Japan remains the world’s third largest economy, even with a global financial crisis coming on the heels of a Japanese recession, it has survived mainly through an export-oriented economy. With a worldwide slowdown in sales of consumer electronics, Japan is already feeling the pinch. There is, however, a nascent industry which is slowly getting exported. Popular mobile games portals are now trying to sell their social games outside of Japan.
From one viewpoint, there is the sense of the inevitable in this. Every so often, Japanese products have leaked out to the rest of the world. With cell phones, smaller Japanese manufacturers have been testing the market since the late 1990s. Besides Sony, other electronics manufacturers both big and small have tried to export their basic phone models. Manufacturers like Sharp, Kyocera, and Sendo have tested the foreign waters. Their only failure was that they were too busy selling feature phones in their homeland and the only ones which could be exported were the basic or entry-level models.
This time, it’s the software and game developers who are slowly showing off their wares outside of Japan. Traditionally, games have only been successful when these were released in conjunction with a console or game platform. This time, it’s the distribution channel which is bringing the games to the West. The two largest mobile game platforms, Gree and DeNA are expanding their market, and stepping out on to the West.
This is a big step for Japanese mobile games like Japan-specific social games and card battle games. This is also a big signal for Western game developers to get into Japan, these are convenient times because the likes of GMO Cloud are now offering market entry services that include marketing and localization. Because unlike the traditional mobile games, the newer titles are all mostly Android and iOS games. This makes it easier for Japanese developers to be able to penetrate the Western games market. Whereas before, social games were made for feature phones, games and apps on Android and iOS don’t need to be ported to another phone in order to be sold abroad. In fact, Western players have been playing un-translated games since the 1970s.
The growth in the Japanese social game market is even more phenomenal than the rest of the world. It has grown to an estimate $4.36 billion revenue from practically nothing just a few years ago. The income growth showed a ten-fold increase in the last three years.
Some of the more popular card-battle games are not represented as mobile phone apps. Console games are still a large market, with upfront sales directly translating to game revenues. However, mobile phone games are usually free downloads and free-to-play but with in-game merchandise and level ups which can be purchased with real cash. This type of monetization is common for a lot of other games. It just so happens that Gree and DeNA, along with other Japanese games and channels make more money out of their games compared with western game companies.
The export of Japanese games do not necessarily mean that the Japanese market is saturated to the point that new developers cannot get in. On the contrary, the continued exponential increase in the market is a sign that new game companies are welcome. It can even be said that the new game companies can help fuel the growth even further with newer game genres and titles.
This bi-directional flow can be wholly attributed to the success of Android and iOS devices. Apple has an aggregate market share of around 32% of the Japanese market. There are more Android devices, however, since there are more Android manufacturers, these companies have a lower percentage market share. Either way, mobile apps and games are on the increase and, for now, there is no way to predict when the bubble would burst.
It seems that the reason that the mobile apps and game market continues to grow is because there is no alternative in the horizon. Phone apps will continue to grow until a new device comes along. So far, iOS and Android devices have overturned the Japanese smart phone apps market due to sheer numbers. This is a positive feedback mechanism where the large number of apps is fueling the sales of smart phones.
Going back to established IP titles, it is only a matter of time before most of them would migrate to Android and iOS apps. One of the most popular card-battle games is Pokemon. It was introduced in 1996, and since then other card sets have been released, and these have helped push newer models of Nintendo game consoles. However, Pokemon is yet to be ported to the Android or to iOS. Like a lot of other console games, there is a need to change the monetization before these games are introduced or relaunched as smart phone apps. There is the fear that once these titles are released as smart phone apps, the sales of game consoles would decrease dramatically.
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About the Guest Author:
Rodolfo Lentejas, Jr. is a fulltime freelance writer based in Toronto. He is the founder of the PostSckrippt, a growing online writing business dedicated to producing top quality, original and fresh content. To know more about him, please visit www.postsckrippt.ca. Like him on Facebook or follow him on Twitter, Google+ and Pinterest.