We’re continuing our series called #KnowYourMarket, where we will be exploring the various countries and their mobile gaming community, their significant growth, and unique cultural distinctions so game developers get at least a basic understanding of the mobile gaming market in a diverse space like Asia. In knowing this, game developers and publishers will be more equipped and attuned to making calculated decisions when interacting with the various demographics that will discover their games.
For the past few blogs in this series, we covered the mobile gaming market in Indonesia, India, the Philippines, Singapore, Malaysia, Thailand, Vietnam, and South Korea. Today, we venture into the Land of the Rising Sun, Japan!
Japan is an island country located in East Asia, in the Pacific Ocean. It comprises four main islands, Hokkaido, Honshu, Shikoku, and Kyushu, as well as numerous smaller islands. It is home to a population of over 126 million people, its largest city Tokyo currently has 37 million residents. It is one of the most urbanized and technologically advanced countries in Asia. Japan is a constitutional monarchy with an emperor who serves as a ceremonial figurehead, and a prime minister who leads the government. Japanese is the de facto official language and the most widely spoken language in the country.
The Japanese Gaming Market
When it comes to gaming, there is perhaps no country with a reputation as strong as Japan’s. This market holds a special place in the games industry’s history. Japan is currently the third largest gaming market in the world, with an average value of 20 billion USD over the last three years. Japanese game companies spearheaded the global growth of gaming as a source of entertainment. It’s the home of many of the leading console platform holders over the decades: Nintendo, SEGA, and Sony. They continued to lead in the area with these companies, whose renowned game consoles have been consistently popular among gamers around the world. The game franchises created by these companies such as Mario, the Legend of Zelda series, and Final Fantasy are considered to be classics and are lauded for their innovation in design, as well as the strong emphasis on character development and storytelling. It’s also birthed acclaimed global franchises such as Mario, Metal Gear, Pokémon, and Resident Evil to name just a few.
Japan was the birthplace of non-preset mobile games. As early as 1999, mobile phone users in Japan could download games – like Dragon Quest and Final Fantasy – via the NTT DOCOMO platform. Today, Japan remains on the cutting edge of the mobile gaming industry.
Impressively, Japanese publishers continue to maintain a hold over the local app stores when it comes to player spending. From 2016 to 2020, eight of the top 10 revenue-generating mobile games in Japan were from Japanese publishers, with seven of those accumulating more than $1 billion in that time.
Studies on gaming trends in Japan have shown that mobile gaming is quickly rising in popularity, overtaking console-based gaming. Mobile phones are currently the most prominent gaming platform in the country in terms of the number of players as well as revenue. The dominance of Japanese publishers in their local market holds extra significance when taking into account that the country has one of the world’s most lucrative mobile games markets in the world.
The Japanese Mobile Gaming Industry
Statistics have shown that the mobile gaming industry alone is worth 12 billion USD, which is more than half the value of the overall gaming market in Japan. The growth rate of mobile gaming was shown to be particularly high during the year 2021 during the pandemic but seemed to slow down by the next year. Many have speculated that this may result from a return to almost pre-pandemic living situations.
According to surveys conducted on smartphone game players, 65% of the participants admitted to playing games on their phones every day, while 92% identified as playing at least once a week. Japanese gamers seem to spend a lot of money on mobile gaming compared to their foreign counterparts; the average revenue per user (ARPU) in Japan in the past three years has crossed 300 USD per year, with projections for the next two years predicting that this figure could go as high as 540 USD by the year 2026.
Most mobile gamers are within the 35 to 44 age range, comprising 33% of the market, while younger adults between 25 and 34 make up nearly 29%. Older adults seem to enjoy gaming on their phones as a pastime while on their commute to and from work on a daily basis.
Foreign game developers often face a language barrier when releasing their content into the Japanese market. Most tend to rely on translations of their game content in order to make it more viable for the Japanese audience, along with making other changes to fit the nuances and societal expectations that come with Japanese culture. When it comes to Japan, developers and publishers need to consider high-quality localization, as this is very much in demand with its player base.
In fact, game developers in Japan are willing to pay an insane amount on both installs (sometimes $10-$20 per install) and potentially millions of dollars on non-mobile traditional advertising (like TV or billboards). New mobile games often launch with television ad campaigns and other advertising leading up to the launch. Because users consume games so avidly, every game has to have a lot of content and/or levels or players will “finish” it and leave forever. Also, in Japan, customer service for mobile games is very high touch, with many companies offering phone support and online communities.
And that concludes part nine of our #KnowYourMarket series! Tune in to the final coverage of this series: China!
Are you a Japanese mobile game developer? Tell us about your experience developing your game in your market! Use #KnowYourMarketSlab in social media or tag slab in your post! We’d love to know your story working in one of the largest gaming markets in the world.