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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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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.


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