《铁拳》制作人原田胜弘离开万代南梦宫，在SNK支持下创立VS Studio

When Katsuhiro Harada announced his departure from Bandai Namco last December after more than three decades, fighting game fans were left dejected. Many feared the retirement of the driving force behind Tekken would deprive the genre of one its remaining greats, particularly so soon after the passing of Dead or Alive creator (and Harada's sparring partner) Tomonobu Itagaki two months before. Those fears proved unfounded when the combative creator announced the creation of VS Studio, bankrolled by SNK.

Harada says his decision to leave his longtime employer wasn't due to any one reason, but more about a feeling that it was time to take a new path.

"As I approached 50, I started thinking about how I wanted to spend the remaining 10 years of my career as a game developer, given that the standard retirement age in Japan is around 60," he says, adding that he had imagined that by the time he reached that milestone, Tekken would be on around its 15th entry. "We used to release one game a year, but now it can take five years to make a single game. By the time I turned 50, I realised I might only have time to make one more game, so I wanted to try something new."

Here comes a new challenger

An industry where layoffs and closures continue unabated is a daunting environment to open a new studio. Even before leaving Bandai Namco, Harada got a taste of the state of the industry when colleagues from independent studios came to him for advice about challenges they were facing.

"It wasn't as if I left Bandai Namco without understanding the risks," he says. "But after I announced that I was leaving, I was very fortunate to receive offers from many different people, and quite a few of them came in very quickly."

One offer in particular stood out: SNK, the historic Japanese developer known for franchises like Fatal Fury and The King of Fighters, and of course the Neo Geo. The company's Saudi Arabian ownership is controversial, but Harada sees synergies such as the kingdom's hosting of the Esports World Cup, plus one big draw.

"The Crown Prince is clearly a passionate gaming fan, so being approached through that connection felt very different from simply joining a typical independent studio," he says, noting they never talked about making money or the business side of things. "We just talked about games, games, games, and more games, right up until the deal was finalised."

His enthusiasm reminded Harada of celebrated Namco founder Masaya Nakamura.

"[Nakamura] was always talking about games, and he would ask me, 'What do you want to do?' While I was talking with the Crown Prince, I found myself thinking about Mr Nakamura. The game business isn't about basic necessities. It's an industry driven to a great extent by passion. In that sense, the fact that the Crown Prince genuinely loves games was very important to me."

That's not to say SNK's half-century history in video games didn't play a part, given the company's role in revolutionising fighting games and arcade culture. Harada is a longtime fan. "I've always loved Neo Geo," he says.

The arrangement with SNK and its ownership appears permissive. Harada says he's been assured VS Studio will have complete autonomy and decision-making authority, and currently enjoys a great deal of freedom in how they operate.

"Being in their 50s can be an advantage, because experience really matters"

The studio is also attracting top talent. Back in August, it was announced Tekken 8 director Kohei Ikeda had joined VS Studio as a game designer, and he's among several other old hands who have been recruited by Harada.

"Fortunately, a lot of people reached out to me and said they wanted to join the studio," Harada says, adding that he was thrilled all of them were over the age of 45. "Take soccer, for example. If a team in their 20s played against a team in their 50s, the younger team would probably win. But in game development it's the opposite. Being in their 50s can be an advantage, because experience really matters."

While he wasn't actively trying to recruit highly experienced people, he says the team came together organically. "We were extremely fortunate in that respect. We started with a core group of 10 people, and those 10 reached out to other people they knew, and I didn't really have to do anything myself," he adds, attributing the magnetism to media exposure during his time at Bandai Namco.

Team spirit

Coming from decades of work under such a large publisher, are the dynamics different at a much smaller studio? Harada explains that at a large company it can be difficult to know exactly who made a particular decision, while a small studio thinks things through together as a team.

"When we discuss ideas, everybody gets involved, regardless of their role. Artists, engineers, directors, and game designers all sit down together and exchange ideas. For example, an engineer might come up with an idea for the narrative. That kind of collaboration feels very fresh," he says, adding that people proactively set up meetings, make proposals, and reach out to each other. "That may be because they're all veterans, but it's very different from what I experienced before."

"It feels like we've gone back to the '90s"

Still, he points out there's one aspect where big companies have the upper hand.

"Major publishers have an overwhelming advantage in their ability to market and sell games," he says, citing his experience handling global marketing at Bandai Namco, which he considers one of the strongest publishers in Europe. "In that respect, VS Studio still has a lot to build and strengthen, and there's a significant gap in terms of resources and capabilities. We now have to make all the decisions ourselves, but that's also part of what makes it exciting. It feels like we've gone back to the '90s."

The dynamic between the Japanese and Western sides of the industry has changed a lot since then. In recent years, companies in Japan appear to have largely weathered the storm that continues to decimate their competitors in the West. Harada has some thoughts about the discrepancy.

"Salaries in Japan tend to be lower than in the United States – particularly the West Coast – but employment is generally more stable," he says, pointing out that the American practice of laying off staff by email effective immediately is much less common at Japanese companies. "In Western game companies, that kind of environment tends to produce people who are mentally tough and highly experienced. I think that reflects a fundamental difference in organisational structure."

However, Harada says that when major game companies in the US run into difficulties, the impact can sometimes be felt in the Japanese game industry as well. "There are many external development studios and outsourcing partners overseas, so those studios can see their work dry up. It's not someone else's problem for Japanese game companies. I really hope employment in the Western game industry becomes more stable."

And then there's the widening money pit between the AAA and indie sides of the industry. Harada has in the past blamed microtransactions on rising development costs.

"AAA development has become so expensive that it's increasingly difficult to take risks, and even with AI, those costs haven't really come down," he says. "We're now in a world where developing a single AAA game can cost 50 billion yen, so AAA development inevitably tends to rely on established franchises with a proven track record to reduce business risk."

"The challenge now is that users have a hard time discovering good indie games"

He adds that the gap between indie games and AAA is shrinking, highlighting the huge difference in graphical quality between indie games and AAA games in the past.

"That gap has become much smaller. The challenge now is that users have a hard time discovering good indie games," he says, pointing to the overwhelming volume of weekly Steam releases. "There are many great indie games out there, but it's becoming harder for players to tell which ones are truly worth their time.

"What we're seeing now is that even indie studios with teams of 10 people or so can make genuinely great games and still fail commercially. That's becoming a real problem for the indie game sector today. The challenge isn't just making a great game, it's also about how to get people to discover it in the first place."

Sporting chance

Another sector facing its own challenges is one dear and near to Harada's heart: esports. He sees esports tournaments as the modern version of arcade culture, where players would compete in person, swapping and learning strategies. "Although arcades have largely disappeared around the world, what they created still lives on today in the form of tournament communities. Nowadays we call it esports, but at its core it's the same idea."

However, a year ago, he told The Game Business that the big money made in fighting tournaments isn't reflected in game revenue. The way he sees it, the value of esports isn't necessarily in generating immediate revenue on its own, but in extending the lifespan of a game and keeping people interested in it over the long term.

"Esports can help a game stay relevant for much longer through streaming commentary, tournaments, and community activities," he says, adding that over time, that continued engagement should contribute to game sales and ongoing support for the title. "My concern is ... people may see large prize pools and growing viewership numbers and conclude that esports itself is a highly profitable business for game publishers, but I think that can be a misleading way to look at it."

At the same time, he says he understands the argument that when a game benefits from an esports ecosystem, some of that success should be reinvested back into the players, organisations, and communities that help create that value.

"There aren't really publishers making this argument today, but if a publisher were to say they're going to run all tournaments themselves and keep all the revenue from live streaming, I do think that would be dangerous," he says, emphasising that esports exist because of the players, organisers, and local communities, content creators and fans who have supported it for years. "If everything becomes centralised under the publisher, there's a risk of losing the diversity and grassroots energy that made the community strong in the first place.

"My concern is that if we lose that aspect, fighting games could become a purely online experience, and I don't think that would be a good thing. In many ways, I believe the future of fighting games lies outside of the games themselves. In my view, the local communities are the foundation of everything, where new players make friends, learn the game, and become longtime fans. Supporting the foundation is one of the most important things developers and publishers can do for the future of fighting games."

The right AI

As you would expect, Harada has thoughts about what that future could and should look like. He views the possibilities of AI in terms of an evolution of the technology that has been used in games for decades, unrelated to generative AI.

"I don't want this to be misunderstood, but in some respects AI is actually a very good fit for fighting games, because it can make CPU opponents feel much more human, almost as if you're playing against a real person," he says, highlighting a case where someone was able to play against their deceased younger brother's data thanks to Tekken's 'ghost feature', and a subsequent viral post on social media saying it really felt like they were playing with their brother again. "That level of realism was only possible because of AI. To me, that's an example of AI being used in exactly the right way."

"I think AI will play a bigger role in matchmaking in the future"

He also sees AI's capability to analyse vast amounts of player data enabling much more sophisticated matchmaking, reasoning that fighting games are most enjoyable when you're matched against someone at roughly the same skill level.

"I think AI will play a bigger role in matchmaking in the future by analysing player behaviour, skill levels, habits, and other data in much greater detail. That can help create fairer and more enjoyable matches for each individual player."

So, is VS Studio making the fighting game of the future? Harada is not giving the game away.

"I can't reveal details about the project we're currently working on, but I can tell you one thing: We're not making a puzzle game (laughs)."