I've seen them in the game too on occasion. Considering had badly Japan needed these cheap escorts they sure took their time getting them out of the shipyards.
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It was soon realized that Type C’s production schedule of between three and six months would outpace Japan’s ability to build diesel engines for them. A new Type "D" kaikoban was designed that would be powered by a turbine engine. 143 Type D’s were ordered and construction began in October 1943. In 1944, construction of most units were suspended and others cancelled to permit construction of KORYU submarines and KAITEN human torpedoes.
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Even this late in the war Japan had it's production priorties screwed up. The vast majority of those midget subs were never used.