For a good portion of the 1980s and 1990s, Japan was the dominant country in producing video games thanks to many of the big name hardware (Nintendo, Sega, and Sony) and software (Capcom, Konami, and Square Enix) companies being from there. In recent years, other gaming companies around the world that are both in developing and publishing have become increasingly competitive to the point that some Japanese developers feel it threatens Japan’s position. Keiji Inafune, the creator of Megaman, is one authority that has expressed pessimism over Japan’s global influence in gaming. How did this happen? How did this affect the changes in Japanese gaming to this day? Read today’s Editorial Tuesday to find out.

The Rise of Japanese Games

As stated in our "The History of Video Games" Editorial Tuesday, the video game crash of 1983 in the US was what paved way for Japan to take over. Upon the crash, the market was oversaturated with video games and some of the anticipated killer app titles turned out to be colossal failures, most notably Pac-man and ET. A couple of years later, Nintendo found effective ways to market their debut console to Americans in a way that would erase the stigma video games had and would become an international juggernaut. After that, other Japanese based companies such as Sega and Sony would enter the market with their respective consoles and their own iconic advertising campaigns you can check out on YouTube for nostalgia, or for a great laugh for you younger readers.

The Arcade Industry

If there were one strong factor into why Japan’s gaming international influence has declined, it would certainly relate to the arcade industry going the way of the dinosaurs in Western countries. Up until the end of the 1990s, arcades were the best places to enjoy state of the art video games since home console and PC hardware weren’t as advanced at that time in providing the same novel experiences. As most of you can easily conclude, a strong majority of arcade developers happen to be Japanese companies, most notably Sega, Namco, and Capcom. Starting from the 2000s, the quality of home consoles and PC gaming allowed itself to match or even surpass arcade hardware and presentation. Then shortly after, Internet gaming would become part of home gaming, and Western gamers didn’t have to go to their local arcade to play against a stranger for some friendly competition. Shortly after, arcades started to die out in the US but they are still going strong in Japan.

As for why arcades continue to be a success in Japan, it is because the population density and transportation system in places like Tokyo allows for such easy access. Also, home and land space play a big part on why groups of friends can get together and play in the arcades in Japan. For some of you American gamers, you probably have the space in your living room to get at least five friends to get together to play some games or have a LAN party. Unfortunately, Japanese homes don’t allow that kind of space so if kids want to play multiplayer in person, they’re going to have to go to the arcade.

Behind in Adapting and Cultural Differences in Business

Looking back, Japan was slow in entering Internet gaming for understandable reasons that apply to them domestically. Some good reasons on why they didn’t adopt early enough is because the high-speed broadband internet wasn’t widely available at the start of the millennium as it was in a good portion of the US, so a good majority of the population was still using the 56K connection. In the US where high-speed Internet services were available, non-Japanese popular genres such as first-person shooters and Western-style MMORPGs started to flood the Western market and made non-Japanese gamers lose interest in games coming from Japan. Upon the release of the PS3 and Wii, Japanese companies have progressively entered the online genre with some notable games such as Final Fantasy XIV and Phantasy Star Online 2.

As an extension, Japanese companies such as Sony and Nintendo were also slow in creating online stores and services, while Microsoft had their live service since the first XBox. The reason why digital downloads were slow to come to the Japanese market is that Japanese gamers still like the novelty of owning physical copies because of the extra goodies that come with special releases. In addition, the used game market from retro to modern is still pretty strong in Japan so the incentive to buying a downloadable copy of an older game on a service for modern consoles doesn’t have the same novelty it has for Western gamers.

Another cultural reason why international companies are succeeding with online is that countries such as the US have a different value of entrepreneurship and capitalism compared to the Japanese. Ever since the beginning of the bubble economy, the Japanese have placed a strong emphasis on getting permanent employment at a reputable company, and for those that want to get into gaming, some of those companies could be Nintendo on Konami. Due to this mentality, many younger developers don’t have an incentive to start their own companies in comparison to their American or European counterparts who grew up knowing the power of the Internet. However, as you can see in recent news, some of the veteran Japanese developers such as Keiji Inafune, Hideo Kojima, and Yu Suzuki are going independent in order to find their own creative potential though they don’t have the solid financial backings of the companies they helped make reputable.

From Consoles to Mobile Devices Due to Lifestyle Choices

According to some surveys in the Japanese media, console sales have gone down various double-digit percentages in the past decade. While the Switch and PS4 continue to find success in Japan, it’s not the same as it was in the eighties and nineties. But just because console gaming isn’t as big as it was a decade ago doesn’t mean gaming altogether is dying in Japan. The answer to this is conclusively obvious, it’s all because of the availability and ownership of mobile touchscreen devices whether they’d be smartphones or tablets. According to some domestic surveys, more than half of smartphone owners in Japan happen to play games on them. The reason why mobile games can succeed in Japan is all because of Japanese lifestyles.

While a large majority of Americans commute with their own personal vehicles, many Japanese residents in metropolitan areas such as in Tokyo or Osaka tend to take the train. A good percentage of Tokyo employees are commuting from neighboring residential prefectures such as Saitama, Chiba, and Kanagawa so on average, their train rides between home and work could range from 90 minutes to two and a half hours. While the trains can get packed (and with Japanese etiquette requiring you to refrain from talking on the train), in some instances, you can have space to take out your phone, tablet, or other portable gaming device and kill time by playing some games.

Many of the mobile games dominating in Japan tend to be JRPG or music games, genres that are friendly for mobile devices and suit domestic tastes. In addition to generic touchscreen mobile devices, portable consoles such as the DS and the PS Vita have a stronger user base in Japan thanks to these lifestyles and a majority of its available library suit what Japanese gamers love.

The Increasing Aging Population Affecting Other Industry Trends

If there were one significant societal reason that factor into the changing of gaming in Japan, it would certainly be the low birthrate and the progressing elderly population. Some say because of lesser children, it is one reason why console sales have decreased in addition to the current state of the economy, and the progressing preference of portable gaming. With a lower birthrate, it consequently decreases the workforce so fewer people will be making games in the foreseeable future in Japan requiring the nation to hire from overseas.

Due to having a significant adult and emphatically an elderly population, pachinko gaming all around the country is still pretty big to the point that Konami announced around 2015 that they would be focusing on that instead. In fact, just about every big name anime franchise new and old have a pachinko game from Maison Ikkoku to Evangelion. Unfortunately, this form of gaming tends to be exclusive to Japan.