As the cradle of game design, the birthplace of many world-renowned franchises and even entire genres, the gaming industry in Japan has long been considered the benchmark. To this day, the Japanese market remains one of the most influential and promising in the world, second only to China and the United States in terms of volume. Here at Inlingo, we’ve put together a detailed analysis of the gaming market in Japan. Let us tell you what made this country an industry titan, and what developers who intend to conquer it should bear in mind.
The market’s key characteristics
- A large and solvent audience
According to estimates by numerous agencies, over half of the Japanese population are gamers. Moreover, Japan ranks first in the world in terms of the percentage of paying consumers. This can be explained by the audience’s unique characteristics. While the vast majority of gamers in Western countries are youngsters, 64% of all players in Japan are aged 25-45—the most solvent age group.
- Isolation from the wider world
Japanese players are used to local talents, many of whom don’t even venture into the international market. With limited knowledge of English, they prefer to play in Japanese, which poses a serious obstacle for unlocalized games.
- Consoles are much more popular than PCs
PC gaming in Japan accounts for less than 10% of the overall video game market. Many Japanese gamers play exclusively on console. The console market there is highly developed and much more popular than elsewhere, largely thanks to the Japanese portable Nintendo Switch console, which has a lot of exclusive local titles.
How it happened: the historical context
As in the USA, the video gaming industry in Japan owes its existence to the slot machines of the 1970s and ’80s. They enjoyed enormous popularity. The titans of the modern Japanese gaming industry (Nintendo and Bandai Namco) started out developing arcade games. We have them to thank for plenty of iconic and instantly-recognizable games, characters, and franchises, such as Pac-Man, Mario, and the aliens from Space Invaders.
The craze for arcade games left American and Japanese developers no choice but to come up with a portable version of the slot machine—that’s how consoles first appeared. This triggered a real boom in desktop and handheld devices. And so, Japan’s legendary 1977 Atari 2600 console sold over 30 million units. The American market for home gaming consoles soon became oversupplied and collapsed in the historical video game crash of 1983, also known as the “Atari shock.” This played right into Japan’s hands: for two decades, the country held a monopoly in the world of console gaming, mainly thanks to high-quality consoles produced by Nintendo, Sega, and Sony, which all remain among the industry leaders.
Consequently, American developers switched to PC gaming while the Japanese kept up their traditional console approach. The local gaming market’s remarkable course of development is also reflected in the Japanese audience’s gaming preferences. As a result, a huge amount of the genres and franchises beloved by players across the globe were launched in Japan. But Japanese players are used to playing local titles on their consoles, and the number of PC gamers only began to rise in the late 2010s.
Additionally, thanks to the market’s rapid and successful development, video game culture has become an integral part of Japanese life for people of all ages.
The current Japanese gaming market: statistics and trends
In terms of profits made by the video game industry, Japan ranks third behind such giants as China and the United States. According to Statista, the market size in 2021 was estimated at $18.2 billion. By 2025, the industry’s revenue is expected to reach $24 billion, which is four times bigger than the market size in South Korea, India, or the United Kingdom.
Player portrait
According to a 2023 survey, around 56% of Japanese people play on at least one device. In Japan, there are almost as many female gamers as male, as well as many older players. Among citizens aged 30-49, more than half play on at least one platform. However, there are still more gamers in the 16-29 age group (around 66.5%).
Platform preferences
Mobile gaming is Japan’s main platform. The mobile gaming industry in Japan is experiencing swift and stable growth.
In recent years, the proportion of players who prefer PC gaming has also begun to grow. Experts have connected this with the coronavirus pandemic, which saw increasingly more people in Japan take up gaming, including those who had never owned consoles. During this time, Japanese publishers began releasing titles on Steam that had previously been exclusively console-based, and as a result, the number of PC players surged from 11 to 16 million.
Genre preferences
Japanese gamers mostly play to relax or kill time—this is the main motivation among all age groups. However, younger players (aged 16-29) also mention that they’re drawn in by the chance to discover open worlds and enjoy their in-game achievements. Hence, logic and puzzle games are generally in the lead among the Japanese audience, but younger players prefer various RPG titles and games that fall under the “battle royale” umbrella. More often than not, women prefer casual games and simulators, with dance and music games enjoying particular popularity among young women.
Gaming preferences
Generally speaking, Japanese players choose local franchises, regardless of their preferred platform. For instance, Pokemon, Legend of Zelda, Final Fantasy, Animal Crossing, and Persona are especially popular.
As a whole, foreign titles and franchises are little-known in Japan. In recent years, however, local developers have been actively squeezed out of the picture by their rivals in China and South Korea, as demonstrated by the success of such mobile giants as Knives Out and Genshin Impact.
Audience solvency
On average, Japanese players spend approximately 150 dollars per year on video games, three times higher than their American counterparts. The Japanese are very willing to spend money on gaming, including on microtransactions and mobile games. However, a mere 8% are prepared to pay a subscription fee (e.g. World of Warcraft), the majority opting instead for free-to-play and pay-to-play games.
Localizing games for the Japanese market
According to various agencies’ estimates, only around 20-30% of Japanese people speak English, and Japanese gamers are used to playing in their native language. This is why Japanese players really appreciate high-quality localization, but that is often not an easy feat. Localizers find themselves needing to navigate several major pitfalls in order to avoid visual, technical, contextual, and cultural contradictions. Here are a few points that demand special attention when localizing into Japanese.
Using the right kinds of Japanese and English for gaming
Even from the very beginning, English words have traditionally been used in Japanese games. Such words include terms that all gamers are familiar with, such as player, start, ready, or game over. And they’re sometimes written with mistakes, because these are the spellings that all Japanese players have become accustomed to. There’s a particular version of the Japanese language: yakuwarigo, or “role language,” which is commonly used in pop culture. Localizers have to know and take into account all of its characteristics and use them properly in their work.
Differences in the size and length of words
In Japanese, it’s possible to shrink several sentences into a couple of characters, and so the character limit stated for the English version, for instance, is never exceeded. Aside from this, Japanese characters are visually larger than capital letters in European languages. This should be kept in mind when working on a game’s interface. Extra space should be afforded to ensure that characters can fit into its elements.
High-context language
It’s impossible to achieve a fitting translation without knowing the characters’ ages, genders, and the relationships and hierarchy between them. Otherwise, there’s no avoiding comical or simply odd moments where characters’ speech is at odds with their personalities or backstories. Read more about the specifics of gender roles in Japan and how they’re reflected in the language in this article.
Cultural differences
Tattoos in Japan are a hallmark of the Yakuza mafia, not simply decorations on the body. And giving white flowers as a gift to a sick person is bad form, since they can be considered as a veiled wish for that person’s death. What’s more, Japanese internet culture is radically different from the Western one, and this also needs to be taken into account during the localization process, since jokes and references need to be replaced with ones that the Japanese audience will understand.
These, along with many other nuances, explain why high-quality localization into Japanese is such a high-priced commodity. To successfully navigate all of these potential pitfalls, developers need to provide localizers with as much context and creative freedom as possible. Doing so will make their projects much more likely to win the hearts of the Japanese audience, trump local talent and franchises, and perhaps even repeat the success of Genshin Impact. As of December 2023, this game had racked up 2.37 million downloads in Japan, and the average income from each download worked out at over 90 dollars.
We’ve written a whole separate article about how to prepare games for localization into Japanese. Check it out to read our detailed recommendations and lifehacks for developers.
