Dawn of Ys
Image: Falcom

Nihon Falcom should need no introduction to Time Extension readers. Whether it's original works like Legacy of the Wizard or the Legend of Heroes series, or remakes such as Faxanadu on NES and Popful Mail on Mega CD and Super Famicom, you've probably seen or played a Falcom game.

Formed in 1981 by Masayuki Kato, the company started as a computer store, selling hardware alongside software made by others. But it quickly moved into developing its own games, helping to establish and refine the JRPG genre; alongside Enix, Square, and Atlus, it's fair to describe Falcom as one of the four cornerstones of Japan's RPG output.

Falcom is also notable as one of the longer-standing Japanese developers. Legendary companies like Hudson and Taito have been absorbed into others and faded from public relevance, whereas Falcom is still creating smash hits, including newer entries in its Ys series, most recently Ys IX: Monstrum Nox.

That's quite impressive, isn't it readers? But what if we told you that around 1989, there was a slow but steady exodus of staff, the company's output dropped, and Falcom almost ceased to exist? Searching online for the history of Falcom mostly brings up sterile interviews with current president Toshihiro Kondo, who took over in 2007. He goes to great lengths to hide any of the company's struggles. There are only a couple of places which describe Falcom's near collapse, and these lack first-hand sources. The Untold History of Japanese Game Developers, however, interviewed multiple developers who worked for or with Falcom. All of them gave broad reasons for the staff walkout.

Then-president Masayuki Kato didn't pay staff enough, was narrow-minded over new hardware, and generally mistreated those who worked for him. As you'll discover, Falcom was not above hiring underage middle-school kids to help with programming, removing the credits of staff, denying holidays on national days of mourning, and refusing to share bonuses from blockbuster hits. These are serious allegations though, so we present to you the words of those involved with Falcom as they were spoken.

Mikito Ichikawa, president of Mindware (MaBoShi: The Three Shape Arcade)

"Starting from around the autumn in 8th grade, when I was still in middle school, I started working part-time at Nihon Falcom. I worked there starting in the autumn when I was in 8th grade, so around 14 years old I think? I just went there directly, about 20-30 minutes by bicycle. I worked on Xanadu, and also a PC-6001mkII version of Dragon Slayer, but it was never released."

Dragon Slayer
Dragon Slayer was one of Falcom's early commercial hits on Japanese computers — Image: Falcom

Toru Hidaka, programmer for Enix, programming lecturer

"The majority of people making games in those days lost their jobs or went out of business. I myself ended up writing programming books. No matter what job you do, it's not guaranteed to last forever. When you look back, you see it as just a brief, shining moment. The same is true of the game industry. If a company cannot survive without assistance, sooner or later it's bound to fail, just like in any other industry. The software houses we've discussed, like Bothtec, and T&E Soft, and Falcom, they all faded away. Falcom may be doing well, but they're a different company now. Kiya-san [Yoshio Kiya, Dragon Slayer creator] is no longer with them. They're still using things like monetising schemes in social games to raise profits. It's a totally different way of making money."

Kouji Yokota, artist and designer on Valis, Megami Tensei, Exile, Gaiares, ActRaiser, Soul Blazer, Illusion of Gaia, Robotrek, Lunar: Eternal Blue, and Granstream Saga

"The Showa emperor had passed away [7 January 1989]. This big funeral was held, and there was a huge discussion within the company whether there was going to be a day off for this special occasion. It turned out that we did not have a holiday! I was with Falcom until around 1991. Actually, I wanted to leave with Masaya Hashimoto and Tomoyoshi Miyazaki, when they left to form Quintet in April 1989. But I had a family, so I didn't leave with them. When those two left, obviously the company didn't like that and there were problems, with regards to them leaving. So I didn't want to go with them, because I wanted to avoid having any trouble with the company. And then Yuzo Koshiro of Ancient left.

Falcom was a conservative company, and consoles were gaining momentum rather than computers. We had this desire to do console games, but the company said no. Nintendo's cartridge ROM business was considered high risk. So the company was reluctant to follow that. Having said that, maybe they were right in not doing it, because Falcom still exists. Maybe as a management decision, they made the right one. But as a creator, I was frustrated by the company's attitude. For example, we wanted to make an action game for consoles that was similar to Ys III, but we couldn't do that. But later on, we realised these desires with ActRaiser."

Yuzo Koshiro
Yuzo Koshiro in his studio — Image: John Szczepaniak

Yuzo Koshiro, composer on Ys, Streets of Rage, and many others

"It's always the case that Falcom don't credit me. I know they don't credit me, but I don't know why. I don't know if it's because of some company reason. In terms of vinyl records or cassette tapes, or games, that were released when I was in Falcom, they did credit me. But after I left, any CDs or anything published, including games, whenever my music was used in those things, they never credited me. It was actually my mother's idea to have my name credited and displayed on the screen! <laughs> As I described, there were some difficulties with Falcom, and I think my mother had that in mind as well. I think my mother always had the idea that the composer should have rights. I think she felt the same way for games, that composers should declare their rights for the music that they compose."

Jun Nagashima, Popful Mail

"After development of Ys III ended almost all of the associated staff quit Falcom. I was alone and the section manager said, 'You're capable of programming, come up with something.' But I was the only programmer left, and I had no graphic data, so I was really at a loss. I was told to make a game but had no planner and no designer. I focused on creating a prototype by reusing existing Falcom assets, which became the basis for Popful Mail.

Popful Mail
Falcom's Popful Mail would get a western release on the Sega CD, thanks to Working Designs — Image: Falcom

After finishing development on Dinosaur, Kazunari Tomi also quit the company, without even waiting until the game's release. At Falcom, it was forbidden for programmers to insert staff credits into their games. However, Tomi-san broke this rule and inserted staff credits into Dinosaur. But since Tomi-san quit before the game's release, another programmer went in and deleted the credits.

Yoshio Kiya was Falcom's head of development, and he was effective in his role as a leader. Years later Kiya-san also left Falcom. I wondered what happened when he suddenly stopped coming in to work one day. When I heard that he had quit, I remember feeling uneasy about Falcom's future.

Many people quit Falcom around this time, and the people who left the company would often get together and go out for drinks or something. One time I was out with Tomi-san, and we had a conversation about how I was thinking of leaving Falcom. A few days later he phoned me at home, and introduced me to a game company he was acquainted with."

These standalone statements from various developers portray a company where their efforts went unappreciated. However, as one would expect when interviewing the Japanese, the answers were always polite, reserved, and reluctant to attribute blame or speak too openly. To truly get a feeling for the zeitgeist, one needs to speak with Yoshio Kiya, the legendary Falcom programmer behind the Dragon Slayer series. His creations would become Japan's biggest-selling hits of the time. He was also unafraid to answer questions bluntly.

In a three-and-a-half-hour interview for The Untold History of Japanese Game Developers, he was grilled on every aspect of Falcom. Specifically, he was asked about Xanadu which, in 1985, is reported to have sold record numbers. Did this skyrocketing success change the atmosphere at Falcom? "Kato-san's house got bigger!" replies Kiya, with a sardonic tone so dry you could almost feel the tatami mats change shape. As he would go on to describe, the dissent among staff was not an overnight phenomenon. A feeling of malcontent had slowly grown over the years.

Success would lead Masayuki Kato to take control of staff creativity. "At the time Kato-san basically wanted to make more money. He wanted to get a bonus for everything," begins Kiya. "I did not want to make Xanadu: Scenario II. But Kato-san wanted to make more money, so he told me to make it. So I felt, OK, I have no choice. And that really wasn't fun at all."

Kato's reach even extended to what names could be used, as Kiya reveals, "As far as the titles go, basically Kato-san just went and decided all of those on his own." Which is why the company had the long-running Dragon Slayer series, even though its creator, Kiya, regards them as unrelated.

The Ys series is one of the longest-running in the world of JRPGs, and continues to get new entries up to the present day — Image: Falcom

All of this might have been tolerable had workers at least been fairly compensated. We pressed Kiya on why so many staff had left. He was reticent and required coaxing. "I'm not really interested in that sort of thing," says Kiya, dismissively, not wanting to address the topic. "But there was a lot of trouble; I guess things were really busy and kind of mixed up. There was a lot of arguments over money. Some people in the development staff said that even though games were selling really well they were still getting a low salary - although Kato-san was clear about this. Everyone was surprised that even my salary was low when compared to the sales of my games. Anyway it was that sort of company."

Surprisingly, money was not the reason for Kiya's leaving. "As far as the reason why I quit, it's pretty simple," he begins. "Kato-san disliked new platforms. He wanted everything to be developed on PC-88. He'd say: 'If it's not for the PC-88 then I don't want anything to do with it!' But I wanted to work on DOS/V and then on Windows. When I told Kato-san that I was going to work on DOS/V he told me: 'OK, you've brought the company this far, and if you just want to run the company into the ground, you go ahead and work on DOS/V!' So at that point I thought, OK, this is it for me. I basically left because of that. I feel that computers and technology like that keep evolving, and Kato-san was really scared of these new technologies."

The staff made really big hits, however Kato did not provide any kickback from these hits towards their salaries. So lots of staff complained

Given all the negativity expressed so far, it's only fair to convey the other side of these arguments. At the start, we described how long-lived Falcom has been. Despite the mass walkout, it was able to recover and grow strong. According to Hiromasa Iwasaki, programmer on the PC Engine CD-ROM remake of Ys I & II, the thrifty nature of Masayuki Kato may actually have benefited Falcom.

"Falcom didn't have the resources for development," begins Iwasaki, explaining why neither version of Ys IV, on SNES and PCE-CD, was by Falcom itself. "Almost all the programmers and artists had quit because the company's president was not good. I think Kato was a good president, but Kato was a good president for the company; Kato was not a good president for staff. He kept their salaries too low. The staff made really big hits, however Kato did not provide any kickback from these hits towards their salaries. So lots of staff complained. Kato was not a good president for maintaining staff motivation. So almost all the old staff left - almost all of Falcom's first, really good creators left."

Some also recall Masayuki Kato fondly on a personal level, and as more than just a colleague. "I'm still friends with that guy, by the way," says Henk Rogers (Black Onyx creator, founder of Bullet Proof Software and the man who was instrumental in getting Tetris on the Game Boy), warmly. "Kato-san. Former president of Falcom. We had an organisation called STAC - Software Technology And Communication. It was software companies, sort of a who's who of the early computer game industry. Then within STAC we had several groups: we had SST, which stood for Super Software Team, which is the Tokyo group. We joined to fight against software rental and piracy. We started doing everything as a bloc. And we used to get together once a month. So we would have a meeting, where we discuss issues, and then we would go out and have dinner, and then we would chase girls. < laughs> It was wild... <laughs> Oh yeah! Perhaps let me put it this way: we were banned from a Nagoya hotel. <laughs>"

The 'Trails' series is another Falcom property which has managed to secure a foothold in the west — Image: Falcom

We laugh, expressing awe at the party atmosphere of the 1980s, hoping for Rogers to tell us more, but not wanting to seem overly keen. Rogers does not disappoint.

"We were doubling up in the rooms at the time, meaning two guys to a room. And when the girls came in, one of us would have to wait out in the hallway for the other one to get on with it, so to speak. And the guys in the hallway were all getting drunk and saying... Lewd things to the other hotel guests. <laughs> And a number of us became kyoudai. You know what kyoudai is in Japan? The word means siblings, but there's another use for this word, and it's if two guys sleep with the same girl they become 'kyoudai'. So a number of STAC members became kyoudai. <laughs>"

We laugh again at the anecdote, impressed at the rockstar lifestyle the company presidents were able to live. But we wanted to be sure, was Rogers alright about us publishing this? "Well, as long as I'm not mentioning anyone's names," he replies.

Was Masayuki Kato a member of the "kyoudai club" along with the presidents of Square, Game Arts, Bothtec, Sacom, and the rest of SST and STAC? We may never know. Whatever happened in STAC stays in STAC, and Rogers is not mentioning any names.

Whatever people may say about Masayuki Kato, as polarising as he may have been, he was a powerful force and the reason we have Falcom in the first place. It's also worth noting that the modern-day iteration of Falcom is a very different beast to that of the '80s; current president Toshihiro Kondo runs a steady ship, and the company has grown in strength and stature in recent years, finally achieving a consistent level of commercial fame and fortune in the west.

Even so, when you're playing the latest Ys or any other recent Falcom game, remember the legacy of exploited proletariats who helped forge the path for today.

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