Get a Grip on Japan’s Gaming Market

There’s a Lot to Think About

We speak with a lot of gaming companies - mostly UK, Scandinavia, and North America right now if we’re being open about it - about potentials for entering Japan’s domestic gaming market, either with existing product or with the intent to build something.

And you know what? It’s not that easy, and it’ll certainly cost you. The fact is, Japan’s a pretty hard nut to crack, given its predilection to buck international trends, considerable but not absolute preference for local products, and operational nuances that aren’t so easy to grasp for the uninitiated. 

But it’s also not impossible, just something that needs to be done with consideration and, let’s be honest, a pretty sizable budget. So, realistically speaking, indie game developers are likely going to face an uphill battle in order to gain ground here in any reasonable timeframe, but established developers with the warchest to back them could feasibly make a splash.

Anecdotal Evidence

Recently, there’ve been some pretty successful entries to the market made by both China (Genshin Impact) and South Korea (we wrote about this recently), and we’re glad to see this as it tells us that we’re not crazy. These are big budget games, though, and would like to see this fledgling push towards a more dynamic market in Japan’s gaming ecosystem take flight.

Which presents us with an opportunity, as an organization that likes the idea of introducing a bit more spice to the local scene. There’s a relatively prominent narrative out there which downplays the challenges associated with Japanese market entry, such that enough organizations approach us or others with an unrealistic expectation. This is something we’d like to contribute positively to rectifying, because we don’t like false hope.

So below is some advice we’re happy to offer any and all who are even just beginning to consider what attempting to enter Japan’s domestic gaming market could look like. Hope it helps!

Establish a Local Presence

Even just gaming on the street works.

In order to successfully navigate the Japanese market, you need to… know the Japanese market. It’s this kind of tautological truth that really seems to confuse some organizations, and that’s fair: some markets are globalized enough that the exchange between geographic and cultural boundaries is seen as totally normal.

Japan is not a globalized market, and is in fact quite isolated and protectionist. That might sound scary at first - and, I mean, I guess it kind of should in order to set your expectations - but really all it means is that you need to do your research and make an effort to get in with the right people in the right manner. 

So, for one, you’ll need to develop relationships. There are a few ways to do this, but one is as simple as making business trips over here to visit identified individuals and organizations of interest. Another is to join a business organization like the American Chamber of Commerce in Japan, the Rotary Club, or Creative Tokyo and seek connections through them. Another is to hang out at places like Bitsummit or Tokyo Game Show.

Once you do that, you’ll also need an office. Staff. A Business license and bank accounts. And all of the other accouterments of a properly established business. We wouldn’t recommend doing that hastily, but however you choose to do it, establishing a local presence in Japan is key to success in the Japanese gaming market.

Research the Market

DIY or not, you need insights.

Japanese gamers have their own unique tastes and habits, much like any other geography in one way or another. Having a detailed un is key to launching a successful game in Japan. Conducting market research and gaining insights into the Japanese gaming market can help the company better understand the local gaming landscape.

Mobile

Mobile games are a major trend in the Japanese domestic gaming industry, with an notable chunk of the total Japanese gaming market consisting of mobile game revenue. Popular mobile games in Japan include Fate/Grand Order, Monster Strike, and Puzzle & Dragons.

eSports

eSports is a growing trend in Japan, with the country having its own professional league for eSports. In addition, the Japanese government has been investing in the development of eSports, and the country has hosted a number of international tournaments. Notably, Kobe in Hyogo Prefecture has opened an eSports facility aimed specifically at the elderly.

Indie Games

Indie games are a different breed here in Japan. While it’s possible to say that there is interest in them, it must be said so cautiously. Japan’s educational resources and domestic standards of business practice create an extremely high barrier to entry for most individuals that may otherwise be interested in becoming a developer. As such, we believe that there’s a good opportunity for international indie devs to swoop in and grab a chunk of market share, which is what events like Bitsummit are meant to facilitate (though we won’t speak to their efficacy).

Localization

Localizing the game for the Japanese market is essential. This means adapting the game to the local language, culture, and preferences. The company should also consider working with a local partner such as a localization agency or a software development firm to ensure that the game is tailored for the Japanese market. 

Points to hit are:

• Cultural and Social Norms: It is important to be aware of the cultural and social norms in Japan, such as the avoidance of direct confrontation, respect for hierarchy and the importance of politeness in communication.

• Language: Regional language variations and dialects should be taken into consideration when localizing a game.

• Audience: Knowing the target audience is essential when localizing a game. This includes understanding the different age groups and their preferences.

• Platform: One thing to note is that Nintendo dominates Japan’s console market, and iOS the mobile phone market. PC gaming, while popular amongst foreign residents of Japan, isn’t comparatively particularly popular.

• Distribution: Research the different distribution channels in Japan and understand their differences, such as the Nintendo’s Store, PlayStation Network, Xbox Live, and Steam. This is actually a really interesting part of the equation, and keep a particularly watchful eye on Steam, as it is a massive player in the Global Market, but only 1.93% of users speak native Japanese, suggesting that Steam’s market penetration in Japan is miniscule.

• Monetization: At the moment, gacha mechanics are extremely popular, but of course there are other factors at play. And, honestly, we encourage our clients to explore alternatives to the standard/accepted practice because, well, its less sketchy. Research the different monetization strategies used in the Japanese gaming market to better understand the lay of the land, and determine how to proceed from there.

• Marketing: As ever, a strong marketing strategy is highly advised to draw attention to your game/s and drive sales. You should consider partnering with local influencers, running advertising campaigns, and engaging with the local gaming community to promote the game.

  For our Tokyo clients, we honestly start off by telling them to go have a few drinks at Star Club or A-Button and talk to some of the locals. For Osaka, Space Station, and this is actually a more important point than it lets on. So many of our clients have the bad habit of holing themselves up that they forget some of the best marketing is done through personal brands. So yeah, build cool shit, but also get out there and have a weird time with some strangers.

And That’s a Wrap… for Now

We won’t pretend this is an exhaustive list of how to best approach the Japanese gaming market, but it sure is a start. If you’d like to discuss details, don’t hesitate to get in touch!