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. This is especially interesting when we consider that DeNA and GREE use multiple platforms for their products. For example, GREE has browser-based products, which are among the most common in Japan for Japanese feature phones. However, it also has iOS and Android apps and browser-based games for multiple smartphones.
Why these companies avoid Western app and game 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. It also helps that Japanese iPhone users can even pay for games and other services directly through their carrier. This effort is worth it since the thirty percent tax Apple and Google charge applies over the revenue every one of their games and apps generates during its entire run! This kind of distribution strategy actually works well in Japan. The main advantages of this hybrid distribution model are:
- 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, a clear step in taking their hybrid distribution model outside of Japan. Although this may be part of an attempt of avoiding going through the Apple and Google distribution models, it may not prove successful for these companies when trying to reach an international market. Some market experts have expressed skepticism about this move,
considering that HTML5 is not at a stage where it is practical or ready for gaming. Some of the most popular mobile games today require native apps due to the fact that a browser-based model simply cannot support them. In fact, in Japan the newest games are only in app form while those using browser based gaming are from previous generations rather than using cutting edge technology.
Why this hybrid distribution strategy may not work well outside of Japan
Many of the advantages for customers that apply in Japan may not be available on the international market if companies attempt to adopt this hybrid distribution strategy. One of the main obstacles that they would have to overcome is the fact that they came very late in the market. Although these companies promote the convenience of being able to pay for games through mobile carriers, most gamers outside of Japan are already accustomed to paying using the iPhone App Market or Google Play and consider it the most convenient and easy to manage option. These two companies already have millions of users and their credit card information in their files. In fact, Google already allows many of their customers to pay for their apps through their carrier in various markets such as the United States and Japan itself.
One of the main disadvantages for gaming companies wanting to use this hybrid model outside of Japan is that it means creating two versions of games when a single one can work. After all, it requires developing both an app version and a browser version of popular games. History is also not on their side. Despite the fact that this hybrid distribution strategy is 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. It is also worthwhile to note that this move toward a hybrid distribution model draws unwanted attention from Apple and Google. By not recommending games using this model they are closing off millions of potential customers while at the same time making it more difficult for companies wanting to adopt this model to establish their hybrid distribution strategy successfully. It is important, though, to note that Western social gaming companies wanting to break into the Japanese market should be aware of the existence and advantages 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.
