Are Konami’s Days as a Game Developer Almost Over?

Konami loses its greatest developer and delists from the New York Stock Exchange as part of restructuring. Should we panic?

Metal Gear Solid, Silent Hill, and Castlevania. Those are the three biggest reasons why fans are worried about Konami’s restructuring. Today saw the voluntary delisting of the company from the New York Stock Exchange.

While early reports induced panic in the gaming community, doomsday alarms ringing down our Twitter feed, Konami said a few words on their latest move:

While the Company believes the initial objectives of the U.S. ADS listing were mainly achieved, it has judged that the continued listing on the NYSE is not economically justified, taking into account the market changes as stated above and the fact that the trading volume of its ADSs on the NYSE accounts for only a small fraction of the total trading volume of its shares.

Game Informer reports that Konami’s stock is currently valued at $18.63 per share (as of 4/27/15), with a small number of shares traded over the last quarter. To Konami, it just doesn’t make sense to continue to trade on the NYSE. 

That’s fine and dandy. On a regular day, this wouldn’t send people into a frenzy. Except Konami has had an awful couple of weeks. Although the company should be busy promoting the release Metal Gear Solid V: The Phantom Pain on Sept. 1, it’s instead had to answer its fair share of questions about developer Hideo Kojima’s departure, the end of Kojima Productions, and today’s cancellation of Kojima and Guillermo del Toro’s Silent Hills

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We should point out that we have found NO direct connection between Kojima’s departure, the Silent Hills cancellation, and the NYSE delisting. The fact that they’ve all occurred in the past few weeks is almost certainly coincidence. Bad timing. But we see how fans might be worried that the company is quietly imploding, staving off questions with assurances in the process. 

Konami has assured its fans and the press that it will continue to make games. In the face of Twitter panic, the company has confirmed that it will continue to work on Metal Gear Solid and Silent Hill games in the aftermath of Kojima’s depature. But what if the Kojima crisis has acted like a veil (to Konami’s advantage) over the much more sinister restructuring? Growing concerns point to the restructuring as a way for Konami to exit game development and focus on its much stronger gambling business. 

As IGN pointed out, Konami’s pachinko (a type of Japanese gambling machine) division has seen almost 100% growth from the previous year:

Konami’s lack of future releases isn’t helping, either. The company hasn’t officially announced a follow-up to Metal Gear Solid V. What the publisher’s next game will be is anyone’s guess. It could start fresh with a Silent Hill sequel, which seems like the most viable option at the moment, especially with the hype the P.T. received last summer at Gamescom. Konami would be smart to take advantage of the response the canceled game received before it even premiered any actual footage. 

P.T. was a marketing marvel, an interactive trailer that promised us the blinding scares of the original games mixed with the innovative storytelling approach of Kojima Productions and Guillermo del Toro. After the fan response, Konami knows gamers want more Silent Hill, even if the last few games haven’t done particularly well in terms of sales or critically. 

Of course, Konami is undoubtedly pondering the question: would a Silent Hill sequel receive as much hype without the two masterminds who almost a year ago promised us the best game in the franchise? Would people care about a Kojima-less Metal Gear Solid, for that matter? That remains to be seen. 

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Konami has been able to cling to its life as a game development company with only a handful of franchises for the past few years, the number of new releases slimming year after year. In fact, the company will only release one new video game for PC and consoles this year, with no solid future line-up announced. 

Could Konami be preparing for E3? It will almost surely not announce a new Silent Hill game at the press conference. Not while all the commotion over Silent Hills is going on. But expect an announcement in 2016 at the latest if Konami decides it still wants to make games. We’ll certainly see something new from Metal Gear Solid V, but that game’s out in September. Castlevania will undoubtedly take a rest after last year’s taciturn Lords of Shadow 2, which failed its predecessor in almost every way imaginable. But again, you’ll hear about Castlevania again in some shape or form in the next year or two.

Our conclusion is that Konami probably won’t announce anything new this year. Unless it’s a new IP. But does Konami really sound like the company that will announce any new concepts this year? No, absolutely not. They have to make sure their already-successful franchises don’t implode first. 

Konami probably won’t have a presence at E3 at all besides promoting Metal Gear Solid V. Nobody can honestly doubt that game will make the company millions of dollars. It absolutely will. And for the small percentage of growth the games and digital entertainment division have seen in the past year, MGS will probably watch the fort just fine. 

But like all companies, Konami must have an eye towards the future. And the lack of new announcements seems to point in one direction. Think about this: other publishers, Bethesda and Square Enix especially, are going all-in at this year’s E3. For the first time ever, both companies will hold press conferences to show off their new line-ups. Bethesda will hit hard with what we’re almost sure is Fallout 4, while Square Enix shows off Final Fantasy XV and Deus Ex: Mankind Divided. They’re stepping into the arena with behemoths like Electronic Arts and Ubisoft, not to mention the console wars between Sony, Microsoft, and Nintendo. Can Konami really have a place in all of this? 

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Not if your slot machine business is booming, while your game development division continues to stagnate. We wouldn’t be surprised if Konami gave up altogether. 

John Saavedra is an assistant editor at Den of Geek US. Chat with him on Twitter! Or check out all his work at his website.