With more than 70 million gamers, Japan is a key market for game developers—but you need to understand the market to succeed here.
Presented by Xsolla
Game developers with an eye on global growth need to pay attention to Japan. With more than 70 million gamers, according to Research and Markets, Japan’s video game market is nearly as big as North America’s. This can translate to serious growth and revenue—if you know how to approach the market.
Like any region, Japan has operational nuances that can have a big influence on your success. To position your game for the greatest success, you need to familiarize yourself with the country’s unique payment systems, payment regulations and communication laws—even cultural expectations.
This is no small task for already-busy game developers. To save you time, resources and frustration, we’ve rounded up some best practices for accelerating growth in the Japanese market.
Did you know that Japan is one of the first countries to regulate virtual currency? As part of a 2016 Payment Services Act amendment, any unused balances that equal 10 million Yen or more have to be reported to the authorities, or expire within six months. As a game developer, you’ll need to build the appropriate notifications and tax reporting into your game experience and operations.
Another important regulation is Japan’s Consumption Tax, which places an 8% tax on any company doing business in Japan without a physical presence. If you fall into this category, you also need to appoint a Japanese tax accountant for all communications between the company and the tax administration. When working directly with local payment providers, It’s up to you to request tax reports to make sure those taxes have been paid.
Japan also has a law that makes it illegal to send unsolicited commercial emails. Businesses—including games—need to get email consent from recipients. What’s more, you need to keep a record of that consent for the three years starting from the date the last email was sent.
It will obviously be tough to grow your video game if you don’t offer it in your target market’s native language, but did you know that localization is regulation in Japan?
To do business here, your game and related websites need to be in Japanese, with all transactions in the local currency. Failure to comply comes with real risk—a dissatisfied player could contact the National Consumer Affairs Center, which might result in your game and studio being fined or even banned from the country.
Credit cards and PayPal only reach around two-thirds of Japan’s massive audience. In a country of 70 million gamers, you’ll miss out on a big share of revenue if you don’t support other payment types.
Among those you’ll want to enable is Webmoney, an online payment method similar to a debit card or prepaid card. Webmoney represents as much as 10% of the market opportunity, according to Xsolla analyst research.
Cash is big in Japan, too. As much as 20% of the Japanese e-commerce market uses Konbini, a cash payment system that allows shoppers to make purchases that they pay for later at ATMs or convenience stores. Though Konbini has a smaller market share than credit cards, our data shows that the average Konbini purchase is twice as big, making it an important payment type.
Direct carrier billing offers another meaningful opportunity to grow your audience in Japan. This “mobile wallet” is convenient and popular globally, despite high fees. The fees are lower in Japan, which is why you’ll have an easier time growing your audience if you support it.
New markets can be overwhelming, but with the right resources and support, you can navigate them more efficiently and with a lot less frustration. Xsolla has been in the Japanese video game market since 2011, so we can help you work through the details to maximize growth. To get more essential information on Japan’s video game market, download the free ebook from Xsolla’s video game experts, How to Grow Your Video Game in Japan.
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