Valhalla Game Studios founder Tomonobu Itagaki is at an interesting crossroads in his career. After building his legacy with the Dead or Alive fighting series and Ninja Gaiden, in the last three years he left Tecmo, started a new development company, and began work on a new THQ-backed project that both hope will break into the hyper-competitive shooter market. His situation is now complicated with his primary funder facing a potential NASDAQ delisting as it struggles to get its financial house in order. If these issues are weighing on Itagaki's mind, he wasn't showing it at D.I.C.E. When we sat down with him, he shrugged off any worries he has over his current project, talked about what differentiates Eastern and Western publishers, and spoke to the challenges facing the next generation of hardware.

THQ has been in the news a lot recently with its financial troubles. Where are you guys at with your relationship to THQ – have they given you assurances that Devil’s Third is safe?
Of course there are some changes but there is no problem. It’s the same as before.

The Devil's Third has been dark for a while now, with only a couple trailers on your website. How far along is the project and when can we expect to see some new info, screenshots, or video?
Right now we think it’s too early. 

Is the game still slated for a 2013 release? 
Yes.

Now that you’ve been working with THQ for a couple years, what are the differences with working with a Western publisher and an Eastern one?
We’ve been working with THQ for two and a half years, and when I was working in Japan I was at the publisher myself so I can’t really compare because it’s different. The circumstances are very different. I really understand what the publisher thinks because I used to be the publisher myself. The one thing that's completely different between the Eastern publisher and Western publisher is the budget. I’ve made more than 30 games, and if you put a little bit more [money] into the one I’m making now, Devil’s Third, I could make all of the 30 games I made before. That’s the big difference. The budget you use for the promotion is completely different too. Those are the biggest differences. 

Do you by extension think the Eastern market is struggling because Japanese publishers are not investing enough money in the creative process?
It’s not a matter of difficulty, it’s just the only scale that they can manage to do.

Do you think this plays into why so many well-known Japanese developers like Sakaguchi, Inafune, and Mikami left their Japanese publishers and in some cases have embraced partnerships with Western publishers?
Mr. Inafune is still working with the Japanese. Mr. Sakaguchi is still working with the Japanese, too. And Mr. Mikami is working with Sega and EA too. Only Itagaki is only working with a Western publisher. The reasons they left their Japanese publishers are different. I can’t speak generally about them. I don’t want to categorize them, but I can talk about the reasons they left. The reason Sakaguchi quit working with Square was because the movie [Final Fantasy: The Spirits Within –Ed.] failed. The reason Inafune left [Capcom] was because there was a fight. The reason Mikami left [Capcom] was rather vague. It’s not simple to explain. The main reason was he had a political fight within the company, too, and he was forced to leave the company.

We’ve seen a resurgence of difficult games – Demon’s Souls and Dark Souls in particular, which reviewed very well. It seems like there is an appetite for difficult games again, where maybe there wasn’t eight years ago when you released Ninja Gaiden. What’s your take on the difficulty in games today – are hard games coming back or is it the same in your mind?
I think games have become much easier than before. After 10 years or 50 years it’s going to be different. The games are going to change much more. Maybe people who used to play the NES may think the games now are really easy, but that is only what they think. The generation now feels like they are not that easy – this is the norm. It’s really important to make games that fit the time, that fits what people now want.

Are you having difficulty balancing Devil’s Third in making it hard or not too hard?
I’m making it not too easy or not too difficult to help as many people as possible to play the game. That’s what I want. I always set up a wide range of difficulty.

With Call of Duty, Battlefield, Rainbow Six, Ghost Recon, etc., the military shooter genre is overcrowded right now. What is the Devil’s Third going to bring to the table to help it stand out?
It’s going to be a more physical game. Those games you mentioned are specifically about playing and fighting with guns. The close quarters combat is not so good. It doesn’t look that great. 

Are you working with a military consultant like the Battlefield and Call of Duty studios do to make sure you’re adhering to realism?
I have friends working in the Japanese army so I can always ask them. Of course you can’t shoot guns in Japan so I can’t do it myself, but I know about it and I have many friends in America too who I can ask about it. My friend is a mercenary. 

How are you approaching gun design? Are you going to shooting ranges to get the feel for how different weapons handle when you are stateside or are you less worried about guns handling realistically?
If you don’t have any experience shooting guns and you are making a shooter, that’s going to be awkward. I have had many experiences shooting guns. I have a friend who works in the LAPD. He takes me to their shooting range. It’s a very good place. [Laughs]

With contemporary shooters, the single-player campaign often takes the backseat to the competitive multiplayer mode.  Is that a space you plan to compete at the highest level in as well or are you primarily focused on a story-driven experience?
Both. We have to compete on both sides. I don’t like excuses. This is my first challenge with the shooter genre, so I set out to include all of the features of a shooter. 

One of the biggest challenges with breaking into this genre is building a network from scratch that can handle party matchmaking, team voice chat, and progression smoothly – elements even some of the best shooters still struggle with. Is that something THQ is assisting you with or are you personally handling this task to reach the level gamers expect?
Do you forget that I am the first developer who succeeded to make an online 3D fighter? I am a professional at building a network. Of course THQ has given us assistance, but mainly our network systems were made by my staff. 

One of the big debates entrenched fans have about Call of Duty and Battlefield is frames per second. Call of Duty runs at 60 fps, but Battlefield runs at 30 fps to accommodate a larger scale battle. Where does Devil’s Third fall in this spectrum? Do you think it even matters?
My game runs at 30. Our graphics engine can draw very beautiful images at 30 frames per second like the Battlefield series.

Are you running into any hardware limitations with the Xbox 360 and PS3? Are you looking forward to the next generation of consoles?
If I didn’t have any knowledge of the economy, or if I were young, I'd want to release my game on the new platform. The decision I’m making now is that, if I released my next game on a next-gen console or if someone releases a next gen console, then all the publishers developers and players will be so confused and everything will be messed up because of the economical situation. The U.S. economy is bad. The EU economy is bad. The Japanese economy is bad. This is not good timing for the release of a next-generation console. This is just not for the game industry. I can say the same for customers. 

You’ve obviously held a lofty status in the Japanese game development. Are there any up and coming developers or studios you think people should be on the lookout for?
I have many friends, and I have many friends I think will be great. For example, Ryutaro Ichimura at Square Enix. There are a lot.

What was the last great game that you played? 
I can’t remember which order I played, so I can’t remember the latest one. Probably Call of Duty: Modern Warfare 2. That was very fun. 

How do you see action games improving in the next five to 10 years?
Now the genres are separated between action and shooter – it’s not the same. I think it’s going to be mixed. The one I’m making now, Devil’s Third, is like a mixed game, and I think it’s going to be like that. Future games are going to mix shooters and action.