Scalebound

The legislation is a myth? Despite being published and viewable? And there being an actual list of companies for which there is a presumption of denial? That is updated quarterly? A myth? Really?

Perhaps you misunderstand the legislation, which you can actually read. There are is list of Japanese-registered organisations (which include, Capcom, Nintendo, SEGA, Sony, Sqaure etc) for which there is a presumption of denial and everything else is subject to assessment. I don't know what significance Platinum Games would be to Japanese culture, but that's the purpose of the assessment.

Tell me why it is so rare that Japanese videoogame companies get bought by foreign companies, and yes it's so common that non-Japanese companies are consolidated or acquired? Is it really just coincidence? The time, effort and cost is certainly part of it.

 

It's not all THAT rare. Just look at the past 6 months. 2 Japanese developers were acquired by Chinese companies.

90% (controlling) stake in Wakeup Interactive.

Tencent Acquires Stake In Japanese Creative Studio For $44M (yahoo.com)

Full ownership of Grasshopper Manufacture.

NetEase Games Acquires Grasshopper Manufacture | Gaming Instincts

Also consider that Chinese companies are under FAR more scrutiny with a far greater likelihood of being denied permission WRT acquisition of Japanese companies than American companies. Game development companies are just not generally high on the list of consideration by the Japanese government WRT restricted foreign ownership.

Further, the legislation is toughest WRT companies or corporations that the Japanese government consider to be dealing in "sensitive technologies". So, financial, medical, technology (mostly WRT to infrastructure, hardware, or tech related to other sensitive industries), etc. It's currently almost impossible to acquire any company involved in Japan's medical sector. OTOH - there are also companies that do not require government approval (pre-screening of any stock purchase greater than 1% of a company's shares). The only requirement is that the purchase is registered with the Japanese government after the purchase has happened.

Roughly half of Japanese companies registered with the Japanese government do not require any pre-screening before foreign companies can start acquiring large chunks of those companies.

Just because they don't make front page news in the West doesn't mean that Japanese game developers aren't being acquired by foreign companies.

Regards,
SB

 

+1 Platinium games won't receive any screening, this is just a studios. They don't even have big IP.

 

Yea I could see Japan stepping in on Nintendo getting bought or Sony as they have huge employee bases in Japan. But something as small as platinium ?

 

Probably. However, keep in mind that owners and employees of Japanese companies are also generally far more reluctant to be acquired by foreign companies. That more than the government prevents foreign acquisition of many Japanese companies.

Platinum has a strong desire to remain independent, so it's unlikely that they'll be acquired by anyone, let alone a foreign company. That said, however, they have received an undisclosed amount of investment from Tencent. But they claimed at the time that Tencent would have no input on what they develop.

Regards,
SB

 

People have been pointing out that law as a reason to for Microsoft not being able to purchase any Japanese company and I thought this was about the possibility of Platinum being bought and not something like Sega that is why I pointed it out as a myth they would have a hard time buying a company of Platinum size and pointed out the criteria that would stop the sale... though I do question if it would be that hard to buy a company like Sega depending on the circumstances. It was not meant to be an insult just saying.

 

The whole point of this conversation, is from the fact that they are open to it now. And also seem to be publicly courting MS.
Maybe the daily fight to keep the company from going under just isn't worth the hassle anymore.
Especially if they can keep creative freedom.

 

I think Microsoft should let them finish Scalebound then see how they still feel about the relationship afterwards. It would be the best course of action.
Having a studio work as a second party has proven to be a good way to find out if purchasing that studio is a good idea.

On the other hand, giving them a second chance ups the stakes for both parties. People will want to see them fail and I'm not only talking about people who are anti-Microsoft/Xbox. It absolutely needs to work out especially for Platinum's sake. With how many studios Microsoft currently owns, a failure can be easily absorbed but for Platinum...

 

It's far rarer for foreign acquisitions of medium or large Japanese videogame companies, it's basically unheard of. Again, I literally posted a list of companies for which acquisition and significant foreign investment comes with an automatic presumption of denial, and both of these were assessed and approved.

Because those assessments aren't published, it's difficult to know what influences those decisions. Platinum Games have worked with both Nintendo and Sony, who are listed, and who would get the opportunity to express a view on any foreign investment in Platinum games. What's the expection that neither would express concerns about a Microsoft acquisition?

 

Uh, but we're talking about Platinum Games and they are not in that list. And if they were, they'd be listed under category 1.

Also, note that Capcom isn't protected and neither is Square-Enix. It's noted as requiring only a post investment report. Foreign companies are free to purchase large chunks of the company with the only requirement being that they report the purchase of those shares to the government after the purchase has completed. There is no automatic presumption of denial for any company or corporation in category 1.

Basically anyone in category 1 is part of the group of registered companies that only require post-purchase notification. No government approval is needed prior to purchasing large chunks of the company.

Please note that just like Capcom and Square-Enix, Japan Creative Studio is listed under category 1 and are now under ownership by a Chinese company.

Sega is category 2 which has some limited restrictions where the government will look at it, but unless they have serious reservations (like the purchasing company being located in a country that Japan is uncertain about or are not allies with), they're likely to approve a purchase. The government considers them important enough to have some limited government oversight, but not important enough to automatically deny foreign investment and acquisition.

Sony is category 3 where denial is virtually guaranteed. These are companies that are in the "core" categories (medical, financial, etc. IIRC, there are 24 core categories). Note that Sony is part of Japan's financial sector (a core category). Thus it would be almost impossible to acquire the whole of Sony. However, purchase of parts of Sony (like TV or PlayStation) wouldn't trigger category 3 considerations. Those would fall under either category 2 or category 1. Of course, that would require spinning off those divisions first before they could be sold to a foreign entity. If a company or corporation is listed as category 3, then it's difficult for any foreign companies to purchase any significant amount of shares (anything greater than 1%) unless that company is on really good terms with the Japanese government.

Going back to Platinum Games, since they aren't even listed as Category 1, there isn't even a requirement for post purchase notification to the governmental body that overlooks company and corporate acquisitions.

Of course, a change of ownership would require notifying the government, but anyone in Category 1 are highly unlikely to be denied a change of ownership unless the Japanese government has serious issues with the originating country of the purchasing corporation. For example, any company based in North Korea (if there exists any non-government owned companies) would get denied.

Regards,
SB

 

Maybe like how playstation music was sold to Spotify?

 

So MS didn't request 4 player co-op it was there from the pitch. Really interesting

I wonder if all this chat about Scalebound is because the deal is already done and has been long enough for a e3 announcement

 

Admittedly I don't hang out on social media, but this is the first time I've heard of people claiming that Platinum Gamers were embezzling funds from MS. Usually what I've heard from people that don't pay attention was that Platinum Games "Good" and Microsoft "Bad".

Regards,
SB

 

What interesting timing. An interview with Platinum Games.

Interview: PlatinumGames doesn’t want to be known as ‘just the action game company’ | VGC (videogameschronicle.com)

Some important things potentially related to some of the discussion here.

WRT Scalebound.

WRT being acquired.

Him specifically mentioning Microsoft combined with Kamiya's desire to finish Scalebound combined with talk earlier in the article about wanting to do something "different" and make a game on a larger scale than they've ever done before combined with a focus on live services kind of makes me think they've been talking to MS about potentially being acquired. They could, of course, also be talking to Sony about potentially being acquired.

Basically, for what they want to do, they need a LOT more funding than they can acquire while staying independent.

On the subject of NFTs.

That one made me laugh. I bolded it for emphasis.

Some more interesting bits, like Inaba wanting to focus on creating new IP rather than existing IP. It's a long interview and if you are interested in Platinum Games I highly recommend to read it. Lots of stuff I didn't mention here.

Regards,
SB

 

Yeah, all this is the basis of what we've been talking about.
This explains your previous post about platinum not wanting to be acquired, you never saw why it was being discussed.

Where the Platinum Games using ms money comes from is that their is a thought that they finished nier automata, whilst they worked slowly on scalebound. So basically used that money to invest in neir.

It was just mismanaged from both sides as far as I'm concerned. And they've both pretty much excepted that.

 

Square has classification of 1 (9684) and SEGA's holding company has a classification of 2 ( 6460). The list on its own isn't that helpful, and only relates to direct foreign investment (DFI) and not outright acquisitions which is what was proposed here. And in terms of levels of DFI, the Act includes various deminimus levels relative to the value of the company itself. You can read the Act yourself, but for smaller companies DFI, of around 35% may not need prior notification but for the larger companies it can be as low as 10%. And even if investment is below the deminimus, there is a long list of exceptions relating the age of the company, culturally value, it's engagement with other Japanese companies.

You need to read the Act. It's worth noting that the list also does not represent all companies for which investment is subject to approval, the it's just the top 10,000 Japan companies in particular sectors by value, plus some specifically-protected companies which are off-limits for other reasons.

 

Yes, I'm quite aware. I have relatives who own companies in Japan. Category 1 companies aren't difficult to acquire for foreign corporations as long as the Japanese government doesn't have ongoing concerns regarding either the country of origin of the foreign company itself.

As I pointed out, Japan Creative Studio was listed as a Category 1 corporation and is now under ownership of a Chinese corporation. That's important as Chinese companies face far greater scrutiny WRT acquisitions versus American companies or even most European companies.

Any corporation listed under Category 1 faces minimal resistance from the government with regard to not only foreign investment but foreign ownership.

One of my relatives there flirted with the idea of selling his company to a Chinese company due to how much was being offered. The sale would have gone through except that one night while drinking with other owners in the same business, he decided he didn't want to sell to a Chinese company. He'd already had some reservations, but the other business owners appealed to his pride as a Japanese man to not sell out to a Chinese company. They advised him to instead sell to an American company if he wanted to sell, however, no US company was offering nearly as much as that Chinese company was.

Business owner resistance to acquisition by foreign companies is far more of a determinant in Japan WRT whether or not a Category 1 company gets acquired than anything the government does in that category. Nationalism combined with historical relations between countries plays an oversized role in this.

Regards,
SB