I don't know if you're familiar with OTX but it's a research firm, and it releases GamePlan, a list of purchase intent for the top 25 games in North America. Of the 25 games, only three of them are developed in Japan. How do you feel about that situation?

YW: What are the titles?

The research was conducted a little bit ago; one of them's out now. They're Super Mario Galaxy 2, Gran Turismo 5, and The Legend of Zelda: Skyward Sword.

YW: My immediate reaction to hearing those three titles is that those statistics must have been taken when major, more powerful Japanese titles were not released. Those are not the titles that I've heard about more recently.

[Wada sketches a Y-shaped diagram with a point on each of the tips.]

This axis is the game's element -- for example, is it a sandbox game? An FPS? A cover action kind of game? This is the game's main element.

The second axis is the characteristics of the device it's for -- 3DS, Kinect, Wii.

The third axis is the community aspect. Is it multiplayer, or so forth?

And this [Wada indicates the first axis] is the axis that Japan has become very weak in for the past five years. And these [other] two levels haven't changed much. The Western developers have become much stronger, during the past five years, in this aspect -- the game element. This is the area the Japanese creators are struggling with right now, trying to explore in new ways.

So if you look at all these three factors and ask, "is Japan strong or weak today?" I don't think we can say Japan's strong. But when I heard those three titles that you mentioned, I don't think they correctly reflect the current state of Japanese games and their creative strength. So it could have been the timing at which this research or survey was conducted. Maybe it was a time when strong Japanese titles were not around.

You've announced the Extreme Edges series of Western games in Japan. Do you think that that's a way to get Japanese audiences interested in the titles that you now have access to, through your relationships with Activision, or through your Eidos studios?

YW: Japanese gamers have been avoiding Western games way too much, and as a result for the past five years, they have not even given themselves a chance to experience this aspect -- the game elements [Wada indicates the diagram again.] They haven't even had a chance to try that.

But there are many wonderful games from the Western market as well, and I wanted Japanese game players to enjoy them, too. Of course, I wanted that to contribute to our sales, but I also wanted that to inspire the Japanese game creators. The more they're exposed, the more they can learn.

Do you think that you can make these games mainstream hits in Japan, and sell as well as domestically produced titles, or is it more about just bringing them out and seeing how they perform?

YW: How much do Japanese game users seek diversity in the games they play? Will they be able to accept the diversity of the different games? I will know that only after the observing their reactions.

But I believe that the games like Batman or Fable III are something Japanese gamers would naturally love very much. If I lied to them and told them that these games are developed by Japanese teams, I think Japanese fans would jump to it.

You've released Activision's Modern Warfare 2 and some of their other games in Japan. How would you describe your relationship with the company, and is it satisfying to both parties?

YW: Our relationship with Activision is limited to the Japanese market only, and it's simply to sell Activision titles in Japan. But basically, it's executed on title-by-title basis. By the way, we have a distribution agreement with Ubisoft. Actually, we have such a relationship on a title-by-title basis with several other companies, as well.

In general, they're all going very well. And with regards to Modern Warfare, there were scandals, so I was a little concerned, but fortunately it looks like their next title, Black Ops, will be released as well. I feel relieved. [Ed. note: Square Enix has confirmed that it will publish Black Ops in Japan.]

It's interesting to see that Nier has become a cult hit in America; it's not exactly a huge game, but it's got some buzz. The New York Times wrote a review calling attention to how great the story is. Did you expect that kind of reaction, and are you satisfied with the title?

YW: Yes, I thought it would be a cult hit, but I'm saying this as a gamer -- not as the president of the company. As a CEO, my instruction was to make it a major hit. But this Nier team, they just do cult hits. (laughs)