‘Resident Evil’ Producer Who Clashed With Capcom Says More Disputes Loom

The producer behind the zombie- fighting “Resident Evil” games who left Capcom Co. after clashing with management said more developers are likely to face similar disputes as social games upend the industry.

“In this industry, it’s often the creators who have the eye for potential hits but they’re not the ones deciding what gets published,” Keiji Inafune, who left as head of research and development of Capcom in November, said in an interview last week in Tokyo. “We’ll see many more clashes as creator- management divides widen.”

Difficulty retaining talent would add to the pressure for traditional video-game publishers, led by Electronic Arts Inc. (ERTS) and Activision Blizzard Inc. (ATVI), which face rising production costs and competition from companies churning out $1 games on smartphones and free ones on social networks. Inafune said companies that include creators in decision-making will be better positioned to weather the challenges.

As game budgets climb into millions of dollars and production times stretch into years, video game publishers have become more risk-averse, preferring to rely on aging franchises, said Inafune, who’s started two game companies since leaving Capcom. Such shortsightedness may cause industry leaders to fall behind social game upstarts such as Zynga Inc., Facebook Inc.’s biggest game operator, he said.

‘Street Fighter,’ ‘Mega Man’

Inafune, 46, helped create some of the most popular game franchises of the last 30 years, including “Street Fighter” and “Mega Man.” His “Lost Planet” and “Dead Rising” series sold more than 9 million units worldwide, according to Capcom data.

Inafune said he quit Capcom because the board kept him out of the decision-making process.

“There is no need to dwell on the past,” said Ryosuke Tanaka, a spokesman at Osaka-based Capcom. “The company has moved on to working on future growth strategy, creating a new development organization and managerial structure.”

Inafune said he plans to release a social game title for Japanese market as early as this month and a role-playing title for Sony Corp. (6758)’s PlayStation 3 in August.

Games played on social networks are free, with publishers charging for virtual goods that help players advance to higher levels. Console video games such as Activision’s “Call of Duty” shooter cost as much as $60 for a title, with additional revenue from downloadable maps, weapons and other contents.

Major publishers have struggled to gain a foothold in the market for games on social networks, which more than doubled to $1.4 billion last year, according to researcher IHS Inc.’s ISuppli.

To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net.

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.

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