12 things you need to know about Japan's gaming mobile market
e27 talks to the analyst and Kantan Games consultancy guru Dr Serkan Toto about the most noteworthy quirks of the Japanese mobile gaming industryBy Jonathan Toyad 21 Jul, 2014
Readers may recognise the name Dr Serkan Toto as the go-to man for all things related to the video game industry in Japan; his blog is renowned for dishing out analytics and info on the recent mobile gaming boom in Japan.
Toto also launched a new venture: a consultation group called Kantan Games. He and his “team of collaborators from various parts of the video games industry” dish games industry advice to big-sized game makers, as well as to financial industry representatives in the field of investment banks and hedge funds.
“My company is focussed more on strategic advice, market-entry advice and consultation,” Toto said. “(Kantan Games) isn’t going to go into the development side and go ‘this is too hard; make this part a little bit easier for the Japanese market.’ It’s more about getting your games noticed and getting the following answered: if a foreign game enters the Japanese market, what kind of competition is there? What kind of partners are there? Does the game has any potential and what can be done to improve it for the market?”
After much poking and prodding, here’s what e27 garnered about the mobile industry in the wild and wacky world of Japan:
The best platform to be on isn’t on consoles or on app stores.
It’s the chat app LINE, a company that will be filing for IPO and is used in huge droves worldwide. “One of the big things in the Japanese games industry is the unexpectedly big success of LINE,” said Toto. “Even though LINE closed down its gaming platform by 30 per cent a couple of weeks ago, people are still playing LINE games and turning it on all the time.” It might be tough right now to go right in, but just keep in mind that anecdote about Cookie Run: anything is possible.
If you want to learn in-game monetisation, start looking at the iPhone/Android Japan charts.
Currently, the top breadwinner is the puzzle and role-playing game hybrid Puzzle & Dragons. “It’s still such a big game that completely took over the mobile gaming market,” said Toto. “I would call Puzzle & Dragons the best mobile game in the entire industry in terms of monetisation features. Budding designers and producers who wish to learn about monetisation in mobile games need to play Puzzle & Dragons first.”
Creating a new genre is tough, but a remarkable feat. Having quality helps too.
“The most important thing that people tend to forget is that content has to be good, engaging and fun,” said Toto, citing Puzzle & Dragons as a well-made and well-designed game, thanks to its match-three mechanics and RPG elements that remind players in Japan about top franchises like the Final Fantasy and Dragon Quest series.
He added that the Gungho Online-created game established a subgenre on its own: there weren’t any puzzle RPGs executed like it. “Now you see lots of puzzle RPGs everywhere, even outside of Japan, developers and publishers are trying to mash up the puzzle and action/RPG genre.”
It’s expensive, but TV ads matter.
According toToto, Puzzle & Dragons deserved its numbers because it started advertising on prime time television in October 2012. “TV advertising in Japan is incredibly important in acquiring users on a very, very large scale (at spots like the Shibuya 109 TV screen). Offline marketing is very big for mobile games in general.”
“(After Puzzle & Dragons’ debut), there were a lot more mobile games being advertised because Japan is the only country in the world that does that with a heavy rotation. So if you go to a hotel room and watch TV for 10 minutes, you will see the first mobile game TV ad during prime time.”
While costly, publishers and developers who know the lifetime value of their product users and the cost of acquiring one, this tactic is worth the investment.
Japan mobile games will trend well in other parts of Asia, possibly vice versa.
“Generally, video games from Japan don’t travel well to other countries,” said Toto. “If you look at the history of video games and look at the top 100 best-selling games in Japan of all time, you’ll see only one or two foreign games including the FIFA and Call of Duty series.”
Japan is unique in that sense, according to Toto. “If you look at all of this content console and mobile developers pump out every day and every week in the country, not a lot of these titles are doing well in America. Brave Frontier and Puzzle & Dragons are an exception they’re so good.”
His advice for Japanese game developers: To expand in Southeast Asia first just because of the similarities in tastes, artwork and design between the two areas. Speaking of which….
Localisation is very, VERY important
A translation and localisation effort on a game can mean life and death for a game. Having literal translations will not cut it; publishers will need to put more resources in preserving the tone, context and options for a game in the Japanese language if it wishes to survive. “The first version of Candy Crush Saga last year was horrible,” said Toto. “Even the title was translated badly. The Japanese localisers replaced the ‘Crush’ in the title with something synonymous to ‘devastating’ in Japan. Technically it was okay, but in the context of the colourful game, Japanese people who read it were going ‘WTF’.”
Toto also said that a publisher’s game needs to have Japan-specific events. “If you want to keep it fresh, original and fun, you’ll need to make them on a periodical basis; to keep it in the public eye of casual users.” These can range from Japan-only enemies and Japan culture-influenced costumes to garner attention in the microtransaction space.
The two games to watch out for in the Asian gaming spaces are…
Monster Strike and Chain Chronicles. The former is an action puzzle game where players have to launch character circles to hit and attack grouped-up enemy circles lumped up with Pokemon-like collecting elements. The latter is a real-time strategy game where you line up your medieval soldiers to ward off fantasy creature hordes that come in waves.
“Monster Strike is a great example because it has mass appeal and has a lot of people playing it,” Toto said. “When (developer) Mixi had to make a decision to pick which country to launch it outside of Japan first, it didn’t pick the USA, but Taiwan instead. The game did okay though it didn’t blow the competition out of the water; it really depends on how aggressive the game can get in its advertising and marketing in the next few months.”
Toto said that Mixi had a contract with Tencent to bring the game to China, though there’s no word on an English version at this point in time.
Concerning Chain Chronicles, the game would do way better in Asia than in other English-speaking territories. According to Toto, the American market will find it ‘too cute and too Japanese’.
The top trend in gaming? The separation of the casual and core market.
“A lot of people are saying that mobile games are getting hardcore,” said Toto, “with titles like Fates Forever, a mass multiplayer online role-playing game on tablets only. These are just experiments. The games that do well; they’re not going to be hardcore.”
“If you look at the Japanese market, the top games are very casual and they’re played in very short bursts until your train comes or stops at your destination. Lighter games that are played in quick rounds with one finger; that’s the current concept that rules the business at this point in time, ” he added.
Mobile gaming is escalating at a shocking pace.
Throughout the years, the console gaming numbers in Japan have always stayed on middle ground despite the rumblings from Media Creates charts. However, there is no basis for discussion when comparing mobile gaming numbers with console gaming, according to Toto. “(Mobile gaming) is rising higher and higher by the year. The transition was more apparent at last year’s Tokyo Games Show where 30 per cent of the show floor catered to the hardcore,” he said.
Toto brought up the ‘heat map‘ on the Tokyo Games Show that shows the amount of people turning up at a particular section of the exhibition’s hallway. The redder it is, the more people have visited the place. Mobile game booths are getting more red hotspots than game companies with console games. “It’s like a virus,” said Toto. “Last year was a bit of an exception due to the showcasing of the new PlayStation and Xbox consoles, but this year the mobile games status quo will revert to mobile gaming’s favour.”
Bandai Namco is ahead of the mobile gaming curve among the old-school companies.
“If you look at companies like Capcom and Tecmo Koei, among all of them, Bandai Namco is doing the best job,” said Toto. “The company views video games and mobile games as completely different. Its secret sauce is its anime intellectual properties like One Piece to help stand out,” said Toto.
It also helps that Bandai Namco, after being in the traditional business for so long, can adapt and also have a huge marketing budget to spread the word across. Which leads us to the one big crux of the business:
Have a big marketing budget
Let’s face the fact: there are so many games out there on the App Store and Google Play that companies need to stand out and even trumpet their presence and products the loudest to get noticed. “The biggest problem in the mobile games business is user acquisition and marketing,” said Toto. “There are so many games out there in the market. You need a big marketing budget; if you don’t have it as a mobile game developer, good luck.”
If a company does not have a sizeable amount, it will need unbelievable access to PR and an unbelievable product that can’t be copied if it needs to even go toe-to-toe with the giants. “A lot of people asked why Kantan Games isn’t making games,” Toto said. “I would tell them that yes, that would be a childhood dream come true. The reality, however, is that burning the money that I have and the energy of the talent I hire will not be enough to fight against the high-level competition in Japan with bigger marketing budgets.”
Nintendo will eat away from its US$9 billion dollar savings for not evolving
One would think that the most famous of all Japanese game companies, Nintendo, would be experiencing a windfall and would think ahead. In game design, yes, but not so much in capitalising the current mobile gaming market.
Its new console, the Wii U, is a dead cause according to Toto. “It’s undeserved, as it’s a nice machine though it didn’t blow my mind away. I love Nintendo been brought up with the culture at a young age, but the Wii U is a failure. Even with the figures and the recent E3 Direct Video conference, the console will only have one or two new noteworthy games. And even its big title, Super Smash Bros., will be out for the Nintendo 3DS and Wii U; the former version will come out earlier and will cannibalise its sales.”
In this precedent, Nintendo will not do smartphone content because of its old-school mentality. Toto said that it’s a typical conservative Japanese company focussed on its heritage and branding. “Nintendo has been asked this question many times, and its response is: ‘We are Nintendo. We are the first and only company left that integrates platform and content in a bundle. We are controlling the entire distribution up to the end user. All of these things are bundled by Nintendo’.”
“The company doesn’t want to see Mario on a US$30 Android machine. Nintendo’s too proud to even picture that kind of future for itself.”
With that much money it’s sitting on, at least it can afford to be stubborn and sit out with the Wii U and its handful of games coming out in the next few years. “There needs to be something radical going on (at Nintendo) if we are to see a Mario or Nintendo-sanctioned game on mobile devices in 2015 and 2016,” said Toto. “The Wii U being a failure is rather big, and Nintendo’s not even budging from that. It has to be something larger than that.”
So what’s next?
With all these pro-tips out in the open, e27 hopes that budding developers at least take heed before diving into unknown territory. As for Kantan Games and looking forward? “At the moment, yeah, we’re sticking to Japan,” said Toto when asked about expanding beyond the region. “The country is so specific and dynamic, as well as a complex market for games. It’s a big ocean of platforms, devices and content. This justifies me sticking to this very market, offering the best advice I can.”