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

    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

    [日本語版はこちらへ]

    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 (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 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 (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 (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:

    Japan’s game makers and markets (32nd edition) – disruption by smartphone games

    Copyright 2013 Eurotechnology Japan KK All Rights Reserved

  • Japan game software industry consolidation

    Japan game software industry consolidation

    Japan’s historically grown game companies are global superpowers

    Shrinking traditional home video game software market and paradigm shift to online games, network games and mobile games forces consolidation

    by Gerhard Fasol

    Japan’s mobile game software companies are global superpowers. They are all historically grown and linked to other industry sectors, such as characters, arcade games, pachinko (pinball parlor) machines. Japan game software industry consolidation is driven by an emerging paradigm shift from traditional home video games to a new world of online games, network games and mobile games.

    For details read our Japan game market report (398 pages, pdf-file):

    Japan’s game makers and markets (32nd edition) – disruption by smartphone games

    Landslide shift underway to network games, online games and mobile games

    While the market for traditional home video gamesoftware is rapidly shrinking, a landslide shift is underway to network games, online games and mobile games.

    These changes bring consolidation. Some recent mergers are:

    • Bandai acquires Namco
    • SEGA (game arcades) and Sammy (pachinko) merge
    • Takara and TOMY merge
    • Role playing game leader Square-Enix (itself a merger of Square and Enix) acquires the larger TAITO
    Consolidation of Japan's games sector
    Consolidation of Japan’s games sector

    The Square-Enix deal is particularly interesting because it underlines the Japanese preference for role playing games.

    Japan game market report (398 pages, pdf-file):

    Japan’s game makers and markets (32nd edition) – disruption by smartphone games

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