This document summarizes the status of Japan's social gaming market in three parts. Part I discusses the unique social media landscape in Japan and provides statistics on the size and players of the social gaming market. Part II outlines 10 key trends occurring in Japan and Asia's mobile gaming space, such as the rise of smartphones and chat apps. Part III examines the challenges and opportunities for Japanese gaming companies to internationalize their content beyond Japan.

1. Japan‘s Social Gaming Market 2013:
Status Quo, Key Trends & Internationalization
By Serkan Toto, PhD
www.serkantoto.com
Image credit: DeNA

2. 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

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

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

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

6. I: Status Quo Of Japan’s Social
Gaming Market

7. 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

8. 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.

9. Japan‘s Social Gaming Ecosystem

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

11. Size Of Japan‘s Social Gaming
Market
-> Projection from Nomura Research, January 2012
Image credit: The Nikkei

12. 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.

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

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

15. Spending Patterns
-> Not much difference compared to other regions

16. 4 Big Reasons Why Japanese Play
Social Games

17. The Top 5 User Demographics For
Social Games

18. Some User Data From GREE

19. The
Top
10
On
Mobage.

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

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

22. Trend 1: Smartphone Revolution
Source:
Impress
R&D

23. Trend 2: Shift To The App Economy

24. Trend 3: Rise Of The Chat Apps

25. Trend 3: Rise Of The Chat Apps

26. Trend 4: Competition In Platforms

27. Trend 4: Competition In Platforms
Image credit: TechCrunch Japan

28. Trend 5: Puzzle & Dragons Hype

29. Trend 5: Puzzle & Dragons Hype

30. Trend 5: Puzzle & Dragons Hype

31. Trend 5: Puzzle & Dragons Hype
Image credit: Social Game Info

32. Trend 5: Puzzle & Dragons Hype

33. Trend 6: Next-Gen Social Games

34. Trend 7: Regulation (?)
• 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.

35. Trend 7: Regulation (?)

36. Trend 8: Card Battle Fatigue (?)

37. Trend 8: Card Battle Fatigue (?)

38. Trend 8: Card Battle Fatigue (?)

39. Trend 8: Card Battle Fatigue (?)

40. Trend 9: Diversification

41. Trend 10: Internationalization

42. III: Internationalization Efforts

43. DeNA And GREE’s Platform
Business Outside Japan Failed

44. 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 Englishlanguage platform now – 20 months after
launch in the US (Japan: 1,500+ games).
• Mobage moved to FB and Twitter integration.

45. Positive Signs Exist (In The US)

46. Positive Signs Exist (In The US)

47. 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.

48. Difficult Situation In China

49. Japanese Content Does Well In SK

50. 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.

51. Transferability Of Content Is Key
"Key issue: art style and themes"

52. Thank you for listening!
Questions?

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