Capcom hired long-time Sony veteran David Reeves earlier this year, with the remit of expanding its European operations through new regional opportunities and emerging business models. The popular executive helped establish a rock solid foundation for the original PlayStation through to PlayStation 3 and the PSP, and it's this care and attention to the complex European markets that could potentially transform Capcom's success across the continent.
In this exclusive interview with GamesIndustry.biz, he discusses how Capcom fits into the wider industry as it slowly changes its business, why it's essential that Microsoft and Sony reach out to family audiences with motion controllers, adapting intellectual property for Move, Kinect and 3D, and why it's all only a stop-gap until the next generation of consoles comes along.
Q: What are your impressions of the motion controllers now that we know more about them, and the way Sony and Microsoft are trying to reposition themselves for a casual audience?
David Reeves: If you map it out the Xbox 360 is right up in the corner and it has certain types of games associated with it. And Microsoft knows that in ten years time they can't be there, they have to be appealing to families. And I reckon that strategically it's absolutely the right move. It's almost like two steps back and one step forward. They are right to separate Kinect from everything else.
Q: What did you think to Microsoft's Cirque Du Soliel event at E3? That certainly gave the impression Kinect is almost a separate games business for them...
David Reeves: Only when Star Wars came up and the dancing game (Harmonix' Dance Central) were there cheers. It fell a little bit short to be honest. If you look at the industry over the past five years and ask yourself where has the money been made, it's been made on Wii Fit, Brain Training, SingStar, even Guitar Hero. And then on the other side you've got the Activision and EA hardcore titles. They're in a box. Publishers don't want to give up their core values but they need to reach out to this wider market.
Q: The Xbox 360 seems to be the least family-friendly of the three consoles, Sony is still able to trade on its heritage of the PlayStation 2...
David Reeves: But they've got to do it to make that move before they bring out the new systems. I think long-term it's the right move but they realise they're going to upset a lot of users.
Q: Do you think that family market is still there? Those people that bought the Wii for the family to play, those stories about grandma playing Brain Training – are they going to buy an Xbox 360 for Kinect?
David Reeves: Call it social gaming or family gaming but it's always going to be there. With Guitar Hero there's always new music, with SingStar there's always new songs. With Wii Fit you can always add new games and reflect trends and fads in fitness.
Where it has to get creative is with games like Grand Theft Auto and Halo, you've got to reinvent yourself for a new generation, and that's difficult, especially as these games cost $50-$70 million. In terms of downloadable content as long as the content holders – the labels, the artists – aren't too greedy, that's really where the money is. Because otherwise you're spending $60 million to create a new game. To produce Rock Band the guys at Harmonix are brilliant. They're not doing a lot of graphical work, it's not very expensive for them. SingStar was exactly the same, it becomes a licensing business in a way.
Capcom is in the same position as the hardcore crowd. Whether it's Resident Evil or Street Fighter or whatever comes next, it's still going to cost a lot of money to put those games together. Red Dead Redemption cost an enormous amount to put together but it was probably worth it.
Q: So what's Capcom's official stance on the motion controllers and how can they help change the Capcom business?
David Reeves: Capcom is embracing it, we're working with Microsoft and with Sony on both sides and trying to match up the IPs we have with what the first-parties want. It's not a forced fit. In some ways it's quite a natural way of progressing. Capcom is definitely going to embrace it and just as the first-parties are doing, we see it as another blip before we come into the next cycle. 3D gaming is the same. Anything they can add to revive and pique interest in the games until we have another clash of the titans in two years time.
Q: Do you think it's going to be that soon that we'll see two new home consoles on the market?
David Reeves: Two to three years, I reckon so. I don't have any inside information. All the first-parties have got to be working on something. The tricky thing is when do you put a stake in the ground on technology? That's the problem. You can be waiting a few extra months to implement something, but you've got to set a date to go with a certain chip at a certain point otherwise you're going to miss the key milestones.
Q: Is there a danger of forcing Capcom IP to incorporate motion control? Pushing IP to include motion control that it doesn't really need, doing the technology a disservice and also harming the franchise?
David Reeves: Initially, yes, because you've got two new controllers and then you've got a line up of IPs and it's almost like trying to line up boys and girls. You can do that to some extend but in the end it's the ones that are built from the bottom up – purpose built for Kinect and Move – that are going to be successful. Sony did it with the EyeToy camera, all those games were built from the bottom up. We had some terrible games on that but eventually it worked out. First-parties will come out with good stuff.
I honestly think in two or three years' time we're going to see much more of a breakthrough in terms of the way we control games. Much more than Kinect or Move are offering. A lot of people are working on that type of thing in Scandinavia, Japan and the US. How to control games in a much more accurate way. I know from working on Move, which started four or five years ago, when we had a big box in a room to get the whole thing working. It's come down to something much smaller now.
It's like chips in a computer, it's going to get faster and faster and smaller and smaller. After all, what has brought people into gaming over the past few years has been the leaning back, not the leaning forward. Leaning forward is someone playing with a controller in a bedroom playing intensely, and the image the games industry had was of a geeky individual who was very much a loner.
Leaning back, whether SingStar, Lips or Brain Training, was much more about at a party you don't even recognise people are playing a particular format, they're just playing a game. Or it's not even considered a game. Most consumers looked at this and realised videogaming isn't so bad, it's not so exclusive, there's some fun ideas here. There's room for both. Capcom at the moment is still leaning forward because that's their core competency.
Q: But that's your remit isn't it, to look for new opportunities in Europe – what are you looking at there, in terms of new trends and business models for Capcom?
David Reeves: Capcom has been one of the slower publishers to embrace the digital era, and what we've had in terms of Resident Evil DLC has come one month later rather than three months later. Whereas Activision, EA, Microsoft and Sony would have it out in three months after the boxed release. They understand that the consumer engages even after he's played the game. And that can continue until the next game comes out.
Q: How have you found that – do you release quickly, while the product is still hot on the shelves and take advantage of the buzz, or do you wait until sales have calmed down and you reinvigorate the game with digital content released later?
David Reeves: Capcom is a company that is relatively conservative but they are like an armadillo. It's so strong financially in terms of their IP and their controls and the quality they produce. Even if it's a force seven storm or a volcano, Capcom will come through it and out the other side. They do change gradually, they have embraced DLC quite slowly, but in a very professional way. They keep the fans on board.
EA is like seven year-old boys playing soccer, they all run after the ball. When Wii or DS was the thing to have they all ran over to it and by the time they got there the ball had moved. Whereas Capcom is going through gradually and it gets there eventually. It's not changing strategies all the time and it keeps its feet on the ground. We do have to move into that area because after all digital downloading does increase your profitability by a significant amount. You don't have to press discs, you don't have to ship them.
From a profitability point of view that's great. From a European point of view a lot of Japanese IPs from Capcom have worked very well but others do not. So going forward the opportunity to do smaller games which we can develop into big games is there. Not just in Europe, but also in the US. Capcom is looking around to see what's there. That's the typical Capcom style. I like to think it's thought out. It's not being late to the party.
Q: There are reasons to be cautious. I remember writing stories about publishers setting up specific Wii/DS labels, and separating significant chunks of a business into Nintendo development, and those back-fired in some respects...
David Reeves: Indeed. And Capcom didn't quite go there. It tried to fit some of the IPs into the Wii, as it did with Monster Hunter. The other thing is what we're trying to do is make Capcom a little bit more European in terms of localisation. Capcom, Square Enix, Konami, and to a lesser extent Sega, really doesn't localise into into 14 languages that EA, Warner and Disney would do. It's quite difficult to convince R&D people because it doesn't pay back immediately to take the game into Russian, Polish or Arabic. But that's where the market is expanding into.
Q: Those were big areas for Sony when you were there, right? Pushing into India, Russia, and all these big regions that were not given any proper care or attention...
David Reeves: We were in the Middle East and it's amazing how many games are in Arabic. There are so many children between the ages of five and eight that don't immediately understand English and they're buying Arabic games for those platforms and it's huge business. You go on to the High Street in the UK and it's a little bit depressing but the stores in Dubai and Saudi Arabia are absolutely brimming with games. It's not just PS2, but PlayStation 3 and Xbox 360. It's amazing. That's where all the money is made.
Q: Are there more things you learnt at Sony that you want to bring over to the Capcom business?
David Reeves: I see it the other way around. I'm learning more from Capcom than I did at Sony. The Capcom experience revolves around real quality experiences and I've learnt a lot in my first six months at Capcom. The way they approach the business from a commercial point of view and from a financial point of view relying more on PR build up with assets than actually going out and buying in media. I'm still absorbing a lot, not just in London but in San Mateo and Osaka.
Q: What's your take on 3D, for home consoles and for portables?
David Reeves: I think Sony is trying to pull a plan together that involves the televisions and the whole entertainment division - 3D has to be the way they go. They've got to push it, but gaming, from a 3D point of view works better than films. Most games are almost already 3D. You don't have to worry about different camera angles or shooting scenes in different ways. It only takes five or six lines of code to change it from a normal game to a 3D game. I remember working on MotorStorm and the guys did a 3D level in about three weeks. What I think we'll see is that certain parts of a game will work very well in 3D and you won't need to make a whole game in 3D.
The other aspect is it's quite a strange feeling to play games in 3D. I've played quite a lot, 15-20 games and not necessarily Capcom titles, and when you play them intensely like WipEout you get a sick feeling, so you have to be careful about it. When you look at racing games in 3D and a lot of action adventure games it is a step change. If it works well in 3D then publishers will do it in 3D because it's not a massive expense to do that.
Q: It's not a massive expense for developers and publishers, but it is for the consumer...
David Reeves: Five years ago not everyone had flat-screen TVs but now, depending on the country, it's standard. TV is one the first things that people will buy, they might buy a new TV before they buy a new car.
Q: But isn't it a big ask, that consumers upgrade TV sets to something 3D capable? Especially after only recently upgrading to high-definition Sony, Panasonic, Samsung sets...
David Reeves: It is for some people. If there hadn't been a recession it would have grown a lot quicker. But when you see it, it's actually quite mind-blowing. It will depend on finding two or three really good applications to sell it. I've seen some as a publisher, and no doubt other publishers have seen it, from first-parties. On the same token, when I did some consultancy work for a film company it was an enormous amount of work to retrofit 3D to movies. It just didn't work and it was really uncomfortable.
David Reeves is chief operating officer of Europe for Capcom. Interview by Matt Martin.