Namco
Namco Limited was a Japanese multinational video game and entertainment company, headquartered in Ōta, Tokyo. It had several international subsidiaries, including Namco America in Santa Clara, California, Namco Europe in London, Namco Taiwan in Kaohsiung, and Shanghai Namco in mainland China.
It was founded by Masaya Nakamura on June 1, 1955, as Nakamura Seisakusho, initially as an operator of coin-operated arcade machines. After reorganizing as Nakamura Seisakusho Co., Ltd. in 1959, its association with Walt Disney Productions provided the company with the necessary resources to expand its field of operations. In the 1960s, it produced electromechanical arcade games, such as the 1965 hit Periscope. It entered the video game industry after acquiring the struggling Japanese division of Atari Inc. in 1974, and distributed games such as Breakout in Japan. The company was renamed Namco in 1977 and developed its first original video game, Gee Bee, a year later. One of his first big hits was the fixed shooter Galaxian in 1979; It was followed by Pac-Man in 1980, the best-selling arcade game of all time. The company thrived during the golden age of arcade gaming in the early 1980s, releasing popular titles such as Galaga, Xevious and Pole Position.
In 1984 it entered the home console market by adapting its arcade games for MSX microcomputers and Nintendo's NES console. Its American division acquired Atari Games in 1985, later selling a part in 1987 after a series of disagreements between the two companies. Due to disagreements over licensing agreements with Nintendo, Namco began developing video games for competing platforms such as Sega's Mega Drive, NEC's TurboGrafx-16, and Sony's PlayStation.
During the 1990s he continued to develop very popular games, such as Ridge Racer, Tekken or Taiko no Tatsujin. However, in the late 1990s and early 2000s, the company experienced numerous financial difficulties due to the economic crisis in Japan and the arcade market. In 2005, it merged with Bandai to form Bandai Namco Holdings, a Japanese management company for the entertainment industry. He continued developing video games until joining Namco Bandai Games in 2006.
Namco developed several multi-million selling game franchises, such as Pac-Man, Galaxian, Tekken, Tales, Ridge Racer or Ace Combat. He blew up arcades and amusement parks all over the world; he also produced movies, toys, and arcade machines and ran a chain of restaurants. Today, Namco is recognized for its unique corporate model, its importance to the industry, and its technological advances. Its successor, Bandai Namco Entertainment and its subsidiaries continue to use the Namco brand name on its arcade machines and other entertainment products.
History
Origins and acquisition of Atari Japan (1955-1977)
On June 1, 1955, Masaya Nakamura founded the Nakamura Seisakusho Co., Ltd. in Ikegami, Tokyo. The son of the owner of a shotgun repair business in a Tokyo department store, Nakamura, a 1948 graduate of the Yokohama National University in shipbuilding, he was unable to find work in his profession due to his experience and in an economy in crisis after World War II, so he decided to found his own company when he saw that his father's business was successful with production of airsoft guns. He started with just $3,000, and used the money to purchase two electric-powered rocking-horse rides. hand that, due to competition, he installed on the roof garden of the Matsuya department store in Yokohama. The horses were very popular with children and Nakamura made good profits, so he expanded his business to other smaller stores.
In 1959, the company was reorganized and renamed Nakamura Seisakusho Company, Ltd. Nihonbashi (Tokyo). Consisting of equestrian attractions, a photo viewing machine, and a goldfish catching pond, but the central attraction was a moving train called the Roadaway Race; It was a success and led Mitsukoshi to commission similar parks on the roofs of all its stores.
Together with Taito, Rosen Enterprises and Nihon Goraku Bussan, Nakamura Seisakusho became one of Japan's leading arcade machine companies. As the company grew, it used its position to wholesale buy arcade machines from other manufacturers at a discount and sell them at full price to smaller outlets. Although its machines sold well, Nakamura Seisakusho lacked manufacturing lines and supply networks. distribution like its competitors, which made its production slower and more expensive.
The company could not install its machines inside the stores because other manufacturers already had exclusive rights to these spaces. Faced with this situation, Nakamura Seisakusho opened a production plant in February 1966 and moved its corporate offices to a four-story building in Ōta, Tokyo. The company reached an agreement with Walt Disney Productions to manufacture children's attractions based on in their characters, in addition to others that used popular anime figures such as Q-Taro; this move allowed the company to further expand its operations and become a driver in the Japanese slot machine market.
Although the production facility was primarily dedicated to its Disney and anime attractions, Nakamura also used it to manufacture more complex and elaborate electromechanical rides. The first of its kind was Torpedo Launcher (1965), an arcade submarine warfare simulator shooter that was later called Periscope. their products also included Ultraman-themed gun games and pinball games with the image of Osomatsu-kun characters.
The acronym Namco was introduced in 1971 as a brand name for some of its machines. The company eventually had ten employees, including Nakamura himself. Its arcade games, which had become commonplace in bowling alleys and retail stores, continued to be successful. The company also created a robotics division to produce robots for entertainment centers and festivals, such as leaflet-distributing robots, bow-tie machines, and a robot called Putan that solved pre-designed mazes.
In August 1973, the American game company Atari began establishing a series of divisions in Asia, one of which was named Atari Japan; its president, Kenichi Takumi, contacted Nakamura early in 1974 for his company to become the distributor of Atari games throughout Japan. Nakamura, already planning international expansion after the success of his company, accepted the offer. Due in part to employee theft, Atari Japan was a financial disaster and came close to bankruptcy in its first few years of business.
When Takumi went out of business, the company was taken over by Hideyuki Nakajima, a former employee of the Japan Art Paper Company. Atari co-founder Nolan Bushnell, whose company was already struggling in the United States, opted to sell the Japanese division; His intermediary, Ron Gordon, was commissioned to find a buyer for Atari Japan. After being rejected by Sega and Taito, Gordon's offer was accepted by Nakamura for 296 million yen (about $1.18 million), although Nakamura informed Bushnell that his company could not pay the money at the time. deadline. With no others interested in the purchase, Bushnell eventually allowed Nakamura to initially pay $550,000 and then 250 000 a year for three years. The acquisition allowed Nakamura Seisakusho to distribute Atari games throughout Japan, making it one of the largest arcade game companies in the country.
The purchase of Atari Japan was not an immediate success, in part due to the vogue for coin-push machines of the 1970s. Although Nakamura Seisakusho did have some success with imports such as Kee's Tank Games, the Japanese video game industry's decline in popularity did not make them as profitable as expected. The market became more viable when the Japanese government imposed restrictions on coin-push games in 1976 and the company began to make higher profits; its distribution of Atari's Breakout was so successful that it sparked a wave of piracy in the industry. By the end of the year, Nakamura Seisakusho was one of Japan's leading video game companies.
Galaxian, Pac-Man, arcade hit (1977-1984)
Nakamura Seisakusho changed its name to Namco in June 1977. It opened a division in Hong Kong under the name Namco Enterprises Asia, which managed arcades and entertainment centers. As Namco's presence in Japan did not stopped growing, Nakajima suggested that Nakamura open a division in the United States to boost brand recognition around the world. Nakamura accepted the proposal and on September 1, 1978 he founded Namco America in Sunnyvale, California. With Nakajima as president and Satashi Bhutani as vice president, Namco America's goal was to import and license games to companies such as Atari and Bally Manufacturing. Namco America released some non-game arcade games, such as Shoot Away (1977).
In the 1970s, when the video game industry boomed in Japan with the release of Space Invaders by Taito, Namco decided to focus on creating its own video games. Although Atari's licensed games were still profitable, sales were declining, and the quality of the hardware used was declining. On the recommendation of company engineer Shigekazu Ishimura, the company reconverted its Ōta manufacturing facility into a small division of games and bought old NEC computers for his employees to study.
Namco released Gee Bee, its first original game, in October 1978; designed by newly hired Tōru Iwatani, it is a pinball video game that incorporates elements of Breakout and similar "breaker-block" clones. Although Gee Bee did not meet the company's sales expectations and could not compete with games like Space Invaders, allowed the company to establish itself in the video game market.
In 1979 Namco published its first major hit, Galaxian, one of the first video games to incorporate RGB color graphics, score bonuses, and a tile map hardware model. Galaxian is considered historically relevant for these innovations and for its mechanics, based on that of Space Invaders, but with the introduction of enemies with individual "personalities".In North America it was released by Midway Manufacturing, the division of Bally's video games, where it became one of their best-selling titles and fostered the relationship between Midway and Namco.
The "martian killer" genre became ubiquitous by the end of the decade, with games like Galaxian and Space Invaders becoming regulars in Japanese entertainment venues. As video games often featured killing enemies and shooting at targets, the industry had a predominantly male player base. Tōru Iwatani began work on a maze game aimed primarily at women, with simple gameplay and recognizable characters. Along with a small team, he created a game called Puck Man, in which players controlled a character who had to eat dots in a closed maze while avoiding four chasing ghosts. Iwatani based his gameplay on the action of eating and designed his characters with soft colors and very simple facial features. Puck Man was released on a trial basis in Japan on May 22, 1980 and was widely released. scaled in July. It was only modestly successful, as players were more accustomed to the shooter gameplay of Galaxian than to the characters and visual style of Puck Man. It was released in North America as Pac-Man in November 1980. The game's simplicity and abstract characters made it a fixture of popular culture, spawning a multi-million dollar franchise.
Namco regularly released several successful games throughout the early 1980s. In 1981 they released Galaga, the sequel to Galaxian, which was It was critically acclaimed and surpassed the popularity of its predecessor with its fast-paced action and power-ups. In 1982, Pole Position was released, a racing game that was the first to use a real circuit (Fuji Speedway) and helped lay the foundations of the racing video game genre. That same year he released Dig Dug, a maze game that allowed players to create their own mazes.
The company's biggest success after Pac-Man was the vertically scrolling shooter Xevious in 1983, designed by newly hired Masanobu Endō. This game pioneered the use of pre-rendered visual effects, boss fights, and a cohesive world made it an astonishing success in Japan, posting record sales figures not seen since Space Invaders. The success of the game translated into merchandising, holding tournaments, and the publication of the first soundtrack album for a video game. That same year, Namco released Mappy, an early side-scrolling platform video game, and the sequel to Pole Position, Pole Position II.
A year later, Endō designed The Tower of Druaga, a highly successful maze game in Japan that helped establish the concept of action role-playing video games and whose design influenced games such as The Legend of Zelda by Nintendo. In 1984, Pac-Land, a platform game in the style of Pac-Man > which served as an example for similar games such as Super Mario Bros., and Gaplus, a moderately successful update of Galaga. The success of Namco's arcade games led the company to launch its own print publication, Namco Community Magazine NG, to allow its fans to engage with the developers.
Success with home consoles (1984-1989)
In July 1983 Nintendo released the Family Computer, a game console that used interchangeable cartridges to run games. The console's release was accompanied by adaptations of some of Nintendo's most popular arcade games, such as Donkey Kong, which at the time were considered to be of high quality. Although Namco recognized the potential of the console to allow consumers to play faithful versions of its arcade games, the company decided to postpone the idea after the failure of its ports for platforms such as the Sord M5. Nakamura he suggested to his son-in-law, Shigeichi Ishimura, that he work with a reverse engineering team to study the Famicom's hardware.
His team developed a port of Galaxian with their new knowledge of the console's capabilities, which surpassed the quality of the company's previous releases; the port was presented to Nintendo President Hiroshi Yamauchi, along with an indication that Namco intended to release it with or without Nintendo's approval. Namco's demonstration prompted Nintendo's decision to create a third-party licensing program for the console. Namco signed a five-year royalty contract that included several preferential clauses, such as the ability to produce its own cartridges.
In 1984 the company created a subsidiary called Namcot to serve as Namco's console games division; it released its first four titles in September: Galaxian, Pac-Man, Xevious and Mappy. Xevious sold more than 1.5 million copies and became the first " killer app" for the Famicom. Namcot also published games for the MSX, a popular Japanese computer. Namco's ports of arcade games were considered to be of high quality and contributed to increasing console sales.
Namcot enjoyed financial success and became an important pillar of the company; when Namco moved its headquarters to Ōta, Tokyo in 1985, it used the profits generated from the adaptation of Xevious to Famicom to finance its construction (hence the building was nicknamed "Xevious"). The Talking Aid, a device for people with speech disorders or impairments, was part of the company's attempts to break into other markets..
By the time the video game crisis of 1983 concluded in 1985 with the release of the Nintendo Entertainment System (NES), Atari had gone under. After suffering numerous financial difficulties and losing its leadership in the industry, parent company Warner Communications sold its personal computer and home console divisions to Jack Tramiel, founder of Commodore International, who changed his company name to Tramel Technology. Atari Corporation. Warner was left with Atari's computer software and arcade game divisions, which it renamed Atari Games. Namco America bought 60% from Atari Games on February 4, 1985 through its subsidiary AT Games, and Warner kept 40% remaining; this acquisition gave Namco exclusive distribution rights to Atari games in Japan.
Nakamura began to lose interest in Atari Games soon after the acquisition; he viewed Atari as a competitor to Namco and was hesitant to invest more funds and resources in the company. Nakamura also did not like having to share ownership with Warner Communications. Nakajima was frustrated by Nakamura's attempts to market Atari's video games in Japan and had constant disagreements with him about the direction the company should take. Considering his acquisition of the majority stake as a failure, in 1987 Namco America sold 33% of its stock to a group of Atari Games employees led by Nakajima. This led to Nakajima resigning from Namco America and becoming president of Atari Games. He created Tengen, a video game distributor and developer that challenged Nintendo's licensing restrictions for the NES by selling various unlicensed games, including ports of Namco arcade games. Games into a separate entity, Namco continued to have a minority stake in the company, and Nakamura retained his position as chairman of its board of directors until mid-1988.
In Japan, Namco continued to experience rapid growth. He published Pro Baseball: Family Stadium for the Famicom, which was critically acclaimed and sold more than 2.3 million copies; its sequel, Pro Baseball: Family Stadium '87, sold another two million. In 1986 the company entered the restaurant business with the acquisition of the chain of cafes and restaurants Italian Tomato. He also launched Sweet Land, a popular claw machine that could win candy and other prizes.
One of the company's biggest hits in this period was the racing game Final Lap (1987). It is considered the first arcade game that allowed multiple machines to be connected—or "linked"—to allow more players to participate. It was one of the most profitable coin-operated games of the time in Japan and remained at the top of the sales charts for the rest of the decade.
Namco's continued successes in arcades provided its arcade division with the revenue and resources needed to fund its research and development (R&D) departments. One of the department's earliest creations was the shooter of Metal Hawk helicopters in 1988, installed in an arcade cabin with a motion simulator, a mechanism that created the sensation of being in a real motion environment, although its high cost of ownership development prevented their mass production. Although most of their initiatives were not commercially successful, Namco showed interest in motion-based arcade games and began designing them on a larger scale. In 1988 Namco entered the film production by distributing the movie Mirai Ninja in theaters, with the launch of the eponymous video game coinciding with its premiere.
Namco also developed the beat 'em up Splatterhouse, which drew attention for its gore and dismemberment aesthetics, and Gator Panic, a derivative of Whack-a-Mole that became a staple in Japanese arcades and entertainment centers. In early 1989, the company introduced its System 21 system, one of the first arcade boards to use true 3D polygon graphics; known as "Polygonizer", the company demonstrated its power with the Formula 1 racing game Winning Run; featuring an arcade cockpit that shook and swayed the player while driving, the game was considered "a groundbreaking product in terms of programming technique" and received extensive press coverage. Winning Run was a commercial success, which convinced Namco to continue researching 3D video game hardware. Namco continued to open arcades under its brand name in Japan and abroad, such as the family chain Play City Carrot.
Expansion to other markets (1989-1994)
The company continued to grow in the video game market thanks to the great success of the Famicom in the late 1980s. By 1989, sales of games for the Famicom and NES represented the 40% of its annual revenue. In the same period, the company's license agreement with Nintendo expired; when Namco tried to renew its license, Nintendo opted to revoke many of the preemptive clauses it originally had; Hiroshi Yamauchi insisted that all companies, including Namco, had to follow the same guidelines. The revocation of these clauses angered Nakamura, who announced that the company would abandon Nintendo hardware and focus on producing games for competing consoles such as the PC Engine. Executives resisted the idea, fearing it would severely affect the company financially, and despite Nakamura's protests, Namco signed Nintendo's new licensing agreement. Although it continued to produce games for Nintendo consoles, most of Namco's quality releases were for the PC Engine and Mega Drive.
In 1989 it was announced that Namco was developing its own game console to compete with companies such as Nintendo and NEC. Electronic Gaming Monthly reported that the console, which was nearing completion, had hardware comparable to the then soon to be launched Super Nintendo. According to company engineer Yutaka Isokawa, it was designed to compete with the Mega Drive, a 16-bit console from Sega, Namco's rival in the arcade sector. With the consoles already cornered by other competing systems, some trade magazines were unsure of its market performance. Although the console never made it to market, it allowed Namco to become familiar with designing home video game hardware.
Tadashi Manabe succeeded Nakamura as Namco's president on May 2, 1990. Manabe, who had been the company's representative managing director since 1981, was tasked with strengthening the company's relationships and teamwork ethic. management. Two months later, the company dissolved its remaining ties with Atari Games when Time Warner reacquired Namco America's 40% stake in Atari Games. In exchange, Namco America received Atari's arcade management division, Atari Operations, allowing the company to operate arcade video games throughout the United States, with which Namco began distributing games in North America directly from its office. American, rather than through Atari.
Namco Hometek was created as the home console games division of Namco America; the latter's relationships with Atari Games and Tengen meant that the company could not become a third-party Nintendo licensee, so it instead turned to companies like Bandai to release its games in North America. In Japan, Namco developed two theme park attractions, featured at the 1990 International Garden and Greenery Exposition (Expo '90): Galaxian3: Project Dragoon, an on-rails shooter on 3D for 28 players, and a dark ride based on The Tower of Druaga. As part of the video game company's idea of "hyper-entertainment", engineers The company's staff had sketched ideas for a possible theme park drawing on Namco's experience in designing and operating indoor playgrounds and entertainment complexes. Both attractions were commercially successful and became some of the most popular in the city. Expo '90. In the arcade section, Namco released Starblade, a 3D on-rails shooter that stood out for its cinematic presentation. Namco dominated the Japanese arcade charts in October 1991, occupying the top six positions for that month, with Starblade in the lead.
In February 1992, Namco opened its own theme park, "Wonder Eggs", in an area of Futakotamagawa Time Spark, in Setagaya, Tokyo. Described as an "urban entertainment center", Wonder Eggs was the first amusement park run by a video game company. In addition to Galaxian3 and The Tower of Druaga, the park featured fairground rides, carousels, motion simulators and i>Fighter Camp, the first flight simulator available to the public. The park regularly recorded high attendance figures: 500,000 visitors they attended in its first few months of operation and more than a million by the end of the year. Namco created the park out of interest in designing a Disneyland-inspired theme park that offered the same type of stories and with characters from its rides. Wonder Eggs helped the company's revenue increase by 34% in December 1992. The company also designed smaller indoor theme parks for its large amusement parks. entertainment around the country, such as the Plabo Sennichimae Tempo in Osaka.
Manabe resigned as president on May 1, 1992 due to a severe anxiety disorder, and Nakamura resumed the role; Manabe served as company vice president until his death in 1994. At that time, the division The company's arcade began work on a new 3D arcade board dubbed System 22, capable of displaying 3D polygonal models with fully textured graphics. Namco enlisted the help of Evans & Sutherland, a company that designed combat flight simulators for the Pentagon, to help develop the board.
In 1993, the System 22 powered the racing game Ridge Racer; its use of 3D textured polygons and drifting driving made this game a title popular in arcades and in one of Namco's most successful releases, as well as being considered a milestone in three-dimensional computer graphics. A year later, the company released its successful Tekken, a game 3D fighting game; designed by Seiichi Ishii, co-creator of the famous Sega fighting game Virtua Fighter, Tekken surpassed the Sega game in popularity thanks to its wide variety of playable characters and at its stable frame rate, leading to a multi-million selling franchise.
Namco continued to expand its overseas operations, including its acquisition of the Aladdin's Castle chain from Bally Manufacturing. In December, the company acquired Nikkatsu, the country's oldest operating Japanese film studio, which in it was in bankruptcy proceedings at the time. The purchase allowed Nikkatsu to use Namco's computer graphics hardware for its films, while Namco gained a foothold in the Japanese film industry.
Relationship with Sony (1994-1998)
In early 1994, Sony announced that it was developing its own 32-bit video game console, the PlayStation. Originally, the console was to be the result of a collaboration between Nintendo and Sony to create a CD-ROM peripheral for the Super Nintendo Entertainment System in 1988. Fearing that Sony would take over the entire project, Nintendo gave up on continuing. with the development of this component, so Sony chose to focus its efforts on designing the PlayStation itself as its own console.
Lacking the necessary resources to produce its own games, Sony requested the support of third-party companies to develop software for the PlayStation. Namco, unhappy with Nintendo's and Sega's licensing terms for their consoles, agreed to support PlayStation and became its first third-party developer. The company began work on a PlayStation port of Ridge Racer, their most popular arcade game at the time. The PlayStation was released in Japan on December 3, 1994, with Ridge Racer as one of its launch titles. Sony sold 100,000 units on release day; some publications credited Ridge Racer with the initial success of the PlayStation, a best-seller that placed this console ahead of its competitor, the Sega Saturn. For a time, it was the most popular PlayStation game. sold in Japan.
Namcot was integrated into Namco in 1995. Their last game was the PlayStation port of Tekken, released in Japan in March and worldwide in November; The game was designed for Namco's System 11 arcade board, which was based on PlayStation hardware, allowing the console version to be a near-perfect reproduction of its arcade counterpart.. Tekken became the first PlayStation game to sell one million copies and played a pivotal role in the success of the console.
Sony recognized Namco's commitment to the console, for which it received special treatment from Sony and early promotional ads featured the slogan "PlayStation: Powered by Namco". Namco also obtained the rights to manufacture controllers, such as the NeGcon, a controller that he designed with insights gained from the development of his canceled console. Although he had signed contracts to develop games for systems such as the Sega Saturn and 3DO Interactive Multiplayer, the company concentrated its design efforts on consumer software on PlayStation for the rest of the decade.
To attract new players to its arcades, Namco's arcade games division began developing titles with novel gameplay and control systems. In 1995 it released Alpine Racer, an alpine skiing game with a control system that included skis and poles, was awarded the "Best New Equipment" award at that year's Amusement and Music Operators Association (AMOA) exhibition. Time Crisis, a shooter with light guns that stood out for its mechanics of reloading the weapon and dodging enemy shots by pressing a pedal, helped lay the foundations of the genre as such, while Prop Cycle was notable for its use of a bicycle-like controller in which the player had to use the handlebars to control direction and pedal to control acceleration. The Star Audition photo booth-like machine >, which offered players the chance to become a showbiz star, became a media sensation in Japan.
Namco Operations, which was renamed Namco Cybertainment in 1996, acquired the Edison Brothers Stores chain of arcades in April. Namco also introduced the Postpaid System, a centralized card payment system, as a means of combating computer piracy. IC cards in Japanese arcades.
In September 1997, the company announced that it would begin developing games for the Nintendo 64, a console that was then seeking support from outside developers. Namco signed a contract with Nintendo that gave it the right to develop two games. for the console: Famista 64, a version of his Family Stadium series, and an untitled RPG for the Nintendo 64DD peripheral. The RPG was never released and the 64DD ended up being a commercial failure.
In October 1998, in what one publication described as "the most amazing alliance this industry has seen in a long time", Namco announced a partnership agreement with longtime rival Sega to incorporate some of their titles into the recently announced Dreamcast. As Namco primarily developed games for Sony consoles and was among the largest third-party developers for the PlayStation, the announcement surprised the specialized media. For its PlayStation-based System 12 arcade board, Namco launched in 1998 bladed weapon fighting video game Soulcalibur. Its adaptation to Dreamcast in 1999, with multiple graphic improvements and new game modes, is one of the first examples of a console game that surpassed its arcade version. Soulcalibur sold over a million copies, won numerous awards, and contributed to the early success of the Dreamcast.
Financial problems and restructuring (1998-2005)
Namco began experiencing a decline in its consumer software sales in 1998 as a result of what is known as the "lost decade" in Japan, which affected demand for video games as consumers had less time to play games. The company's arcade division had similar problems, falling 21% at the end of its fiscal year, which ended in March 1998. Namco Cybertainment became filed for Chapter 11 bankruptcy in the United States in August, being forced to close several hundred of its underperforming arcades in North America while its parent company underwent a reorganization process. In its 1998 annual report, Namco reported a 26.3% drop in net sales, which it blamed in part on reduced consumer spending.
In November 1999, a further 55% decline was recorded in the production of games for home consoles. In order to diversify their gaming markets arcade and entertainment, Namco entered the mobile phone market with Namco Station, an i-mode mobile content service that offered versions of its arcade games, such as Pac-Man and Galaxian. It also acquired a majority stake in Monolith Soft, an action role-playing game developer best known for the Xenosaga series. It continued to introduce new concepts to arcades with in order to attract players, such as the Cyber Lead II, an arcade booth with slots for PlayStation memory cards and Dreamcast VMUs.
Its financial situation worsened in the 2000s. In October 2000, the Japanese newspaper Nihon Keizai Shimbun reported that the company expected losses of 2.1 billion yen for the fiscal year ending March 2001. The company had already hinted at this during a meeting with industry analysts, blaming its difficulties on Japan's depressed economy and dwindling gaming market arcade. The company closed its Wonder Eggs park on December 31, 2000, which had amassed a since-opening attendance of six million visitors, in addition to closing many of its arcade arcades that were making below-average profits. expected. In February 2001, Namco updated its guidance and reported that it now expected a net loss of 6.5 billion yen and a decline in revenue of 95% for the fiscal year, severely impacting the company's release schedule and corporate structure. losses, its development strategy was reorganized to focus primarily on established franchises, and 250 of its employees were laid off through what it described as "early retirement". Namco began a restructuring to increase its revenue, which included reorganizing its team director and the announcement of the development of video games for Nintendo's GameCube and Microsoft's Xbox.
Following its financial problems, Namco's arcade division underwent a major reorganization. In those years the division achieved great success with Taiko no Tatsujin, a popular rhythm game in in which players beat a special taiko drum-shaped controller to the beat of a song; Taiko no Tatsujin became a bestseller and created one of the company's most popular and prolific franchises.
Meanwhile, its North American divisions were reorganized and restructured due to declining profits. Namco Hometek lost its research and development divisions after the company's disappointment with the quality of its releases. other non-gaming divisions, such as neuropsychological rehabilitation electronics and travel agency websites, led to the creation of the Namco Incubation Center, which would take over control of these businesses. The Incubation Center also housed the school of video games Namco Digital Hollywood Game Laboratory, which designed the sleeper hit Katamari Damacy (2004).
Nakamura resigned as president at the end of the year and was replaced by Kyushiro Takagi. Concerned about the company's continuing financial problems, Nakamura suggested looking into merging with another company. Namco turned first to developer Square. of the Final Fantasy franchise, and Enix, publisher of the Dragon Quest saga, offering to merge them into a single company. Yoichi Wada, president of Square, was not convinced by the Namco's financial situation and rejected the offer; although not a merger, Square agreed to enter into a business alliance.
They subsequently contacted Sega, a company then struggling to stay afloat after the commercial failure of the Dreamcast, but Sega's development teams and extensive backlog piqued the interest of Namco, who believed that a merger would allow both to increase their competitiveness. Sega was already negotiating a merger with pachinko system maker Sammy Corporation; Sammy's executives were outraged to see Sega considering Namco's offer. A failed attempt to void the merger led Namco to withdraw its offer the same day Sega announced that it had rejected Sammy's. Although Namco stated that it was willing to negotiate with Sega for a future deal, Sega rejected the idea.
Shigeichi Ishimura, Nakamura's son-in-law, succeeded Takagi as president of Namco on April 1, 2005; Nakamura retained his position as CEO of the company. This move was part of Namco's continuing efforts to reorganize to adapt to changing markets. On July 26, as part of its 50th anniversary celebration, Namco published in Japan NamCollection, a compilation of games for the PlayStation 2.
In 2005 he opened Riraku no Mori, an add-on to his Namja Town park that featured massage parlors for visitors, believing it would help turn relaxation into a mode of entertainment. That same year he released The Idolmaster , a life-simulation rhythm game, which was hugely successful in Japan and spawned a multi-million dollar franchise.
Bandai takeover and disbandment (2005-2006)
In early 2005, Namco began discussions with Bandai, a toy and anime company, about a possible merger. subsidiary of Bandai, to create an arcade game based on Mobile Suit Gundam: One Year War. Bandai was interested, considering Namco's experience in game development, combined with its own extensive catalog of characters and profitable franchises, such as Sailor Moon and Tamagotchi, could increase its competitiveness in the sector.
Nakamura and advisers from Namco's content development division opposed the idea, believing that Bandai's corporate model would not fit well with Namco's more rural working environment; Bandai for focusing on promotion and marketing over quality. As Namco's financial status continued to deteriorate, Ishimura lobbied Nakamura to support the merger. Bandai's offer was accepted on May 2 and both companies declared in a joint statement that their financial difficulties were the reason for the merger.
The takeover bid for Bandai to acquire Namco for 175.3 billion yen, ended on September 29. On the same day, Namco was created. an entertainment holding Namco Bandai Holdings; although their executive departments were merged, Bandai and Namco remained independent subsidiaries of the new holding. Kyushiro Takagi, vice president of Namco, was named president and director of Namco Bandai Holdings. The combined revenue of the new business corporation was estimated at 458 billion yen, making Namco Bandai the third largest Japanese video game company after Nintendo and Sega Sammy Holdings.
While its parent company busied itself with preparing its full business integration, Namco continued business as usual, including the October release of Ridge Racer 6 for the newly released Xbox 360 and collaboration with Nintendo to develop the arcade game Mario Kart Arcade GP. The company celebrated the 25th anniversary of its Pac-Man series with Pac-Pix, an action game for the Nintendo DS, and entered the massively multiplayer online video game market with Tales of Eternia Online, an action role-playing game based on its franchise Tales of.
On January 4, 2006, Namco Hometek merged with Bandai Games, Bandai America's home gaming division, to create Namco Bandai Games America, absorbing Namco America's subsidiaries and completing the merger of Namco and Bandai in North America. Namco's console games, enterprise software, mobile phones, and research facilities divisions merged with Bandai's console division to create a new company, Namco Bandai Games, on March 31, while Namco was officially dissolved.
On the same day, the Namco name was reused for a new subsidiary of Namco Bandai, which took over its predecessor's theme park and amusement facilities activities. Namco's European division merged with Namco Bandai Networks Europe on January 1, 2007, becoming the company's website and mobile games division. Until April 2014, Namco Bandai Games used the Namco logo in its games to represent the brand's legacy.
The Namco Cybertainment division was renamed Namco Entertainment in January 2012, and Namco USA in 2015. Namco's second company was renamed Bandai Namco Amusement on April 1, 2018 following a corporate restructuring of its parent. Amusement took over the arcade game development division of Namco Bandai Games, which was renamed Bandai Namco Entertainment in 2015.
Namco USA was absorbed by the North American arm of Bandai Namco Amusement in 2021, following its parent company's decision to exit the arcade management business in the United States. This makes Namco Enterprises Asia and Namco Funscape, the arcade division of Bandai Namco in Europe, the last companies to use the Namco trademark in their names. Bandai Namco Holdings and its subsidiaries continue to use the Namco brand for various products, such as mobile phone applications, streaming programs, and esports-focused arcade centers in Japan.
Legacy
Namco was one of the world's largest developers of arcade video games, with more than 300 titles published since 1978. Many of their games are considered among the greatest of all time, such as Pac-Man, Galaga, Xevious, Ridge Racer, Tekken 3, Soulcalibur or Katamari Damacy.
Pac-Man is considered one of the most important video games in history, as it helped foster originality and creative thinking in the industry. Namco was recognized for the game's worldwide success in 2005 with its inclusion in the Guinness Book of Records; by then, this game had sold more than 300,000 arcade booths and grossed over $1 billion worldwide. In an obituary dedicated to Masaya Nakamura in 2017, Damien McFerran of Nintendo Life wrote: "Without Namco and Pac-Man, the world of gaming would be very different today."
His entrepreneurial style and innovation have received recognition from various publications. In a retrospective on the company published in 1994, an Edge writer described Namco as "one of the true pioneers of the coin-operated arcade business," with a catalog of highly-accepted and exciting titles. Historical importance; the writer believed that Namco's success lay in its forward-thinking and steadfastness in quality, which he felt set it apart from other developers. A NextGen writer wrote in 1998: "In a world where today's stars almost always become tomorrow's losers, Namco has consistently made excellent games for most of its history"; the writer credited the company's connection to its gamers and its influential releases, such as Pac-Man, Xevious and Winning Run, as the keys of its success in a rapidly evolving industry.
Industry publications and journalists have noted the importance of Namco to the industry. Hirokazu Hamamura, editor-in-chief of Famitsū, credited the quality of the company's releases with increasing the popularity of video game consoles and, in turn, the entire Japanese video game industry. Writers for Ultimate Future Games and PlayStation Official Magazine – UK have credited the company and its games with the early success of PlayStation, one of the world's most iconic entertainment brands. world. Also PlayStation Official Magazine – UK reported that Namco is "the godfather of game developers", and one of the most important video game creators in history.
IGN stated in 1997 that Namco represents the industry as a whole, as titles like Pac-Man and Galaga associate and they represent video games; They posted that: “Tracing the history of Namco is like tracing the history of the industry itself. From humble beginnings on the rooftop of a Yokohama department store to the imminent release of Tekken 3 for PlayStation, Namco has always stayed ahead of the curve." In 2012 the same magazine listed Namco among the best video game companies of all time, considering that they created modern hits that continue to thrive today and that many of their games, such as Galaga, Pac-Man or Dig Dug, defined the history of video games.
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