Squaresoft was on fire in the late '90s. Flush from the success of Final Fantasy 7, which sold almost two million copies in a single day in Japan, the publisher was enjoying a period of wild creativity and experimentation on the original PlayStation. It threw money at all manner of weird, wonderful games, such as stylish survival horror Parasite Eve, sci-fi dungeon crawler Cyber Org, arena brawler Ehrgeiz, shapeshifting platformer Threads of Fate, action RPG Brave Fencer Musashi, and Final Fantasy spin-off Chocobo Racing.
But the most interesting game from this period has to be Racing Lagoon. Released exclusively in Japan in the summer of 1999, this Square deep cut is an imaginative fusion of racing and role-playing. In the '80s and '90s, illegal street racing was a way of life for law-flaunting car enthusiasts in Japan—including members of the notorious Mid Night Club. These groups would organise high-speed races along the Shuto Expressway, which runs between Tokyo and Yokohama, and it's this subculture that inspired Racing Lagoon.
You play as Sho Akasaki, a young street racer and the newest member of Yokohama's Bay Lagoon Racing Team. In a nod to classic racing manga/anime series Initial D, Akasaki starts the game driving a black-and-white 86-LEV—which is an obvious homage to the Toyota Corolla Levin driven by Takumi Fujiwara. The cars in Racing Lagoon are almost identical to their real-life counterparts, but with copyright-swerving fictional names. The Seven-RX is clearly a Mazda RX-7, and the Celine is blatantly a Toyota Celica.
As a racing game, it's pretty basic. The cars feel nice enough to drive, but compared to other PlayStation racers like Gran Turismo 2 and the peerless Ridge Racer Type 4, there's little room for mastery. This is the result of its developer, the evocatively named Square Product Development Division 2, having no experience in the genre, having previously only worked on the SaGa Frontier RPG series. But what makes Racing Lagoon special, despite its shallow driving model, is how its street races are underpinned by some clever RPG systems.
Between races you can freely explore the streets of Yokohama, which is essentially Racing Lagoon's equivalent of a Final Fantasy world map, complete with random battles. Bump into another driver on the road and you'll trigger a street race. Beat them and you win part of their car, whether it's the wheels, engine, brakes, paint job, or even the entire body. This is the core of progression in Racing Lagoon—beating rivals in races and creating your own automotive Frankenstein's monster with the parts you win from them.
It's amazing how well the traditional structure of a JRPG translates to a racing game, to the point where I'm amazed more developers haven't riffed on the concept. Modern racing games like Forza Horizon and The Crew feature light RPG elements, but they're still driving games first and foremost. Racing Lagoon is as much about drama, character progression, and being in a world as it is driving fast cars—which makes it, even today, a totally unique experience. If there was any justice, the 'car-PG' would be a thriving genre today.
Racing Lagoon never made it to other territories, and remained unlocalised until a recent finally translated it into English. It didn't review especially well in Japan when it launched, receiving an underwhelming 21/40 rating from Famitsu, and sold only around 140,000 copies. So it's perhaps understandable that Square didn't think it had any sales potential overseas. It's ultimately an average driving game attached to a so-so RPG, but a fine example of when the publisher was at its creative peak at the turn of the millennium.
