This document summarizes the status of Japan's social gaming market in 2013. It discusses the fragmented market dominated by GREE and DeNA, with an estimated market size of $3-4 billion. It also outlines 10 key trends, including the rise of smartphones, chat apps, and puzzle games like Puzzle & Dragons. Internationalization efforts by Japanese companies have struggled, but some content is finding success abroad, and the future may lie in content provision over platforms.

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 English-
language 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