Japan Gaming Market

Japan Gaming Market:

The Japan gaming market size reached US$ 23.9 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 57.8 Billion by 2032, exhibiting a growth rate (CAGR) of 10.1% during 2024-2032. The inflating popularity of social gaming, where multiplayer games are integrated with social media platforms, along with the rising demand for e-sports, is primarily driving the market.

Japan Gaming Market Analysis:

• Major Market Drivers: In Japan, the inflating popularity of mobile gaming, owing to its ease of access and affordability, is propelling the market. Besides this, the widespread demand for gaming as a mainstream form of entertainment is also acting as another significant growth-inducing factor.
• Key Market Trends: The introduction of state-of-the-art gaming facilities, along with the increasing support from both public and private entities, is positively influencing the market across the country. Moreover, the rising integration of blockchain technology and cryptocurrencies can revolutionize the gaming industry by allowing secure as well as transparent transactions, which will continue to stimulate the market in Japan over the forecasted period.
• Challenges and Opportunities: Intense competition among key players, along with changing consumer preferences, are among the key challenges hampering the market across the country. However, companies in Japan are focusing on diversifying their game portfolios to cater to a broader audience, which, in turn, is bolstering the market. In line with this, they are investing in augmented reality (AR) and virtual reality (VR) technologies, thereby catalyzing the market.

Japan Gaming Market Trends:

Demand for Gaming Peripherals

The increasing number of professional gamers is propelling the demand for gaming peripherals, such as mechanical keyboards, headsets, mice, joysticks, etc. This, in turn, is augmenting the market across the country. According to the report published by IMARC, the Japan gaming peripherals market size reached US$ 241.9 Million in 2023. Looking forward, IMARC Group projects the market to reach US$ 462.6 Million by 2032, exhibiting a growth rate (CAGR) of 7.2% during 2024-2032. Additionally, the development of PCs that support innovative features, such as facial recognition, high-quality graphics, gesture-based gaming, etc., is also acting as another significant growth-inducing factor. For example, in February 2024, Nick Falzone launched a wooden gaming PC with a hardline water-cooling system based on the Japanese Kumiko woodworking technique. Besides this, the growing inclination among the millennial population towards high-quality graphics, facial recognition, and gesture-based gaming is further positively influencing the Japan gaming market outlook. For instance, in June 2022, Sony, a multinational conglomerate corporation headquartered in Tokyo, Japan, introduced a PC gaming gear that provides an interactive game environment to users. Moreover, extensive collaborations by prominent players to expand the product portfolios will continue to fuel the market across the country in the coming years. For example, in April 2024, Animoca Brands Japan announced that it entered into a memorandum of understanding (MoU) with SQUARE ENIX CO., LTD., to strengthen the marketing of SYMBIOGENESIS, a SQUARE ENIX's game and associated collection of 10,000 NFT characters with game utility.

Rising VR and AR Applications

The growing integration of games with emerging technologies, such as augmented reality and virtual reality, is augmenting the market. As per the data stated by JETRO, a non-profit organization that is managed by the Ministry of Economy, Trade and Industry (METI) in Japan, the AR/VR-related market spending in Japan increased from US$ 1.29 Billion in 2018 to US$1.78 Billion in 2019 and US$ 3.42 Billion in 2023. Moreover, virtual reality games are played by using a wide array of VR gaming peripherals, such as headsets, hand controllers, smart glasses, sensor-equipped gloves, etc., which is escalating the Japan gaming market demand. According to a survey by Fuji Keizai (Tokyo/Chuo), the domestic market size for industrial AR/MR display equipment, such as smart glasses, was ¥ 2.1 Billion in 2018 and is expected to grow to ¥ 2.5 Billion by 2025. Apart from this, the elevating investments by primary companies in aggressive marketing campaigns to expand their existing consumer base and promote their products in the country are catalyzing the market. For instance, in May 2024, Thirdverse, Co., Ltd, one of the VR development studios in Japan, announced the introduction of its new publishing support services, tailored specifically for international VR game publishers aiming to enter the market across the country. Furthermore, the increasing popularity of location-based entertainment (LBE) is expected to drive the market in the coming years. For example, in May 2024, DIVR Labs, one of the designers of virtual worlds and free-roam 4D VR arenas, developed a VR arena at the Yokohama World Porters, a popular shopping mall in Yokohama, Japan. Moreover, the DIVR immersive arena provides thrilling original games that are integrated with 4D effects to offer a memorable experience to visitors.

Development of Anime-Based Games

The inflating popularity of manga-based games, owing to the expanding millennial population across the country, is elevating the Japan gaming market's recent price. According to the data published by the Statista Research Department in January 2024, around 5% of respondents, mainly the millennials, named the manga and anime series Oshi no Ko in Japan. Furthermore, the rising usage of social media platforms is expanding the storytelling possibilities, thereby showcasing the seamless integration of anime and gaming in Japan's entertainment landscape. For instance, as per a survey conducted in Japan in January 2022, the messaging app LINE was used by 77.6 % of young individuals belonging to Gen Z. Apart from this, the launch of anime-based games with stunning visuals and engaging gameplay is catalyzing the market. For example, in April 2024, KLab Inc. developed a smartphone game in Japan based on Haruichi Furudate's manga, Haikyu. Furthermore, famous scenes and quotes from the original animation series are included in the game, which will fuel the market in the coming years.

Japan Gaming Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with the Japan gaming market forecast at the country and regional levels for 2024-2032. Our report has categorized the market based on the device type, platform, revenue type, type, and age group.

Breakup by Device Type:

• Consoles
• Mobiles and Tablets
• Computers
   

The report has provided a detailed breakup and analysis of the market based on the device type. This includes consoles, mobiles and tablets, and computers.

The shifting preferences from unit-sales-based business models towards engagement-based models across the gaming industry in Japan are escalating the sales of consoles. In August 2023, Geo Holdings developed its retro game computer console across Japan. For instance, in February 2024, Nintendo announced that the company sold over 7 million Nintendo Switch OLED devices in Japan alone. Moreover, the convenience and accessibility of mobile devices make them the preferred gaming platform for a wide demographic, which is acting as another significant growth-inducing factor. Some of the common games across the country that can be played over smartphones include Zelda, Final Fantasy, Dragon Quest, Sonic, Mario, Metal Gear Solid, Space Invaders, etc. Apart from this, the launch of computers with higher internet speed represents one of the Japan gaming market's recent opportunities.

Breakup by Platform:

• Online
• Offline
   

The report has provided a detailed breakup and analysis of the market based on the platform. This includes online and offline.

The rising demand for multiplayer online games (MMOs) is driving the market across the segmentation. For instance, BitSummit was founded with the goal of giving independent game makers in Japan a chance to show their games to the world. Additionally, it receives support from leading industry companies like Nintendo, Sony, Microsoft, and Valve. In contrast, offline gaming in Japan remains robust, particularly in the console and arcade segments. The Nintendo Switch, with games like "The Legend of Zelda: Tears of the Kingdom," provides immersive offline experiences that are highly popular among individuals across the country. This, in turn, is increasing the Japan gaming market share.

Breakup by Revenue Type:

• In-Game Purchase
• Game Purchase
• Advertising
   

The report has provided a detailed breakup and analysis of the market based on the revenue type. This includes in-game purchase, game purchase, and advertising.

In-game purchases, particularly within mobile games, represent a substantial portion of the revenue, driven by popular titles, such as "Genshin Impact" and "Uma Musume Pretty Derby." These games utilize gacha mechanics and seasonal events to incentivize players to spend on virtual items and characters. Game purchases, encompassing physical and digital sales of console and PC games, also play a critical role. Additionally, advertising provides a steady income stream. Developers integrate ads seamlessly into gameplay, offering rewards for watching ads or presenting them between game levels, thereby monetizing a vast player base without direct purchases. This diverse revenue structure caters to different player preferences and spending habits, which is driving the Japan gaming market growth.

Breakup by Type:

• Adventure/Role Playing Games
• Puzzles
• Social Games
• Strategy
• Simulation
• Others
   

The report has provided a detailed breakup and analysis of the market based on the type. This includes adventure/role playing games, puzzles, social games, strategy, simulation, and others.

Adventure and role-playing games are a significant segment, as they offer deep narratives and interactive experiences to users. Additionally, puzzle games, such as Puzzle & Dragons and Line: Disney Tsum Tsum, are extremely popular in the country due to their engaging and addictive gameplay. On the other hand, strategy games provide complex tactical challenges, thereby appealing to players who enjoy strategic planning and competitive gameplay. Moreover, other genres, including action, horror, sports, etc., are also elevating the Japan gaming market revenue.

Breakup by Age Group:

• Adult
• Children
   

The report has provided a detailed breakup and analysis of the market based on the age group. This includes adult and children.

The increasing inclination among adults toward deep narratives and intricate gameplay mechanics is propelling the segment's growth. For instance, in September 2023, Nintendo Japan introduced an app for the console's subscription service, Nintendo Switch Online, that is available to only 18+ users. Besides this, according to the Japan gaming market overview, educational games and apps are gaining widespread popularity across the country, as they are specifically designed to develop cognitive skills and provide entertainment to children.

Breakup by Region:

• Kanto Region
• Kinki Region
• Central/ Chubu Region
• Kyushu-Okinawa Region
• Tohoku Region
• Chugoku Region
• Hokkaido Region
• Shikoku Region
   

The report has also provided a comprehensive analysis of all the major regional markets, which include Kanto Region, Kinki Region, Central/ Chubu Region, Kyushu-Okinawa Region, Tohoku Region, Chugoku Region, Hokkaido Region, and Shikoku Region.

The wide presence of gaming arcades, including Taito Game Plaza, across the Kinki Region, Osaka, is augmenting the market. Moreover, in the Chugoku Region, there is a notable preference for social and simulation games, reflecting the region's demographic trends. According to the Japan gaming market statistics, the Central/Chubu Region, known for its manufacturing hubs, has a diverse gaming culture with a balanced interest in both traditional consoles and emerging mobile platforms. These regional insights underline the diverse and vibrant nature of the market, which is catered to meet the unique preferences and lifestyles of each area.

Competitive Landscape:

• The market research report has also provided a comprehensive analysis of the competitive landscape in the market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major Japan gaming market companies have been provided.
• Major game developers in Japan are focusing on using web3 technologies, working on gaming projects that are integrated with emerging technologies, and forming partnerships with web3 companies. They are introducing blockchain gaming, which is acting as another significant growth-inducing factor. Apart from this, strategic collaborations among prominent companies position Japan as a key hub for web3 gaming innovation.

 Japan Gaming Market Recent Developments:

• May 2024: Nintendo, a multinational video game company headquartered in Kyoto, Japan, announced the launch of its smash-hit switch console.
• May 2024: Oasys, a blockchain network focused on gaming, partnered with SBINFT, an NFT platform operated by a subsidiary of the financial conglomerate SBI Group, to expand the crypto gaming sector in Japan. 
• February 2024: Akili introduced gaming therapy EndeavorRx, which is approved by the U.S. FDA to treat pediatric patients with ADHD in Japan.

Japan Gaming Market Report Scope:

Key Questions Answered in This Report:

• How has the Japan gaming market performed so far and how will it perform in the coming years?
• What has been the impact of COVID-19 on the Japan gaming market?
• What is the breakup of the Japan gaming market on the basis of device type?
• What is the breakup of the Japan gaming market on the basis of platform?
• What is the breakup of the Japan gaming market on the basis of revenue type?
• What is the breakup of the Japan gaming market on the basis of type?
• What is the breakup of the Japan gaming market on the basis of age group?
• What are the various stages in the value chain of the Japan gaming market?
• What are the key driving factors and challenges in the Japan gaming market?
• What is the structure of the Japan gaming market and who are the key players?
• What is the degree of competition in the Japan gaming market?

Key Benefits for Stakeholders:

• IMARC's report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Japan gaming market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the Japan gaming market.
• The study maps the leading, as well as the fastest-growing, markets. It further enables stakeholders to identify the key country-level markets within the regi
• Porter's five forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Japan gaming industry and its attractiveness.
• The competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.