Some thoughts on localization: Regardless of how the word is used within gamer communities, the term "localization" is used interchangeably with "translation" within the industry. If someone hires you to localize a game, they mean they want you to translate it and vice versa.
Of course, approaches to loc/translation vary depending on who is doing it, for what company, on what game. So here are some things I take into consideration:
1. Style guide. If I'm hired by a company, the number 1 thing that will guide my decisions is the style guide they provide. Sometimes they will specify they want you to change things that could be considered offensive, other times they will ask you to retain cultural references.
2. If there is no style guide, I will discuss with the rest of the team how to approach the text and come to a decision. Or if I'm the sole person working on it, I'll ask myself a few questions.
These questions include "Who is this being marketed to?" If the answer is a general audience who may be unfamiliar with Japanese cultural norms, then I will probably remove honorifics and change certain references so that an average English reader can have an experience...
...equivalent to that of a Japanese reader. i.e. they won't need to look up references, and can just enjoy the game or text. This doesn't mean you're betraying the original, it's just an approach that prioritizes creating an equivalent experience in the target language.
However, if it's something that relies heavily on a specific aspect of "Japaneseness" and that aspect is something that will be familiar to the target audience I might leave it in. For example, I always translate "onii-chan" for a general audience.
However, for something like Chinkamo Twins we kept "onii-chan" because the game is targeted to a niche audience, and it caters to a specific fetish.
The decisions I make are motivated by thinking "what would create the most enjoyable experience for the audience who will be consuming the product" along with "how do I keep it an equivalent experience in English to how the Japanese audience experienced it."
Yes, games are art, but they are also commercial products. This isn't academia. If there's a reference in the Japanese that would stand out oddly in the English, for example negatively commenting on dark skin, I'm going to change it because the original intent isn't to be racist.
Leaving it in actually changes the intention of the text. (ofc, if a character is supposed to be racist, it'll stay in). And that's not a political decision, it's just a logical decision in terms of translation ethos and commercial viability.
This thread got kinda rambly; twitter really isn't a good platform for more detailed discussions. But I just wanted to give some insight into the very basic levels of decision making that exist when starting work on a project.
Like we don't just sit down and go "HAHA CAN'T WAIT TO INJECT MY WOKE POLITICS INTO THIS GAME" like some people seem to think :/ Questionable decisions will sometimes be made because we're all varied human beings, but I promise you there's no conspiracy.
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