Katsuhiro Harada and SNK discuss their bold ambitions to ‘revive Japan’s golden era’

At a time when the games industry feels overwhelmed with bad news, former Tekken boss Katsuhiro Harada’s new SNK studio almost feels like a throwback.

Harada formed VS Studio with the Saudi-owned games publisher earlier this year, and was soon followed by some of his most senior former colleagues.

Perhaps unsurprisingly, SNK – the Japanese gaming arm of a state that just completed a $55 billion acquisition of Electronic Arts – has some pretty big expectations for what the veteran fighting game producer can achieve under its banner. And it seems those ambitions could extend to snapping up more big-name talent down the line.

During a visit to VS Studio’s freshly furnished office in Tokyo, Japan, SNK’s equally box-fresh chief publishing officer, Ozan Kocoglu, told VGC his ambition was to help Harada build something that could potentially “change the face of the industry”, while lending his experience from decades at Bandai Namco to improve SNK’s own games.

For Harada, the partnership represents an opportunity to work at a games publisher which, according to him, has a top-to-bottom understanding of what it takes to make great video games.

“From my understanding, at the major game development companies in Japan, management people don’t play their in-house development games at all, not even prototypes, not even the finalized games,” he claimed. “I’m not criticizing that it’s bad or that it’s good… I just wanted to also emphasize that this group, the SNK group, is an exception.”

Read on for my full interview with Harada and Kocoglu, in which they discuss VS Studio’s vision, plans for the future, and lessons learned from Fatal Fury.

In today’s industry climate, we’re more used to hearing about studios closing than opening. In a tough time for AAA games, why does VS Studio represent an opportunity?

Harada: When we look at the games industry overall, it’s not limited to just new studios, everyone has seen increased costs. More money is being spent on developing games, and on top of that, there’s also inflation worldwide. So this isn’t just about small studios: it’s affecting game studios as a whole.

So there are two perspectives on the game industry and game development as a whole. One thing is looking from a business standpoint, trying to establish games as a business, and the other thing is trying to redefine how to create new IPs and create new video games, and so that is the big difference between these two lenses.

Historically, game businesses have tried to build video games and other video game businesses on previous legacy and assets as well. Our studio, VS Studio, has a backbone in Saudi Arabia, and Saudi Arabia also invests money in us. However, it’s more about the vision rather than the financial aspects because the Saudi Arabian side, as you know, really likes games, and that is the big difference.

And for SNK and VS Studios, we want to create new visions, and it will be a different story if that is successful as a business. But for example, if we or someone else invested 1 billion yen in video games and were asked to triple it in three years, that statistically would not work, so that is not what we are going to do.

We have a clear vision, and of course, the Saudi Arabia side really likes games, and that carries over to every game developer at our studio. So that is our stance. That doesn’t mean we’re trying to criticize other video game companies because, as you know, major game developers like Sony also invest in other businesses, like insurance.

There aren’t many companies that wholly invest and commit to video games solely. We are only investing in video games, so that makes us a little bit of an outlier, but that is the big difference that we have. So it would be great if you could understand that perspective.

Kocoglu: Harada-san has spent several decades making video games and also leading teams across very high-budget and product life cycles. So I think he’s really the right person to get us to the next stage at SNK.

SNK is in a phase of growth, of aggressive growth, and we need a fresh perspective on not necessarily our games and our IPs, but how we can keep growing by bringing new things, staying innovative, and breaking from the legacy of what we’ve been doing. So simply adding a whole new world of experiences that we can publish and release as SNK for the delight of our players. It’s really about the great fit behind his expertise, his experience, and his qualities as a leader, as well as what he can bring to enrich SNK’s portfolio in the future.

“SNK is in a phase of growth, of aggressive growth, and we need a fresh perspective on not necessarily our games and our IPs, but how we can keep growing by bringing new things”

Harada-san, not many people know that, in your previous position, you were involved at a high level with multiple projects and publishing decisions. How valuable is that experience at SNK?

Harada: Given that the scale and vision of the companies are different, I don’t think I can be involved in the same way as before. Yet, I believe that considering I’m also a developer, there will be increased opportunities to create games.

Globally, I’ve been involved in many games and communities, interacting with people around the world. I think I see myself as the person who has interacted with the most communities by far, because I’ve spent about two-thirds of each year interacting with them abroad. In that sense, I believe I have expertise in what communities want with games and how to better approach them. So I would like to leverage that in my own titles here.

On the other hand, SNK has expertise in fighting games, and, as I said earlier, I can make use of my own expertise to help SNK’s fighting games as well by working together. That said, I want to emphasize that SNK and our studios are in different phases. Because I was supported by major companies like Bandai Namco Studio, this’s my first time developing and building from scratch. So, I would like to work alongside SNK as I study and develop the best approach. 

Harada-san, in your announcement of VS Studio, you talked about your decision to join SNK being driven by the need to create an “environment that allows developers to perform at their best”. What specifically are you looking to improve compared to other Japanese studios?

Harada: So first of all, it’s crucial to have a strong understanding of what the projects are, not just for the management, but for every employee to have a strong understanding of the products. I’m not criticizing other games or other development companies, but historically speaking, Japanese video game companies haven’t been [soley dedicated to] only video games. They’ve had other businesses like amusement parks [or something] as well.

And once those businesses have evolved, the focal point for those companies has shifted [away from video games]. Some boards of directors have less interest in video games. And I can tell you that most video game companies in Japan are like that. But it’s rare to see people with the authority to make decisions for the whole company. So the status quo right now isn’t good.

And as you know, we can’t create video games without programmers, and given the history of Japanese video game companies, there isn’t much of a management side with a strong understanding of the video game environment and each developer’s capabilities.

However, I see that SNK can do that because I talk to a lot of people, and they clearly love their games and understand them well. With that in mind, if we focus on that together, I think we can bring back the golden era of Japanese games and have a strong chance of succeeding.

From my understanding, at the major game development companies in Japan, management people don’t play their in-house development games at all, not even prototypes, not even the finalized games. They take part in meetings that involve the P&L or the break-even point, but they don’t even play the game builds or provide feedback on those builds. I can guarantee you that none of the Japanese video game industry people in upper management play their games at all.

I’m not criticizing that it’s bad or that it’s good… I just wanted to also emphasize that this group, the SNK group, is an exception.

For SNK, is the goal for VS Studio to strengthen the company’s existing franchises, create new IP, or both?

Kocoglu: I think it can be both. I don’t think we should be limited to one road or the other. I think Harada-san can bring a wealth of experience into supporting our existing IPs in growing in a different way, or going to the next stage alongside people like Oda-san. But at the same time, as SNK is growing to become much bigger and a new company, we also need fresh ideas.

“From my understanding, at the major game development companies in Japan, management people don’t play their in-house development games at all, not even prototypes, not even the finalized games.”

We also need to build new IP pillars that, you know, he could be working on, so that they can actually enrich the SNK portfolio beyond what we have. I definitely see Harada-san being able to do both, and it will depend on what he wants to do and how, and especially on which IP he could collaborate on with some of our development leads in the future.

Is VS Studio the start of an ongoing expansion for SNK, or a one-off? 

Kocoglu: I don’t think we’re going to stop there. I don’t see a reason to stop. You know, on this path, it’s more about who the best people are to join us. Harada-san was not necessarily an obvious choice, but definitely a great addition in terms of DNA with what we’ve been building so far. He was also already close to a lot of people in our organization.

But do we want to stop at only VS Studio? I don’t think that’s the idea. I think it’s going to be, okay, what are the new opportunities we can find in the market? How do we want to grow as a company? Personally, I think SNK has a strong DNA in action-related games. So anyone who makes an action-related project could potentially join us in the future on a case-by-case basis.

Does SNK see it as an opportunity, given that the AAA games space is having a moment of contraction, especially in the West? Is that an opportunity?

Kocoglu: I think it’s an opportunity for sure. But as we discussed in the beginning, it’s a costly opportunity. So we need to see how we can find a way to make great games again that could compete with all the others that are going into the market. So again, we need to go back to the basics: quality, innovation, and uniqueness.

And even if it’s an opportunity, the challenge is high. So how do we manage to make this in a decent amount of time and with the right level of quality that players expect? Because now the expectations have gone through the roof. So, you know, nobody has the recipe. I don’t think anybody has the recipe for success, but we need to look for it. You know, it’s like when you cook, sometimes you add a little bit of spice. You know, you search yourself into making the perfect dish, but you never do it from the get-go.

How independent is VS Studio when it comes to choosing projects? Will VS Studio operate more like an independent label?

Harada: We have a very high level of freedom. Don’t get me wrong, it means that we can create anything we want, however, let’s say we wanted to create a fantasy puzzle game, I don’t think any of my fans or any of the game players would want to see that happen. And what I want to protect is what I’m good at, as well as meet the expectations that my fans have.

And on top of that, I also want to collaborate with SNK. We can share the video game expertise that we have and enhance our strengths for both of us in terms of the ways to create video games. So, focusing on what I’m good at, keeping in mind player expectations as well, and having close collaboration with SNK.

Many of your former Tekken colleagues have joined VS Studio. So are we safe to assume that you intend to build a fighting game? Or do you intend for the studio to be genre-agnostic?

Harada: What I can say is that there are some members who I have worked with in the past who have joined the company, but this is purely voluntary.

Kocoglu: And it’s beyond Namco Bandai: it’s people he’s interacted with in the past. It’s not limited to his previous work environment.

Harada: And the title that we are creating has not been disclosed, but as I said earlier, I don’t want to betray our fans’ expectations. The game that we’re developing will be some kind of surprise, but rest assured, it is not something that is outside of expectations.

When the Tekken series inevitably continues, how will it feel, do you think, when you see the first game you’ve not been involved in for 30 years?

Harada: It’s 31 years, to clarify!

I have no knowledge of what Tekken has in store after my departure, so I think it would be great if you could all reach out to Bandai Namco. For now, I can only speculate, like how fans are speculating as well. But one thing I can say is that I have been working hard to mentor the team members of Tekken, and I can guarantee that the members who are still working on it have evolved and grown. So I’m looking forward to the future of Tekken as a fan.

“We can create anything we want, however, let’s say we wanted to create a fantasy puzzle game, I don’t think any of my fans or any of the game players would want to see that happen.”

Ozan, what lessons has SNK learned from recent releases that will influence future publishing decisions?

Kocoglu: We first learned something that everybody has learned on the market, which is that players’ expectations now are extremely high in terms of launch scope, in terms of what you need to deliver to them, in terms of experience. I mean, the quality bar has risen considerably, and that was potentially one of the things that happened with our latest Fatal Fury: maybe the launch scope was not at the exact level that fans were expecting, and it took some time to fix everything.  But I think now we probably have one of the best propositions on the market in terms of fighting games.

So there are expectations that we need to make sure we can answer, but there is also the question of how we maintain this communication with our players alongside our launch plans. It’s all stages: It’s before launch, it’s during launch, it’s post-launch, and it must be ongoing all the time. And we need to make sure we listen to feedback properly so we can tailor the game in a way that keeps its creative identity while also answering what players are looking for in a game.

So I think we know going forward we need to make sure, as a global publishing team, we communicate the strength and why it is fun to play, in the best possible way. We are expanding our capabilities as a publishing team considerably right now. This is why I joined, by the way!

And we need long-term strategies to support end-player engagement because most of the games we release now aren’t one-offs. They are not necessarily live, but they are long-tail products with DLCs, and now we release monthly characters with Fatal Fury. So it means that it’s a long work, a long-tail work that we need to deliver consistently and at the highest quantity possible. So we have a lot to do as publishers, but that’s why I joined the company six months ago. So hopefully we’ll get to the right level.

Five years from now, what would make you say VS Studio has succeeded, and what impact do you hope it has on SNK as a company?

Kocoglu: I am very, very convinced that VS Studio will have a big impact on SNK in terms of game development, for sure. So I can only see great products coming from this collaboration. And I think that’s why Harada-san is putting all his efforts on it. The question for us at SNK is how we can support his team properly to be able to make his dream game and something that could potentially change the face of the industry.

We would not have made this investment if we didn’t believe in it, and I think the whole company is really believing. But at the end of the day, it’s how you execute it. You can have the best plan, but if you don’t know how to execute that plan, it’s not going to result in anything.

Harada: I think what will determine success is if VS Studio is still ongoing after five years!

Jokes aside, it’s about striving toward the one goal that SNK, Saudi Arabia, and our studio are looking at. In terms of close collaboration with SNK, I just wanted to note that at VS Studio we have members who love SNK games as well. We are also fans of SNK, so there are some hopes and desires to improve SNK titles as well on our side. In the past, we developed Geese for Tekken 7 and really put a lot of effort into making him look cool, and fans really appreciated that.

So, hopefully, in the coming years, we would like to collaborate with SNK to make their characters more engaging and cooler as well. As Ozan-san said earlier, he joined SNK six months ago, and he’s also building the marketing environment and the marketing side from the ground up. So, I hopefully I would like to collaborate with some other teams as well as the publishing side, to make sure that we communicate to the fans and communities what we’re going to appeal to them, and if that is successful, then I think we can safely say that we have reached a successful point for VS Studio and SNK as a whole.