The Future of Japan’s Mainstream Gaming Companies
The gaming market in Japan, particularly social gaming, is especially lucrative. However, the peculiarities that make this market attractive also make it harder to predict.
An overview of the actual state of gaming in Japan:
Japan has a social networking culture that is unique to its own culture. Both real and virtual identity social networks have gained prominence as ways to spread news, games and interaction. Japan’s social networking structure is intriguingly dominated by three very large domestic networks, each with its own particular market and clearly-delineated goal. These are:
- Mobage - Mostly about mobile social gaming and its users take on virtual identities to access content.
- Mixi - The largest real identity social network in Japan. About 80% of Mixi users are members. Its closest Western equivalent is Facebook, which has recently overtaken Mixi in the Japanese market.
- GREE - Like Mobage, GREE is also focused on mobile social games and allows users to take on virtual identities
There are some aspects of the Japanese social gaming industry today that sound completely alien to outsiders. For example, the industry structure is quite fragmented, including hundreds of providers of social apps. Two companies provide both social games and platforms, DeNA and GREE. Imagine a Western company that combined Facebook and Zynga (which has since closed its offices in Japan).
These companies’ stocks have a bright future as they hold something of a monopoly over local social gaming, with the only successful foreign gaming company in Japan being Reekoo.
Possible threats on the horizon
There are, however, several potential threats to the big players. The most widely publicized is the increasing government regulation of social gaming. In recent years, attention has been cast on the gambling-like aspects of Japanese social gaming. Other problems include games financially abusing the addictions of users. Known as kompu gacha, these practices involved using micro transactions to milk consumers out of their money.
The rise of Western social media companies in Japan is also a threat. While Twitter gained almost immediate acceptance in Japan, Facebook was an underdog for several years. However, it is booming now and experts predict that it’s market share will continue to rise. Successful incursions by other international companies may finally open up the Japanese social gaming market. For now, though, these threats are not particularly strong as GREE and DeNA have adeptly adapted to the fluctuating demands of their Japanese customers.
Be Part of Our Cloud Conversation
Our articles are written to provide you with tools and information to meet your IT and cloud solution needs. Join us on Facebook and Twitter.
About the Guest Author:
Nida Rasheed is a freelance writer and owner of an outsourcing company, Nida often finds herself wanting to write about the subjects that are closest to her heart. She lives in Islamabad, Pakistan and can be found on Twitter @nidarasheed.
