Combined operating income of Japan's major game companies

Japan game market disruption: GungHo + DeNA + GREE overtake Japan’s game icons

Japan game market disruption: new smartphone game companies overtake Japan’s game icons like Nintendo in income

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Since last financial year (ended March 31, 2013), three newcomers (GungHo, DeNA, and GREE) combined achieved higher operating income and higher net income than all 9 iconic Japanese game companies (Nintendo + SONY-Games + SegaSammy + BandaiNamco + Konami + TakaraTomy + SquareEnix + Capcom + TecmoKoei) combined.

While the newcomer’s revenues are increasing (except for GREE), the traditional 9 game companies’ revenues peaked in 2008, and have been falling rapidly ever since.

Clearly Japan’s the 2003-2005 mergers in Japan’s game sector did not make the sector “future proof” – more dramatic changes will be either initiated by the iconic incumbents, or imposed on them from newcomers such as GungHo.

Note that the position of foreign entrants remain weak in Japan’s game market overall.

Read more in the article below or in our report on “Japan’s game makers and markets”, and in the following post “Brutal disruption of Japan’s Game Markets”.

Three new game companies (GungHo, DeNA, GREE) overtake Japan's 9 iconic game companies in operating profits
Three new game companies (GungHo, DeNA, GREE) overtake Japan’s 9 iconic game companies in operating profits (note that the last data point for 2013 for GungHo is only for the first 6 months, i.e. full year results will show that the “new” game companies are doing even better compared to the “old” game companies than visible in this figure) Source: https://www.eurotechnology.com/store/jgames/
Three newcomers (GungHo, DeNA, GREE) achieve higher net profits than all 9 Japanese game icons combined
Three newcomers (GungHo, DeNA, GREE) achieve higher net profits than all 9 Japanese game icons combined (note that the last data point for 2013 for GungHo is only for the first 6 months, i.e. full year results will show that the “new” game companies are doing even better compared to the “old” game companies than visible in this figure) source: https://www.eurotechnology.com/store/jgames/

Japan game market disruption: online and smartphone came company GungHo with Puzzle and Dragons

GungHo started as OnSale KK, a joint-venture between SoftBank and the US company OnSale Inc., the purpose of this JV was Japan market entry for this US company, an ecommerce company.
OnSale KK pivoted from ecommerce to games and started to distribute the Korean game Ragnarok and others, and changed its name to GungHo.
GungHo’s breakthrough came with “Puzzle and Dragons” – Jan-June 2013 operating profits increased 4050.1% (four thousand fifty percent) compared to the same period one year ago. GungHo is part of the SoftBank group.
More in our report on “Japan’s game makers and markets”

Japan game market disruption: GREE

GREE on the other hand – although a successful new venture in Japan’s game sector – is not doing so well currently: reported revenues and income have both been falling. Essentially, GREE has difficulties to implement the plan to build a global business based on their Japanese methods and business models. The factors are both “hard” and “soft”, i.e. business models, and human factors.
Details on GREE’s performance, and reasons for GREE’s current issues in our report:

Copyright 2013 Eurotechnology Japan KK All Rights Reserved


Comments

9 responses to “Japan game market disruption: GungHo + DeNA + GREE overtake Japan’s game icons”

  1. Stealth Avatar
    Stealth

    Who cares. That has nothing to do with quality product. Nor can you really compare when Nintendo has hardware costs.

    1. true. but we are not talking about hardware costs here. our blog is about the health of the companies overall.

      1. And that cost is tied to revenue.

        Ask any one of them to make hardware and see what the health is

      2. SiliconNooB Avatar
        SiliconNooB

        It would seem that your story about gaming finances has upset the delicate worldview of a gamer.

  2. arkane9 Avatar
    arkane9

    Could someone inform me of what mobile games are the most popular in Japan? Is it more of the casual puzzle like games or are traditional gaming experiences also profitable over there?

    1. Mr/Ms arkane9:

      as you can see on page 109 of our J-Games report ( http://www.eurotechnology.com/store/jgames/) the No 1 genre popular in Japan are role playing games with about 40% of Japanese people saying that this is the genre they like most. Second place with about 8% are strategic simulation games. Hope this helps. Contact us if you need more help.

      1. That looks very comprehensive. Thank you.

  3. […] Det fortæller den dygtige Gerhard Fasol med tal og tabeller på sin blog Eurotechnology Japan. […]

  4. […] Nintendo, Sony, SegaSammy, BandaiNamco, Konami, TakaraTomy, SquareEnix, Capcom und TecmoKoei, berichtet die Beratungsgesellschaft Eurotechnology. Gree startete als soziales Netzwerke für Spiele, DeNA begann mit Auktionen auf dem Mobiltelefon, […]

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