Hawai'i resident Hironobu Sakaguchi is hoping for another hit video game with yesterday's U.S. release of "Lost Odyssey" by Microsoft Game Studios for the Xbox 360 system.

The game, developed by Sakaguchi's Mistwalker Inc. and Japan-based feelplus Inc., debuted yesterday in such chains as GameStop, Target, Wal-Mart and other retailers that sell Xbox video game systems. It retails for $60.

The game has been anticipated by people who follow Sakaguchi, an icon in Japanese video gaming circles for his role-playing game, "Final Fantasy."

Sakaguchi, who moved to Hawai'i from Japan in the late 1990s, was sought out by Microsoft to develop games as it tries to gain marketshare for its Xbox 360 in Japan, where Sony Corp.'s PlayStation has dominated the market but is being challenged by Nintendo's Wii game player.

Sakaguchi is the "god of role-playing games in Japan," said Roy Sato, a Hawai'i resident who served as the visual director for "Lost Odyssey."

Sakaguchi, backed by Microsoft Game Studio money, conceived the story line with Japanese novelist Kiyoshi Shigematsu and helped oversee production of the game, most of which was done in Japan. Mistwalker maintains a small office here that acts as a liaison between Microsoft and its Japanese operations and feelplus production workers.

Sakaguchi is perhaps best known locally for establishing a branch of his Square Co. gaming firm here in the mid-1990s. He went on to produce the computer-animated movie "Final Fantasy: The Spirits Within" in 2001 but later left Square Co.

Two years ago, Microsoft hired Sakaguchi to produce two games, saying it had lacked role-playing games that are popular with Japanese gamers. More than 60 million copies of "Final Fantasy" have been sold.

Sato said the first of the games by Mistwalker, "Blue Dragon," has exceeded Japanese sales expectations since being introduced last year. "Lost Odyssey" was introduced to Japanese gamers in January.

The game follows the story of Kaim, an immortal soul who has lived more than 1,000 years. The game follows Kaim's life as he lives through generations and families, has conflicts and falls in and out of love.

John Strom, vice president and director of business development and technology for Enterprise Honolulu, said Sakaguchi is part of an active gaming-development community here that includes people working for gaming giants such as Electronic Arts and Rockstar games.

He said several hundred people here are involved in the industry, which is now bigger than the film business. People here include graphic artists, coders, writers and others who contribute to the production work.

"It's a growing area," Strom said, noting people can sometimes work virtually from anywhere in the world and don't need to be at the company's offices. "This is the kind of industry where I'm sure half of the people work out of their homes and not in an office."

Mistwalker said Sakaguchi travels between Japan and Hawai'i frequently as he directs development of games. Sato said Mistwalker's continuing to work on other games, including one for Nintendo.

Bloomberg News Service contributed to this report.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.