They’re broken, and heading in a direction of continued brokenness. This has been something that has been nagging at me for years, and as the years have gone by I find the industry moving in the direction that most worried me.

What’s broken you ask? In a word, sustainability. The industry is facing pressures from all sides that make it downright unattractive to run a proper business. On top of that, it’s embarking on a strategy that’s at best slippery slope in order to stay afloat.

Not too long ago, when the industry was young, the only games that really came out where the nukige, the pointless sex-romps. The reason was simple, it was economically worth doing. The market for those games are very well defined, they aren’t asking for very high quality writing, so you can get the scripts translated by low quality translators at bargain bin rates. The titles that were bought also came from relatively inexpensive licenses. Put together, that kept costs very low, and put the margins within a range where the price wasn’t too objectionable to the people buying, and things stayed profitable.

Then, things started moving. People in the West started to demand the more famous story-based visual novels, evidenced by translation projects for major games popping up in the wild. Kanon, Air, Tsukihime, Fate, Higurashi, to name a few. As time went on, more and more titles started appearing, some completed, some forever abandoned. Even now, the pace continues to hasten as more and more people learn of visual novels and people decide to spend their energies on making translation projects.

Much like how the anime industry was created in a similar way, the visual novel industry is currently being hauled up from the grass roots. Companies, seeing that there is some sort of demand, have stepped up to try to fill the demand. Then, they start having problems.

Business side problems

From the viewpoint of a company trying to bring VNs over to the west, the biggest problem at the end of the day is cost. Proper localization is not cheap – in fact, a license itself isn’t cheap, but the work to bring it over much more expensive than most people give credit for.

For example, Narcissu 2 would’ve cost probably $10k to localize by a professional game translation team. Sound like a lot? It probably would’ve taken a few months of work by a small experienced team, but if you consider having 3 people, each getting paid 40k/yr salaries working for 3 months to get it out the door, that’s $10k right there. Sadly, the state of things is that current VN translators aren’t paid 40k/yr by a long shot.

On top of just the localization costs, you have production costs. Royalties have to be paid to all copyright holders, including the voice actors, agencies, writers, contracted music and art. Costs of distributions, servers and bandwidth are relatively cheap, but certainly not free by any stretch. Then you’d like to do little things like pay for your own company’s staff and overhead. It all adds a few pennies here and there to the unit cost.

High setup costs in and of itself aren’t a problem, so long as you can make enough back by selling things. But that’s where the second set of problems kick in.

Demand side problems

The number one problem is culture. That is, visual novels are usually adult goods. Culturally speaking, at least in America, one of the largest markets, that puts an extreme cap on the reach of the market. Remember, it’s the country that has FCC hearings and court cases over wardrobe malfunctions and fleeting expletives on a semi-regular basis. Every last one of you readers must know at least someone who likes anime, but would not even consider buying a visual novel simply because it is an 18+ item.

Next, the market is placing very strong demands on prices. They demand that a visual novels should be “comparable” in price to “alternative forms of entertainment”, and balk at paying anything much higher. Despite the fact that even console games in Japan have a list price of around 7800 yen, compared to the typical 8800 for full sized VNs.

And remember when Mangagamer announced that they couldn’t get voice clips in Koihime unless they hit sales of 2k units and people flipped out? What kind of market do you have if your own customers don’t even believe you can sell 2000 units?

What the industry does to survive

So, if you can’t raise the price because you’ll destroy your already pathetic sales thanks to piracy, alternatives, and lack of awareness of your product, but also can’t see doubling your sales by charging 50% less, what’s left for a business to do? Cut costs.

Originally, costs were cut by hiring the cheapest, crappiest translators out there. Usually students with a shaky grasp of both languages and no skill at translating whatsoever. You may remember these as the translated games from the early 2000s that earned VNs a reputation for bad translations.

These days, quality has gone up, as has the demand for quality, but the pay hasn’t. I know, because a number of my friends are translators in these companies, working on these projects, and I’m honestly amazed they can afford to have a roof and feed themselves. You still have kids coming fresh out of college willing to work a starving wage doing translations, the only difference is that there’s processes in place to weed out shitty quality.

Fan translations, and the danger ahead

Finally, in the past two years or so, a new trend has started to come out. The major VN localizing companies (not brands, companies), of which there’s only 2 really, have been approaching fan translations in order to ‘buy’ their work. It’s something that I knew would happen eventually years ago. And as expected, it’s going down the path the most obvious, and at the same time, most dangerous path.

The details of these contracts vary wildly case by case, and I’m not privy to the details. However, I know that in some cases, the scripts are transferred from the fan group to the publisher for free, or for a nominal fee that amounts to a tiny fraction of what it would normally cost were it to be done by professionals in the more traditional process. In other cases, there’s a contract hiring going on, but at low rates.

By doing this, a huge chunk of the development costs incurred in bringing a VN effectively disappears. You still have to pay a lot to vet and check the translation, which can take almost as long as a normal full translation but less manpower. But if the original translators were trustworthy and good, you can save a lot of time and expense.

(As an aside, to their credit, I have not yet heard of a company who deliberately waited for a fan translation to come to near completion before swooping in and offering to buy at bargain prices. That would be one of the most reprehensible things I can imagine in this topic. Most often it seems more a case of a 3rd party coming in and making the connection.)

So wait a minute. Isn’t all this a good thing? Costs are lower, prices can stay lower, people get games? Where’s the downside?

The downside is that word I used at the start, sustainability. This isn’t a situation that can continue on forever or even for a decade. Economically speaking, this puts extreme downward pressure on the price of translation. It takes months of hard work to translate and localize a single VN, and whoever does it has reasonable expectation to be compensated fairly for the time and effort — that’s what it means to “do something for a living.” And yet, the current contracts don’t come anywhere near that price.

Sure, you can argue that the cost of a fan translation, if stated in terms of annual salaries, isn’t worth $40k/yr/person because it was created on “free time”. But on the flip side, consider the value of that exact same script to the buying company. It is worth something, because they’re selling for a profit that the translator will never see. Do you see a fair exchange going on? I’m not.

I argue that there’s a point past which the price is just too cheap, when the gap between “cost to translator” and “value to buying company” are just too far apart. Maybe it’s $30k for one person, maybe it’s $10k for another, but that point exists somewhere. It’s exactly because this isn’t happening that I fear the industry is headed toward an unsustainable future.

I’m not opposed to fan translations working with companies to create commercial works. In fact, considering the many obstacles I’ve already mentioned, I think it’s the only way many games will ever be brought over. That’s why we should be finding ways to make it work for everyone involved. Things can’t keep going in a direction where the translators get budgeted out of a living competing against unpaid volunteers who are effectively donating to a for-profit enterprise. Depending on the goodwill of volunteers, for a skill that is demonstrably worth money on the open markets, is not healthy.

At the end of the day, some kind of economic parity has to be reached. Whether it’s through aggressive revenue sharing (company pay less up front, but have greater long term upside potential for the staff if a title becomes a hit), or just flat out companies figure out how to manage the demand side (via stronger marketing or smarter pricing) so they can actually make enough to pay proper rates up front.

Another interesting idea would be to have a non-profit-like entity that exists to link localization teams w/ VN companies, while charging for and taking on the risk of developing and publishing titles…