inventory and price protection issues.

I knew I had to do something different, so I completely changed our selling system from direct sales to a distributor method. This meant a distribution partner would be dealing with the direct sales to retailers. This was a huge challenge at the time, as retailers were not interested in purchasing front line product from a distributor… mainly because it had never been done. But in the end it paid off and to this day we still sell all our frontline titles via our exclusive distribution partners.

In 1996 I met with the director of Pack-In-Video, who introduced me to a Japanese Farming Simulation game produced by Wada-san. Later I named that game Harvest Moon and 1997 was the year when the first Harvest Moon for SNES was released.

I had never seen a farming simulation game before and I liked the heartwarming gameplay very much. At that time there was no video game genre for a farming simulation game and almost all of my business associates in the U.S. said that it would be a mistake if I brought this title to the North American market.  But I knew that America had a large agriculture base and it was my strong belief that this peaceful and heartwarming game could have great potential to grow.

It was 1996 when I first met with Wada-san and soon I found that we had a lot of things in common, such as our way of thinking. It is my strong belief that a relationship based on mutual trust and integrity is more important than anything else and we definitely shared this value throughout the release of the Harvest Moon series produced by Wada-san. Something I don’t think people really know is that I have been involved in every Harvest Moon title, more than 30 titles released in the past 17 years!

Lately, we’ve had to diversify our packaged goods business to more of one with a focus on digital download. This has helped greatly to continue growth. Currently, we have a large variety of titles available for the Sony PlayStation Network and Nintendo eShop. In addition, our digital download business has allowed us to continue our business philosophy of releasing unique titles in niche markets. We also have a variety of titles available on Apple’s App Store and Google Play. Our goal is to continue this physical and download business model for future growth.

DFC: What markets does Natsume Inc. publish in?

Hiro: We publish our packaged titles in North and South America and sometimes in Europe. However, we publish our digital titles worldwide via PSN, eShop, iOS and Google.

DFC: How do you market your titles, and what differences are there in your strategies between the Americas, Europe and Asia?

Hiro: Each and every title is unique, and we tailor our marketing strategy to each one differently. A title with a physical and digital release will be marketed differently than one that is digital only. In addition, the marketing strategy differs from platform to platform and in different territories. In regards to Europe, we mainly rely on our partners that we team up with there…they know those territories better than we do.

DFC: Harvest Moon is Natsume’s most successful franchise, how do you keep the series fresh and consumers interested?

Hiro: We pay careful attention to our fans and the media… what works, what doesn’t, suggestions, comments, you name it… we listen. We also use our own experience with the series to keep it new and interesting. We have paid extra attention to keep the world of Harvest Moon consistent through localization.

DFC: How well does Harvest Moon do in North America versus other world markets, and why?

Hiro: The Harvest Moon franchise has performed very well in both the U.S. and Europe. Since our first Harvest Moon released back in 1997 for the Super Nintendo, we have localized and released more than 30 games. In the past 17 years, we have established a dedicated and devoted Harvest Moon fan base of millions in both North and South America, and Europe.

DFC: How well do Harvest Moon players migrate to other Natsume titles, and why?

Hiro: Harvest Moon is a unique and special game. It was one of the first life simulation games that allowed players to marry and raise a family, and over time, our fan base has become very diverse between boys/men and girls/women, as well as causal and diehard gamers. So we started to see quite a bit of migration from Harvest Moon fans to other franchises we make. Another reason why this might be is due to our philosophy of family friendly gaming… the games we put out all have that in common so someone that enjoyed playing Harvest Moon would enjoy playing Hometown Story or Gabrielle’s Ghostly Groove.

DFC: How has Bust-a-Move 4 done as a PlayStation Network Store offering? Has the game found a larger audience between the PlayStation 3, Vita or PSP?

Hiro: Bust-a-Move 4 is doing quite well on PSN. Unfortunately we do not have specific data on which Sony platform is doing better than the others.

DFC: Will you be releasing other classic titles from your catalog as digital downloads? What is your current strategy in this regard?

Hiro: Most definitely, yes.  We are currently working with Nintendo on digital versions of the GBC and GBA games, plus Sony on some of the classic PS and PS2 titles, all of which we hope to have out soon.

DFC: Similarly you published a localized version of Kemco’s End of Aspiration as End of Serenity in June via the PlayStation Network for the PSP and PS Vita. How much effort was put into the localization and what has been the reception?

Hiro: We have been working closely with Kemco on quite a few titles. They are a true pleasure to work with. Currently, End of Serenity is doing nicely in North and South America and we hope to release it shortly in Europe. A great deal of effort was made to make sure the localization and “feel” of the title fit into Natsume’s standards.

DFC: How much extra adaptation had to go into bringing End of Serenity to Sony platforms? Please provide details on what had to be done and why?

Hiro: We have a very dedicated team that are extremely fond of old school RPGs, so they really wanted to make sure veteran gamers had a sense of nostalgia and that new gamers would fall in love with a great genre.

DFC: What is your localization checklist for foreign markets? How extensive in your localization do you like to be?

Hiro: It really depends again on the title, platform and whether it is a physical or digital release. Some titles remain in English for different foreign markets while we localize others depending on the fan base of an existing franchise. But one thing is always at the top of our list: to “Make Everyone Happy.”

DFC: What companies do you work with to localize content?

Hiro: We have a few companies and individuals we have been working with for some time. Some localization is handled internally but it really depends on the product’s timeline.

DFC: Looking ahead, which do you expect to drive more revenue: digital distribution as in these PlayStation Network releases, or mobile titles?

Hiro: Today, we feel that digital distribution of classic and new content titles on Nintendo’s eShop and Sony’s PSN will drive revenue. However, we are working daily to improve our content and revenue stream with our mobile titles. Hopefully in the future we will see more from that.

DFC: When Nintendo’s Tomodachi Life received criticism for not supporting same-sex relationships, Natsume said this was an option that would be considered for its future titles. What are the issues pro and con given you are dealing with similar demographics as Nintendo?

Hiro: We always listen to the voices of our fans and media very carefully. Based on that, we will think about how to make our fans happy.

DFC: You have F2P mobile titles for iOS but not for Android. As these are not paid titles, why have you stayed away from Android?

Hiro: Actually, we are in process making all our iOS titles available for the Android market. Hopefully those should start showing up by the end of this year.

DFC: Please give us an overview of your mobile publishing strategy. What franchises are a good fit for mobile?

Hiro: The mobile market is very diverse when it comes to games. Some consumers want a short, twitch based experience, while others want to spend hours building and creating something. Very much like our console philosophy, we will focus of family-friendly games that have potential to grow. Thus, we feel Harvest Moon, Reel Fishing, Gabrielle and our Ninja series fit well and we plan to support them now and in the future.

DFC: How do you monetize your mobile content?

Hiro: Currently, we are focused on F2P with in-app purchases. Our goal is to introduce mobile players to our unique franchises first.

DFC: Natsume has aggressively used social networks to engage with consumers.  Please detail how you utilize social media and what tangible benefits have accrued?

Hiro: When I first started at Natsume Inc. the only way we could get in touch with our consumers and players was when they wrote a letter or called for gameplay help. Times have changed drastically since then and we do everything we can to stay in contact with our fans whether it’s via Facebook, Twitter, Tumblr, our Natsume forums or anything else our SNS group can set up. It is extremely important to communicate with our fans – especially Harvest Moon fans – to keep them updated on what is going on.

 

Company Name	Natsume Inc.
Headquarters	Burlingame, California
Founded	1990
Employees	Under 25
Parent Company	N/A
Subsidiaries	None
Website	www.natsume.com
Executives	Name	Title
	Hiro Maekawa	President & CEO
	Graham Markay	Vice President of Operations
Business Model	Natsume Inc. is a worldwide developer and publisher that specializes in unique and family-oriented interactive entertainment software for a variety of platforms.
Number of Products	Over 125 Titles on a variety of platforms.	Popular franchises include Harvest Moon, Reel Fishing, Gabrielle and Hometown Story.
Type of Products	Console, handheld and mobile titles	100+ console and handheld titles, and 10+ mobile titles.
Top Products	Harvest Moon	Harvest Moon DS (DS) Harvest Moon: A Wonderful Life (GC) Reel Fishing (PS)