Social Games In Japan 2013: Status Quo, Trends And Internationalization

Japan‘s Social Gaming Market 2013: Status Quo, Key Trends & Internationalization

By Serkan Toto, PhD www.serkantoto.com

Image credit: DeNA

About Me •  Social and mobile gaming industry consultant •  Advisor for startups in Japan and the US •  Japan contributor for TechCrunch.com •  Based in Japan since 2004 •  Hardcore gamer •  Personal site: http://www.serkantoto.com

Visit My Website For Free Information On Japan’s Mobile Game Industry (http://www.serkantoto.com)

Contact Information

Twitter: @serkantoto LinkedIn: http://linkedin.com/in/serkantoto Email: serkan AT serkantoto.com

Agenda I: Status Quo Of Japan’s Social Gaming Market II: 10 Key Trends In Japan (And Asia) III: Internationalization Efforts

I: Status Quo Of Japan’s Social Gaming Market

Japan‘s Unique Social Landscape

•  4 homegrown social networks with roughly

25-40+ million registered users each: – Mixi (80% mobile social networking) – GREE (mobile social gaming) – Mobage (mobile social gaming) – LINE (mobile chat application)

•  Twitter: 30+ million users •  Facebook: 19+ million MAU

Fragmented Game Market

•  ~300-400 social game providers in Japan. •  20+ game platform providers (all mobile). •  2 dominant companies as platform and

game provider hybrids: GREE and DeNA (“Facebook+Zynga in 1“).

•  LINE (since July 2012), Kakaotalk (February 2013), and dgame (December 2012) emerge as domestic competitors.

Japan‘s Social Gaming Ecosystem

Size Of Japan‘s Social Gaming Market -> Projection from Morgan Stanley, January 2012

Size Of Japan‘s Social Gaming Market -> Projection from Nomura Research, January 2012

Image credit: The Nikkei

Size Of Japan‘s Social Gaming Market -> Other sources (July 2012)

•  Ministry Of Internal Affairs: US$3.26 billion (2011)

• Japan Online Game Association: US$3.6 billion (2011)

-> SuperData: US market sized at $1.4 billion in 2011, to grow to $2.4 billion by 2014.

Size Of Japan‘s Social Gaming Market -> Projection from Yano Research, January 2013

Extremely High Paying User Ratio -> Morgan Stanley offers more insight.

Spending Patterns -> Not much difference compared to other regions

4 Big Reasons Why Japanese Play Social Games

The Top 5 User Demographics For Social Games

Some User Data From GREE

The Top 10 On Mobage.

The Top 10 On GREE. -‐> Note: on feature phones, GREE doesn‘t show their own Atles in the ranking.

II: 10 Key Trends In Mobile Gaming In Japan (And Asia)

Trend 1: Smartphone Revolution

Source: Impress R&D

Trend 2: Shift To The App Economy

Trend 3: Rise Of The Chat Apps

Trend 4: Competition In Platforms

Trend 4: Competition In Platforms

Image credit: TechCrunch Japan

Trend 5: Puzzle & Dragons Hype


Image credit: Social Game Info

Trend 6: Next-Gen Social Games

•  There are now payment caps for younger players on DeNA and GREE.

•  Real-money, off-platform trading of virtual items is still a problem.

•  Certain bingo/lottery-like gaming mechanics are banned.

•  Odds of winning are now disclosed in gacha. •  JASGA has been established.

Trend 7: Regulation (?)

Trend 7: Regulation (?)

Trend 8: Card Battle Fatigue (?)

Trend 9: Diversification

Trend 10: Internationalization

III: Internationalization Efforts

DeNA And GREE’s Platform Business Outside Japan Failed

DeNA And GREE’s Platform Business Outside Japan Failed •  GREE International publicly acknowledged

the platform (in the US) is „on ice“. •  Openfeint was shut down in December 2012. •  GREE‘s HTML5 platform is poised to fail, too. •  Mobage offers 75 games on its English-

language platform now – 20 months after launch in the US (Japan: 1,500+ games).

•  Mobage moved to FB and Twitter integration.

Positive Signs Exist (In The US)

Difficult Situation In China •  GREE is active in China with an office, a

partnership with Tencent, and various investments. There seems to be no progress.

•  DeNA is much more active in China. It runs dozens of partnerships with handset makers, telcos and app stores. Mobage had 60 games and 5 million users in August 2012.

•  Both companies are very, very quiet about the Chinese market.

Difficult Situation In China

Japanese Content Does Well In SK

Outlook On Internationalization •  The future will likely see both GREE and

Mobage turn into content providers and publishers. People want games, devs want distribution - not platforms-inside-platforms.

•  DeNA in particular is running a number of titles successfully already.

•  GREE‘s Funzio titles are doing well. •  Japan (and other markets in Asia) offer a big

reservoir of excellent content providers.

Transferability Of Content Is Key

"Key issue: art style and themes""Key issue: art style and themes"

Thank you for listening! Questions?

Contact Information

Twitter: @serkantoto LinkedIn: http://linkedin.com/in/serkantoto Email: serkan AT serkantoto.com

Social Games In Japan 2013: Status Quo, Trends And Internationalization

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