One of the more commonly repeated myths of the modern game industry is that the Japanese market has died. While it’s obvious to anyone in Japan with eyes and an open mind that it’s not the case, it never hurts to have a little data to back up the anecdotes. That’s just what major Japanese game magazine publisher Famitsu has provided in the form of their Famitsu Game White Paper 2015 report, an annual summary of the industry on the whole. Dr. Serkan Toto, a mobile games analyst and consultant for the Japanese market, has provided an excellent English summary of the report on his blog, and you should check it out if you want a few extra details.
The Japanese domestic market grew to a record $9.6 billion in 2014, up 4% from the year before. Now, the way Famitsu organizes its data is a little unusual. They have separate categories for “video game software", which consists of console and dedicated handheld software sales, “video game hardware", which includes sales of console and dedicated handheld hardware, and “online games", which includes software sales made through smartphones, tablets, feature phones, and PCs. The online games segment grew 13% in 2014, reaching a value of $6.4 billion. But hey, that could be on the back of a PC surge, right? While it’s true that PC software is starting to pick up a little from its previous state as a refuge for adult anime games, Famitsu has fortunately isolated the mobile data for us. The mobile segment of the market grew an impressive 18% over the prior year to $5.8 billion. To give you an idea of how rapidly that segment has gained, a mere five years ago, that number was just above $1 billion.
Now, let’s turn away from all of these facts and bits of data for a bit of anecdotal fluffery on my part. Mobile gaming did not kill console gaming in Japan. It was already in a very bad place well before mobile gaming took off. If I had to take a guess, I’d say that people in general don’t have the time or inclination to be anchored to their TVs here anymore. That was a feeling Nintendo and Sony were able to take excellent advantage of with their dedicated handhelds last generation. With that being said, I believe very firmly that mobile gaming has dealt a heavy blow to the dedicated handheld business in Japan. Nintendo’s 3DS, while nothing to be ashamed of, is likely to end up with a lifetime total of about 70% of the Nintendo DS’s, while the PS Vita is going to struggle to end up with even 25% of the PSP’s numbers. Mobile is feasting heartily, and a lot of its meal has been swiped off the plates of the dedicated handhelds.
Lest this all be good news for mobile, it’s probably worth pointing out that the principle beneficiaries of the current state of the market are Gungho and Mixi. Their respective games Puzzle & Dragons (Free) and Monster Strike (Free) combine for around 70 – 80% of mobile gaming spend in Japan, according to an article at Venture Beat. That seems to point to a market propped up by a couple of very big winners that aren’t getting any younger. The market still has a ways to go to prove it can be a reliable, stable source of income for Japanese gaming companies. Still, it’s clear that the Japanese people are hungrier for games than ever before, so the opportunity is there. The challenge for the traditional gaming companies will be in adapting their strategies to meet the needs of this new generation of gamers.
