Not too long ago, Konami was viewed as one of the top publishers in the video game industry. Today, on gaming message boards, its devotees are questioning its longevity — even as it publishes its biggest game, arguably, ever.
Metal Gear Solid V: The Phantom Pain is the latest entry in the fan favorite series. Overseen by legendary developer (and Konami icon) Hideo Kojima, it’s a title that was initially announced more than two years ago—and by all appearances, it will be his last game with the company.
To put that in perspective, imagine if Mario creator Shigeru Miyamoto and Nintendo went their separate ways. Metal Gear is a 25-year-old franchise for Konami (KNM). And while the publisher has other titles that became bigger parts of the popular culture — like Dance Dance Revolution and Frogger—Metal Gear was the series that was the flagship for core gamers and it remains the company’s biggest console title these days..
The most frustrating part of Konami’s current status is the company’s refusal to clearly answer basic questions. In March, Kojima’s name was removed from the Konami website. In July, it was taken off of the game’s box art. His studio, Kojima Productions, was shut down as well. But as enthusiast press and fans asked what it all meant, the company deflected questions — issuing just a terse statement reading “Konami Digital Entertainment, including Mr. Kojima, will continue to develop and support Metal Gear products. Please look forward to future announcements.”
Kojima is widely expected to leave the company before the end of the year — and, not surprisingly, is foregoing any media interviews to support the launch of the game.
Analysts, though, say the furor and speculation that’s taking place in the fan community about the overall state of Konami might be a bit overblown. They stop short, however, from singing the company’s praises.
“I wouldn’t be very bullish or too concerned about the company,” says Sartori Bernbeck, manager of insights and analytics at EEDAR. “There’s no sign anything is going wrong in the corporation — or that things are falling apart, but at the same time, there’s nothing to tell me they’re [working on] something huge that will put them above anyone in the industry.”
By any definition, 2015 has been a rough year for Konami. In March, it underwent a major structural reorganization. The next month, it delisted itself from the New York Stock Exchange. Also in April, Konami cancelled Silent Hills, an eagerly anticipated Kojima game the company had announced just eight months prior.
The cherry on top of all of this was MGS 5: The Phantom Pain’s costs. Japan’s Nikkei, in April, reported the title’s development costs had topped $80 million, a number that has certainly escalated since.
That said, the game is boasting some of the best critical review scores of the year — and is expected to be a substantial hit, though no analysts expect it to post sales numbers anywhere close to a Call of Duty or Halo game.
Despite the recent turbulence, it’s a bit too early to start writing Konami’s corporate obituary. Even if it does officially part ways with Kojima, the company has already committed to making more installments in Kojima-created franchises, saying in May that “the Metal Gear and Silent Hill series … are also extremely important to Konami. We have nurtured them with care over many years since their inception, and will continue to produce products for both franchises, but we are not currently at a stage where we can announce the path these future titles will take.”
The company is also increasing its focus on mobile games, a bet that’s paying off. In its most recent earnings statement (for the quarter ended June 30), it saw its profits jump from ¥1.64 billion ($12 million) to ¥4.28 billion ($34 million)— a 160% increase.
Beyond core gamer friendly franchises like MGS and Silent Hill, the company also has Pro Evolution Soccer, a franchise that has sold more than 80 million units life to date, and Yu-Gi-Oh. And it has a wide range of other businesses, including gyms, slot machines and pachinko.
Will the tempest over Kojima and MGS 5 create a wedge between Konami and its fan base in the U.S.? Possibly a slight one, says Bernbeck, but ultimately, this is a sign that the company’s chief focus remains, as it always has, on its domestic audience, rather than that of the western world. And these days, that audience is much more interested in mobile games than console titles.
“I think the biggest problem with this was a lack of communication,” he says. “No one really knows what’s going on and there hasn’t been a strong portal of communication between the company and its fans. … Like any other Japanese publisher their history is rooted in catering to the Japanese culture first. So when you look at the shift of Japanese consumers, with their mobile lifestyle, it’s very easy to see why certain Japanese companies [like Konami] are moving away from traditional consoles.”
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