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Japanese market share of western game market falls to 20%

Japanese market share of the Western game market has been reduced to 20 percent according to an analysis of the Japanese gaming industry by the CESA. The decline is significant as Japanese game development used to maintain a dominant position in the industry especially for home and portable console game development.

The speed of the decline is also noteworthy as the decline has become impossible to ignore during this generation of home consoles which are roughly 2 to 3 years old.

In October of last year, Square Enix president Yoichi Wada declared that Japan had "lost its position" as the leader in the video game industry. These claims are being backed by evidence which shows the market share for Western-developed titles in their own territories doubled between 2004 and 2007 while Japanese game market share has declined.

Although market share has declined, data summarized by Kotaku revealed the news is not all negative as revenue generated from Japanese game exports overall have increased by 43 percent year on year in 2006 and by 54.3 percent in 2007. The success is attributed primarily to the success of the Nintendo DS and Wii hardware.

According to a senior analyst at Nomura Finance, there are several causes for the decline in Japanese game development. He suggests RPG games which Japanese developers tend to focus are not as popular in the west. He also suggests the right to develop games in potentially lucrative areas such as sports or popular movie franchises is tightly controlled. 

Nomura also states since the successful launch of the Microsoft Xbox the quantity and size of the competition in the field of game development has increased significantly making it more difficult for Japanese game developers to maintain significant market share.

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larger market
By Moishe on 1/26/2009 9:04:08 AM , Rating: 4
The larger market that is open in the west and the fact that the popular consoles are not primarily Japanese are the biggest factor.
Games are a business and the largest pot of money is in non-Japanese style games. Due to competition in the market, the Japanese game developers need to branch out to doing western style games as well as Japanese style games.

RE: larger market
By Bateluer on 1/26/2009 9:16:09 AM , Rating: 2
Its also a more competitive environment. A title that sells well in Japan won't necessarily sell well in the US or Europe and vice versa.

There will still be plenty of quality titles coming out of Japanese studios in the foreseeable future, but its a global market. You need to have products that appeal to more people. This is a blessing and a curse though, as a lot of mass marketed titles are utter garbage but still still well because they target the lower common denominator.

RE: larger market
By MrBlastman on 1/26/2009 10:07:57 AM , Rating: 4
I would also begin to argue that the age of the median gaming demographic in the United States is growing older. Generally, a lot of Japanese games (at least the popular ones) seem to be targeted at either a younger age group or a culture that is different than ours. Don't get me wrong, I'm 33 and I still enjoy Japanese games (though to be fair, I've grown out of their RPG style, PC RPG's just offer so much more), I think they need to mix things up a bit.

How about another sequel to Thexder for starters, or Zeliard? That'd be a good place to start. ;)

RE: larger market
By StevoLincolnite on 1/26/2009 10:09:05 AM , Rating: 4
First thing is first though, they actually need to release some big block-buster Japanese RPG games for the Xbox 360, even if it is Ported from the PS3, see how things turn out with Final Fantasy I guess. (Would be nice if they released some for the PC to!)

RE: larger market
By afkrotch on 1/26/2009 11:03:00 AM , Rating: 1
There's actually quite a few J-RPGs for the 360. Problem. They never went to the states. The only ones that have suck beyond belief.

I think majority of your RPGs are going to go to the PS3, as Japanese pretty much didn't bother with the 360. Also your Japanophiles seemed to go PS3 also, or at least the ones who could afford too.

RE: larger market
By FITCamaro on 1/26/2009 12:22:42 PM , Rating: 2
Star Ocean 4 looks like it'll be pretty good.

RE: larger market
By Zapp Brannigan on 1/26/2009 12:53:16 PM , Rating: 3
Weirdly enough the 360 has more JRPG's out at the moment then the PS3. The only ones i can find on the ps3 are Eternal Sonata and Enchanted Arms, which are both out on the 360 as well. The 360 has The Last Remnant, Infinite Undiscovery, Tales Of Vesperia, Blue Dragon and Lost Odyssey.

That being said, none of those games are sequels to already established games, there isn't a suikoden or a final fantasy that would boost sales, as new franchises are hard to get going, especially in the increasing niche (apart from final fantasy) JRPG market.

RE: larger market
By WTFiSJuiCE on 1/26/2009 3:55:36 PM , Rating: 3
As far as 360 goes, you also forgot Spectral Force 3, which is a sequel, as well as Operation Darkness and Phantasy Star Universe.

Valkyria Chronicles is hands down the best RPG on the PS3 so I'm really not sure how you could miss it if you were looking for PS3 rpgs. IMO, I haven't seen a JRPG for this current generation of consoles that has been better.
I can only hope that White Knight Chronicles lives up to its hype despite the mediocre Famitsu rating it got (Although people have been saying that Famitsu was crazy for the rating they gave, so I dunno).

PS3 also has Disgaea 3 alongside Eternal Sonata and Enchanted Arms.

RE: larger market
By daar on 1/27/2009 1:11:35 AM , Rating: 3
Problem with JRPG's these days is they try too hard to be 'epic' without focusing on telling a good story, or have juvenile plots along with predictable characters who spout lines that get cornier with a new release. The designers also seem to have some strange fetish with long bastardized medieval Euro-names along with giving most characters some weirdo Japanese eye-surgery. Oh I miss the days of JRPGS like Earthbound, FF6, and Chrono Trigger....oh and the DQ series before 6...

RE: larger market
By eraidesigns on 1/27/2009 12:42:00 AM , Rating: 2
I am going to lay it all out for everyone since I live here in Japanland and have been following this issue closely as I made the mistake of buying a PS3 and got screwed.

Japanese society is all about forcing uniformity. Some of you may have heard the expression "the nail that stands up gets hammered down." Hence, change does not come easily to people and institutions here. Of course this does not work well with the competitive nature of international buisness. The only reason the economy here is not *yet* totally in the crapper is because cultural differences and massive government protections allow the domestic market to slump along in its backward, inefficient way.

As for games, the problem is that Japanese companies mostly refuse to change. Nintendo is the only really different company out there and they are only that way because Sony forced them into a bad position during the N64 vs Playstation era. They survived only through adaptation. Look at what happened to Sega! They refused to change and had to give up the hardware market all together. Moreover, the rest of the game companies are sticking to making the same old -and not even dressing it up! Here in Japan there is a dearth of new games and most of the ones that have come out look like ports from the PS2 days! They do not even take advantage of the new hardware! Also Japanese companies can be really tight-fisted and do not like ot offer much extra content or online funzy stuff which I think a lot of people in the US come to expect. (Look at the astounding success of XBOX live compared to the utter failure that is Sony's immitation.)

The other thing that is holding Japanese companies back is their reluctance to embrace the computer. Basically, most (maybe all) Japanese game companies think ONLY of the domestic market and selling their games abroad is an after-thought. Computers are still a foreign concept in Japan so the companies here do not make PC games. This is a huge market in the rest of the world which they are totally missing out on.

RE: larger market
By afkrotch on 1/27/2009 10:54:53 AM , Rating: 2
Huh? Exactly where do you live in Japan? I lived there for 2 years and there are a huge number Japanese games for PC. Usually just fighters, visual novels, or eroge. They don't go real high end with their PC games, cause majority of the Japanese go with consoles for their games.

Your Japanese public play games in arcades or on consoles. Wouldn't make much sense at all for them to pump a lot of money into PC games, when there's few using them for such.

I have a PS3 that I bought in Hamura, Tokyo. Not once have I felt that I got screwed. I also bought an Xbox 360 in Tokorozawa, Saitama. Felt a little screwed, mainly cause it broke and was stuck getting another one and another one after that.

Sega didn't die from refusing to change. They died out in the console market, cause they replaced their consoles too damn fast. Cause of that, developers refused to make games for their system. No point spending years to learn the in's and out's of a console, only to see it get replaced by another.

RE: larger market
By The0ne on 1/27/2009 1:06:06 AM , Rating: 2
It's not easily to "try" to design a game to suite another country's "taste." This is an obscure area and even if you have some sort of figures to use it's not going to help much. For the smaller development companies out there you're not going to have the resources or the money to even consider it.

I'm very grateful that the DS, PSP and Wii are still doing great. What this means is that these small companies can continue to crack out games and have more time to focus their efforts into making them into better games; not just by rushing and releasing crappy games as we've seen during the PS1 days.

Even without what I've just said, development cost has skyrocketed while many things stayed constant. Profits hasn't change much, salaries are still somewhat the same, etc. I would have to think these companies would have to come up with a solution that has not been looked into yet to be able to survive and provide. How things are done back then and their relative cost itsn't the same for today, it's worst.

As far as RPG's go, I'm not even going to start this topic again because "older" gamers seem to think the "turn-base" RPG's like Final Fantasy are sh*t while at the same time claiming they're number one fans of SE or the games themselves.

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