March 21st, 1969, Osaka, Japan: An entrepreneur by the name of Kagemasa Kozuki opens a jukebox maintenance and repair shop. This business leads to generalizing into all forms of coin-op entertainment machines under the brand name Konami until it settles on video game cabinet service by the late 1970s. This leads to them developing some early arcade video game titles, a few of which go on to international success: Frogger, Scramble, and Super Cobra. Following this, they established a US subsidiary, Konami of America, by 1982, and were on their way to a thriving gaming empire.
Having just passed their 50th anniversary, Konami Holdings Corporation is now in so much hot water that rumor has it that they will shut down their video game division entirely. The company itself firmly denies these rumors, saying instead that they’re having a “restructuring.” However, Konami has lost so much credibility over the years that a denial is as good as a confirmation these days.
How did it happen? How did we get from a happy little game about a frog hopping through traffic to this? Where do we start?
Konami Was Done With Video Games Years Ago
It is rare to see a major game company suddenly quit making video games. This is a company that still exists, is still profitable, and has other plans for continuing business going forward. Just packing up its video game tent and leaving the swap meet. Video games are the world’s top profitable entertainment industry, in recent years even squeezing Hollywood off its long-claimed throne as the biggest entertainment industry.
But long about 2015, Konami suddenly made abrupt moves that guaranteed the end of its standing in the video games market. First, it cut off Silent Hills mid-development. Film director Guillermo del Toro was attached to the project and withdrew, with singed fingers, yelping indignantly all the way home.
Konami CEO Hideki Hayakawa announced that they would stop making games for the console, period, but would continue to piddle about on mobile games. Then Konami hauled off and fired the Kojima Productions studio, which said “nuts to that” and went independent. To add insult to injury (which might as well be Konami’s new corporate motto these days), Konami barred the studio from accepting awards at Gaming Awards 2015, an announcement which elicited boos from the crowd.
Which brings us to the utterly disgraceful treatment of game creator Hideo Kojima. Konami scrubbed his name from the game credits of Metal Gear Solid 5, sent him nastygrams claiming that he was “unfairly sullying the reputation of our company,” and then went around bad-mouthing Kojima to other game studios and the media in general. They even managed to block Kojima from getting health insurance just through country-club connections alone.
We still don’t know the details of this break-up! All we have are the flabbergasting actions of the company. However, a hint to one piece of the puzzle surfaces…
Konami Was a Sweatshop To Work For
Konami, it comes out, treats employees like prisoners. Horror stories from within Konami rival any horror-themed game the company has put out. Employees are monitored in their offices with 24/7 camera surveillance, are cut off from the public Internet, and reassigned to lowly positions like janitorial work in a disciplinary fashion. Konami snoops the social media feeds of its employees both former and current, and once you quit working for Konami, the company tries to hound you off the face of the Earth. They file complaints against other game companies for hiring their ex-employees, who are actually referred to as “ex-Kons.”
All of this seemed to be triggered by the rise of mobile games in the early 2010s. Konami seemed to feel that it was time for a platform change and would doubtless believe that consoles would have been extinct by now. Or, perhaps, the studio development industry just doesn’t suit a company that would rather make a faster, greasier buck.
However, there is one other big enterprise that still has Konami’s attention: Pachinko machine gambling. Konami, never having lost focus of machine cabinet gaming from its old arcade days, has kept a hand in Pachinko and stayed there the whole time. They have repurposed all their old game intellectual property as dressing for Pachinko machines.
Pachinko in Japan
This takes some explaining. While gambling has actually been illegal in Japan, laws are just relaxed enough to allow a loophole for recreational games of “skill,” and to award prizes the same way our US arcades dispense strings of tickets which can be redeemed for a teddy bear or whatever at the prize booth. In Japan, you spend money to buy Pachinko balls, play, then cash in your balls for a prize, whereupon you then leave the premises with the prize and sell it at the convenient shop located just outside the Pachinko parlor – for money.
The Japan Pachinko market is valued at $200+ billion per year, which is pretty good for what looks, to the Western eye, like glorified pinball machines. Because there is no other outlet for the gambling urge, all of the effort that would be attached to everything from the lottery to sports book to plain old Blackjack in the US, is in Japan all funneled instead into making Pachinko as addicting as it possibly can be. So even “without gambling,” Japanese can be addicted to gambling anyway. Except Japan doesn’t have to acknowledge a problem and provide treatment for it, because, silly rabbit, it’s “gaming” not “gambling”!
Pachinko parlors in Japan have the same seedy reputation that casinos do in the US. It’s considered a dirty business that preys on low-lifes. And Konami is in it snout-deep. Meet Silent Hill Pachinko!
Now, our American readers are probably scratching their head wondering about this Pachinko business. If it’s pseudo-gambling, and American casinos were (maybe even still are?) cozy with organized crime, is the same influence in effect over in Japan? Ding, you are correct!
> “It is not hard to find yakuza in the pachinko business – and at least a couple pachinko operators and hardware manufacturers reportedly have deep underworld ties.”
Anyway, we’re not trying to draw lines between organized crime and a former video game publisher. In fact, the list of license-holders for top Pachinko game franchises will sound familiar to Western gaming and anime fans, as they include Sega, Bandai, Namco, Capcom, and Square Enix. Who’s casting the first stone?
Now, in some cases, beloved game franchises have gotten the torch passed. Rumor has it that a new Silent Hill game may come out in 2023 for the PC, not another damn Pachinko machine. We certainly hope that Konami can find it in its heart to at least sell off their intellectual property so that other game studios (and their own former game creators!) can carry on their work. As it stands, this is like watching a beloved pet die.
Even without Pachinko, Konami’s way of doing business hits many a raw nerve, as with their incredibly sleazed-up version of Bombergirl. It borders between ecchi and straight-up hentai. And for heaven’s sake, Bomberman was a cool little 2D maze game where you blow up cute little monsters! Why was this necessary?
So now you know what happened to Konami: Straight down the garbage can!