Hybrid Distribution Strategy Of Japan’s Social Gaming Companies
The two main social gaming companies in Japan, GREE and DeNA, use a hybrid app and browser distribution strategy that allows them to avoid the popular app stores, but using multiple platforms for their products. For example, GREE has browser-based products, among the most common for Japanese feature phones. iOS and Android apps and browser-based games also exist for multiple smartphones.
Avoiding Western distribution methods
Why do Japanese social gaming companies avoid the iPhone App Store and Google Play for their distribution strategies? The main reason is the thirty percent cut that Google and Apple take on all app sales… plus subsequent revenue! Japanese iPhone users can pay for games and other services directly through their carrier. This kind of distribution strategy works well in Japan, the main advantages being:
- Avoiding profit cuts from third party distributors.
- Easier porting from one generation to another, allowing companies to bring back games that were a hit on older phones.
- Browser based products allow easier cross platform gaming.
However, these companies have avoided using web-based distribution outside of Japan… until now. GREE recently announced that they will expand their platform’s compatibility with HTML5. This attempt to avoid going through Apple and Google distribution may not, however, prove successful in the international market. Some market experts have expressed skepticism about this move, considering that HTML5 is not yet practical or ready for gaming. Some of the most popular mobile games today require native apps, as a browser-based model simply cannot support them. In Japan, the newest games are only in app form while those using browser based gaming are from previous generations.
Hybrid distribution outside of Japan?
Many of the hybrid advantages for customers in Japan may not be available on the international market. Late entry will not help them. Although these companies promote the convenience of paying for games through mobile carriers, most gamers outside of Japan are already accustomed to paying via the iPhone App Market or Google Play. These two companies already have millions of users and credit card profiles in their files. In fact, Google already allows customers to pay for apps through their carrier in the US and Japan itself.
One of the main disadvantages of the hybrid gaming model outside of Japan is that it means creating two versions of games when a single one can work. It requires developing both an app and browser version of popular games. Despite the hybrid distribution strategy being highly effective in Japan, no mobile gaming platform has been able to make a dent in Apple and Google’s absolute domination of the market.
The fact that Japanese social gaming companies have also been slow to integrate Western social media networks into their platforms also works against them. Moves toward a hybrid distribution model also draw unwanted attention from Apple and Google. By not recommending games using this model they are closing off millions of potential customers while making it more difficult for companies to establish their hybrid distribution strategy. Western social gaming companies wanting to break into the Japanese market should be aware of this unique distribution model in Japan.
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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.
