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Japanese Games Global Industry Share Plunges Below 20%


The Japanese games industry appears to be in the midst of a slump, with sales last fiscal year plunging and Japan’s overall share of the worldwide market shrinking to just under 20%, along with a precipitous 15% decrease in the size of the domestic market, reports Enterbrain, publisher of famed gaming magazine Famitsu.

Japan has long been the mother country to many of the biggest companies in the games industry such as Nintendo, Sony, Sega, and many others, much of them critical in the development of the video game industry since the 1970s.

However, the proliferation of European and American game developers in the last decade has not been matched by the Japanese gaming industry, and Japan appears to be shrinking as a video game giant, at least compared to years past.

In the 2007 fiscal year, the Japanese market size was ¥687.95 billion ($7.63 billion), shrinking significantly by over 15% to ¥582.61 billion ($6.4 billion) in 2008.

Previous years were kinder for the Japanese market, but foreign markets, namely Europe and America, did increase in proportion to Japan.

As a result, the current Japanese share of the games market (including console, online, cellphone and PC games, plus hardware) does not even exceed 20%, a “complete turn-about from the age of the Famicom and PlayStation”, says Enterbrain.

This could be tied to a cyclical lack of vigor on the part of the Japanese markets of late, though a possibly  less reassuring explanation might be long term demographic changes, or changes in consumer taste.

Certainly companies worldwide must also be feeling the impact of recent economic downturns, and PC games being included in the figures might skew the issue somewhat (Japan basically ignores the PC as a gaming platform) but as the world market share of Japan shrinks one has to wonder what changes will occur to Japan’s once tight grip on the world of console gaming?

Sources: J-Cast, Famitsu.

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  • Have to agree with J-games going to shit these days, particularily J-RPGS. You play a few and you’ve pretty much played them all because they are pretty much the same.

    American games does have a bit more variety in their gameplay and their story, but even then it’s becoming more homogenised. I’m getting really sick of generic FPS games, and since I live in Australia (and thus most games are of the western type), I’m seeing hardly much more variety than the Japanese counterparts.

  • It seems that the game industry (especially Sony) has shifted their focus onto American hardcore gamers, and the PS3’s game lineup has become almost as FPS-oriented as the Xbox! There are fewer PS3 games made for Japanese tastes than there were PS2 games, so they did it to themselves.

    • Oops, my bad. Here’s my actual post.

      It seems like there’s some sort of ”reputation” involving certain posters, but it makes me wonder if these people are trolls or just plain stupid for who they are. Then again, Apple consumers do buy computer systems for more than 3 times the amount compared to a likely better system you can buy elsewhere.

  • CommonSense says:

    Hideo Kojima has been quoted on saying that “Japan has lost to Western developers”. Capcom equally shares Kojima’s sentiment. True statement if you look at the quality of their games over the past couple of years.

    Its been apparent for a while so I’m not surprised. Outside of a few particular titles no one is really interested.

  • How about translating more games to english japan and sending them to the worldmarked,uncensored of course.
    Don’t ignore the pc you must release a disgaea special package containing all 3 games with extra added features and get massive profit!!

  • a) go search the U.S. iPhone app store for diet apps, and see a ton of really well designed apps
    b) search for ダイエット on the Japan app store, see 5 or 6 pathetically laughable apps, shun them
    c) look at the U.S. web, see how vibrant and open it is for all platforms from Linux to Windows to Safari
    d) look at major Japanese websites that not only require Windows, but IE too
    e) remember that many young Japanese just carry a keitai, and don’t own a computer

    Japan is becoming a very un-technical nation, it seems to me.

    • Huh…funny how you point out Iphone…what’s the market share of that in Japan anyway? There are loads of different type of cellphone in Asia market that have similar function to what an Iphone can do. There really isn’t a huge fanbase of Mac Users in Asia countries.

      PC games…The system requirement for most new games are so high that most people aren’t able to afford them. a PS3 while around 400-500 right now is going to be able to keep up with games for at least 6 year or more. While a PC probably be out of date in 1 or 2 years or if talk about high-end parts, in months.

        • Like it or not, it’s a stigma that exists from the past, regardless of how true it is today. Reality isn’t as important as perception. If people believe their computers cannot play game X, they won’t buy it.

          Also, IMO people get angry when they have to turn down graphics settings and can’t play with everything maxed. It’s a lot easier to just buy a console.

    • >>Japan is becoming a very un-technical nation, it seems to me.<<

      Either that or the Japanese consumer has a lot less tolerance with mucking around with hardware/software to get things to work. It’s not a bad thing to expect something to work by just inserting a cartridge or a memory disk instead of having to install a graphics driver, direct x, wine/cedega, etc.

      I sometimes feel that the lack of unity of hardware / software specs in the US computer market really punishes the casual computer gaming hobbyist.

    • If you’re going to rely on Apple as a basis for “knowledge” or “their technology”, don’t bother posting. This article is also about games, which ironically, the homosexually favored company Apple has little of.


    Bullshit, I guess the fanboy’s quickly forgot about the second gen PS2’s. You know, the one’s that where missing a little piece of tape, and thus the laser moved ever so much, tll you got nothing but read disk error’s. Oh, and Sony never payed for repair’s, always $50 outta your pocket just to fix a manufacturing problem. Oh, and what about the first made PSP’S? Forget all the controversy surrounding dead pixels and shitty square buttons?

    Let’s not forget the PS1 as well, I mean, how can you forget having to put your system on its side, or even upside down, to be able to play anything? Atleast Microsoft(M$ to all the peole who still think it’s entertaining, which are few) admitted the problem, and are spending millions letting people get it fixed. So shut up fanny trannies, because Sony is probebly the worst company ever to get in the video game market. Besides, the only company to ever make a super strong console was Nintendo, cause my damn SNES still WORKS!

    • Zelgadis4tw says:

      That was partially my point, nice flames though “fanboy”. I did indeed forget about the PS2 problem as how I never had those problems, even so, while they are design flaws, they aren’t of the level to permanently cripple and force you to have the system replaced under warranty. As for the PSPs, I don’t have one, never had one, and didn’t know because I didn’t bother looking at information about a portable system I didn’t care about. The PS1’s positioning problem does not qualify for comparison as it was still possible to run games on it with it being broken.

      Yes, all my Nintendo consoles still work perfectly, and am happy with them. I do have to hand it to M$ that they did actually honor their warranty and their inherent design flaw. As I recall seeing on some other occasion you could fix the PS2 disc thing yourself, but that ofcourse voided the warranty and doesn’t mean Sony is any less at fault for not selling a solid console. So in closing, I only knew of one instance similar to the Xbox360 which was PS2’s laser problem. I seem to recall something was wrong with 1st gen Xbox too, but maybe that’s my imagination?

  • The cocks at Bandai-Namco could’ve made a few more yen not region locking their Japan-only games like The Idolm@ster, but of course that would mean they’d need to be reasonable, which is just an absurd hairy foreign devil concept.

    • Now that you mention this, I suppose Japan is satisfied with their market. They wouldn’t bother with JP only releases if it really mattered to them. Square-Enix has done two Final Mix releases for JP Kingdom Hearts, but none for other regions.

      Kingdom Hearts is even part Disney, and the fanbase of the movies it includes is barely Japanese. The game series comprises decades worth of other works making it quite a major title, yet still has a locked market. Then again, I think Disney may be getting most of the profit.

        • The main point was video processing, not total eps. R1’s are butchered while R2’s are seemingly like a “remastered” version. A large reduction in bitrate was just an addition to this.

        • Which doesn’t necessarily mean that’s the source of the problems. It’s like saying you could put a single episode on a disc and it would be even better. At some point, it’s not the storage that’s the issue and it’s overkill.

          The medium is not that expensive, so the episode count really has nothing to do with the incredible price differences. Whether they use two discs or one doesn’t change the cost to the degree that exists.

        • When a R2 has double the data rate of an R1 release, of course there’s going to be differences. It’s an easy assumption that they are aiming for duration. A fair portion of the video R1 companies handle is very likely to be progressive, yet they butcher it with at least interlacing and insufficient bitrates. There’s no “compression level” for video like that. Maybe Japan actually requests for this to be done, just to ensure their market holds the best (untouched)version. Another thing to consider is preset hardware encoders.

        • Indeed, especially when considering the fact that anime can be nearly twice as compressible as any other material. The problem with western anime DVD releases (not just R2, we have the same problems in Europe) is the lack of knowledge about what they’re doing (aka incompetence), not the episode count per disc.

        • Are you saying that they are intentionally lowering quality in order to fit more episodes on each DVD? I wouldn’t think there would be any problems fitting 100 mins of material on a single disc when live action tv and movies do that and more.

        • While R1(Region 1, US) anime DVDs do have more episodes per disc, the video has taken a fairly large reduction in quality compared to its R2(JP) counterpart. There are rare occasions where the video has been fairly left untouched, and not processed with unneeded problematic things like interlacing and resulting artifacts. With digital video progressing further you’re likely to see less of these problems, but it is still something that exists on DVD. Then again, there are still so many people that watch anime on low quality streaming sites…

        • Zelgadis4tw says:

          Indeed, you lost the game. Poor troll is poor? No excuse for region locking it. The only reason I can see for them to region lock something, especially like this where an English translation is already done, is the extra production costs to have copies readily available to the “foreign devils”.

          Though in this particular case I think that they don’t feel like foreigners are willing to buy the game ~again~ like the Japanese market would. This is evidenced by their price gouging Anime DVDs to Japanese otaku vs what Americans pay. Here I thought that we were paying a little much for a 4 episode DVD for $20 or $25 and felt somewhat cheated when they charged the same for a 3 episode disc. Little did I know that they charged so much more for half the content in Japan.

  • “Japan basically ignores the PC as a gaming platform”

    Well theres your problem. PS3, 360, Wii. Those are nice an all, but eventually they will become outdated. PCs however are here to stay.

    but yeah, I think its as Tomo-pyon said. When the economy is going to hell, I dont think you want to make games MORE expensive. Thats just plain stupid.

    • Problem with the PC market though is that piracy eats into so much of the profits. It’s why a lot of game development houses prefer consoles or making MMOs. Given that China is just in Japan’s backyard. Their preference to make games on non-PC platforms is understandable.

    • It may indeed be an issue that Japan ignores the PC as a platform, but I think I recall hearing that the PC gaming market has been going through particularly rough times itself outside of Japan, as opposed to the quickly growing console game market?

      I’m not much of a gamer, (I did consider letting Artefact make this post instead) but I’m fairly certain that’s the case for the international PC games industry.

  • To me the variety of games this generation is rather low. With a “new” but crippled control method of the Wiimote, a fair amount of developers are trying to make a cheap buck with simple games. Online games are also gaining more ground, adding to more repetitive releases or lack thereof.

    These online games are generally enough to satisfy someone, causing less people to opt to try other titles. Actual complex games that show creativity have become too time costly, thus leading more sales to online games that are mostly part of the American market.

  • Looking over the sales charts at over the past two years, the American & Japanese charts couldn’t be anymore different. The #1 selling title in Japan sometimes move barely enough units to even reach the same amount needed to reach to the top fifty in America. The U.S. & Canada are bigger markets than Japan, so that leaves Europe to expand in.

    European sales are reaching American sales heights, but those charts reflect American charts in the titles sold than Japanese. The Japanese market has become, like anime, a bit too aimed at fanboys. A tough thing to say on such a site as this, I know.

    Unlike the 16-bit & 32-bit days, American studios finally are churning out the quality product. They’ve embraced large production values, and are competitive in gameplay innovation. Thankfully Japanese hardware developers are just as competitive in hardware innovation.

    • Zelgadis4tw says:

      America (M$) still has a long way to go though, considering I have never heard of anything similar to the RRoD before Xbox. But I suppose I could acknowledge the fact that the flavor of Japanese games are too…offputting towards the non Japanese fanbase.

      As for 16bit and 32 bit days, there really wasn’t as much ground to make something particularly unique in styling as opposed to now. After all, the pseudo-real graphics in 16/32 bit were basically limited to usually cartoon renditions of portraits that appeared for moments, then the gameplay resumed.

    • Zelgadis4tw says:

      I can only say it’s about time, considering when SE back in it’s SS days (“funny” joke, sorry) ditched Nintendo and went Sony. I did manage to get me a PS2 and such to play out most of the Final Fantasy franchise since they did that, but I’m almost loling over the fact that they decided to go and multi-platform FFXIII.

  • The reason for this is really clear. Sony’s not addressing their high price point. Sony and Nintendo are both failing to market their games effectively (see numerous Wii failures and Killzone 2), and American developers and publishers are kicking ass.

  • thats right. American companies are designing new innovative games and stories and designs. Japan is just reselling old nintendo titles and Sony is copying everything xbox does. The Japanese need to step it up. You guys are being lazy. Go America! go world of warcraft and starcraft 2 and modern warefare 2 !!!!