Shedding Snake – The Downward Spiral Of Konami And Kojima’s 30-Year Partnership

This article originally appeared in issue 267. It has been updated to reflect new developments in the ongoing story.

Hideo Kojima's name has been synonymous with Konami for decades. The man behind the Metal Gear series has brought much fanfare and success to the company, but this vital 30-year relationship appears to be fading. No one is outright saying the relationship is over, but all signs point to a messy divorce between the two camps, and it doesn't look like they have much of a future together.

Cracks in the façade started to appear in March when Konami mysteriously removed Kojima's logo from its website and some of the series' box art. Konami said it was merely a move of company rebranding and restructuring. Around this same time, Kojima confirmed that the upcoming Metal Gear Solid V: The Phantom Pain would be his last in a video interview with IGN. "With Metal Gear Solid V, I'm finally closing the loop on that saga," he said. "In that sense, this will be the final Metal Gear Solid. Even if the Metal Gear franchise continues, to me, this is the last Metal Gear." Kojima has threatened this before, and even admitted such in the video, but he seemed firm on the declaration. 

Kojima may see Metal Gear Solid V as the series' end, but Konami isn't about to let go of one its top-selling franchises. The company responded, issuing its own statement: "Konami will continue to develop and distribute top-quality content in the Metal Gear series following MGSV: TPP. As the next step in the series, Konami has already resolved to develop a new 'Metal Gear' title." Konami has already posted job listings to start the audition process for this new project.

The drama didn't stop there. Konami also blindsided fans by canceling Kojima's highly anticipated Silent Hills game. To add insult to injury, the company pulled P.T. (the playable teaser that announced the game) from PlayStation Network on April 29. This isn't the end for the series, but it is the end of Kojima and director Guillermo del Toro's vision for it. Konami said in a statement, "Konami is committed to new Silent Hill titles, however the embryonic 'Silent Hills' project developed with Guillermo del Toro and featuring the likeness of Norman Reedus will not be continued."

So how did we get here? Not even a year ago, Konami was promoting Metal Gear Solid V and P.T. heavily at a slew of shows, such as TGS and Gamescom. While Kojima has always expressed his desire to step away from Metal Gear at some point, the Silent Hills cancellation comes as the biggest shock. P.T. sparked the most enthusiasm we've seen for the struggling series in close to a decade. It looked like such a smart decision all around. After outsourced entries like Homecoming and Downpour rated in the low 70s and high 60s on Metacritic, respectively, it felt good to see Konami developing the series in-house again. Kojima seemed genuinely excited to work on Silent Hills - something he's been hinting he wanted to do for a while. It would have given him a new place to foster his creativity. 

The sudden discontent between the two camps may seem like a head scratcher, but Konami has been making some business decisions for the past few years that signal a change in its company vision. Not only has Konami been dialing back its investment in console gaming, some of its main series have faltered.

Restructuring And The Cost Of Leaving Kojima Behind

The landscape of Japanese gaming has been changing over the past decade. Console games once seemed like the only way to strike gold outside of pachinko machines and arcades. Music/rhythm games, while trying to make a comeback now, all but disappeared after the Rock Band and Guitar Hero bubble. Konami kept putting out Dance Dance Revolution through 2013, but it wasn't the powerhouse it once was. Likewise, iconic Konami franchises like Silent Hill and Castlevania haven't ushered in the acclaim or revenues they once did. Last year's Castlevania: Lords of Shadow 2 had grim Metacritic scores across all three platforms: 58 (PC), 63 (PS3), and 70 (360). 

Metal Gear and Pro Evolution Soccer are the only big console properties that Konami currently has in rotation. Over the past three years, Konami's digital entertainment division revenue has decreased 30 percent. These shrinking returns pale in comparison to Konami's gambling, health, and pachinko divisions, and signs point to the company restructuring its business to have a lessened investment in the console space. In 2012, Konami had six titles listed for global release on console and handheld. For this year at the same time, it only has Metal Gear Solid V: The Phantom Pain listed. Pro Evolution Soccer hasn't been announced yet, so we suspect the number will move up to two once it does. (Editor's note: As expected, Pro Evolution Soccer 2016 has been announced since this feature's original publication.)

Many Japanese publishers, like Square Enix, Capcom, and Sega, have tapped into the mobile gaming market to supplant or buttress its console business, and Konami is hoping to do the same. "I believe that the overall game market will continue to grow, with mobile devices as a driving force," Konami Digital Entertainment president Hideki Hayakawa said in an interview with Nikkei. He envisions key series like Metal Gear joining other mobile properties like Dragon Collection, a 2010 release that still contributes to its earnings.

"At the moment, it very much seems like Konami aims at further increasing mobile-game devel opment to create another hit like that," says Serkan Toto, the CEO of consulting agency Kantan Games. "It's much cheaper and faster to produce multiple high-quality mobile apps and see how the market reacts when compared to triple-A video game development. And if Konami does land a hit someday, they can make up to a billion dollars per year and more on mobile and in Japan alone. This is impossible to do in the [console] market."

Read on for more on Konami's changing profile.

All these developments point to life beyond Kojima. The company is cutting costs where it can, and it's possible Kojima and the game he envisions are just too costly and risky in the current landscape. Metal Gear Solid 4: Guns of the Patriots cost Konami around $60 million, making it one of the most expensive video games at the time. While it's unclear how much money Konami has invested in MGS V, Toto estimates it's around $80 to 90 million with budgets going up. Cutting costs could explain why Snake (voiced by Kiefer Sutherland in MGS: V) is now more of a silent protagonist. Contracting Norman Reedus to use his likeness for P.T. couldn't have been cheap, either. 

Still, Kojima would be a big loss for the company; imagining a Metal Gear game without him is hard. "It was undoubtedly Kojima who made the MGS games what they were: Losing that 'touch' and subsequently the franchise's unique selling proposition could very well mean the end of a revenue stream for Konami," Toto says. "Kojima has always been a great marketer and poster boy for Konami, not only in Japan but also abroad." 

"I think Kojima's departure is devastating to the console business, similar to Miyamoto hypothetically leaving Nintendo," says Wedbush Securities analyst Michael Patcher. "I don't know how Konami will manage the transition."

If Konami shifts away from console development completely, replacing Kojima wouldn't be an issue. But if Konami wants to stay competitive it must find a way to make up for his loss. 

As for Kojima, he'll have options if he's done with Konami for good. Reports suggest Kojima will leave the company following the release of Metal Gear Solid V. After that, he could follow the footsteps of former Konami compatriot and Castlevania mastermind Koji Igarashi and fund a smaller-scale project via Kickstarter. Perhaps another major publisher like Sony or Bethesda would approach him about joining forces. The possibility also exists that Kojima would walk away from games and try his hand at filmmaking.

We have no official confirmation, but the writing is on the wall, and we see no way there is a continued relationship between Konami and Kojima. The distinct possibility exists that this would be just one of several moves to put the company on a new course. As Toto notes, "Konami in 2016 and onward could be a totally new company from what it is right now." 

More Evidence Emerges In Recent Days

Since the publication of this feature in Game Informer issue 267, even more evidence has emerged suggesting that the rift between Konami and Kojima is widening. Longtime Solid Snake and Big Boss Japanese voice actor Akio Otsuka issued a statement earlier this month suggesting that Kojima Productions was "forced to disband."

Yesterday, new retail packaging for Metal Gear Solid V: The Phantom Pain was released on Konami's press site. The new artwork is missing both Hideo Kojima's name and the Kojima Productions logo. When reached, a Konami representative told us the company did not have a comment at this time. 

Social media reaction from fans to this latest blow has been largely negative, with series faithful lashing out at Konami for the slight. With The Phantom Pain only six weeks away though, we won't have long to wait to find out what the future holds for Konami and its most valuable creative mind.