Japanese bleak market analysis (why's the US so healthy?)

[GaijinPunch]

Original Thread (http://dynamic5.gamespy.com/~japangaming/forum/viewtopic.php?p=4742#4742)


MSN Japan reports that the Japanese toy and game market continues to fall due to effects from lower birth rates. Not only because there are fewer hits, but also the new generation's income is not growing, and people are "spending money on education rather than toys" (Yano Economic Research). Also, there's a rise in population of young people buying makeup and using mobile phones who have less money to spend on toys and games.

Continuing it's downfall from it's peak year in 1997 as a 1.6 trillion dollar industry, [overall spending] fell 1.7% of the previous year to 1.2 trillion yen. Due to deflation, competition among electronic outlets is growing fierce. It's also said this trend is caused by a lack of hit pproducts, even though various new products are being released.

Now over 20 years after Nintendo introduced it's Family Computer, "the new feel of video games is being lossed." (Computer Entertainment). Game publishers are also finding their energy zapped from from development costs, currently averaging 20 to 30 million yen (roughly $200,000 - $300,000 USD) per game.

Source:
http://www.mainichi-msn.co.jp/it/game/news/20050502org00m300044000c.html

So why's the US games market doing so well? Even the Japanese makers have better sales figures in the US for some of their franchises (or at least equallish). Do video games still have that "new" feeling amongst westerners? Do we have that much higher of a birthrate? (Japan's is EXTREMELY low, btw). I really don't follow market trends of anything retail, but this article was interesting. I'm sure there's a lot of answers to my questions, that I'm just too lazy to dig up.

Anyways, thoughts?

[briguy578]

The US's birth rate is way way higher then Japan's. Japan's is only 1.1 children / couple. Its 1.9 / couple in the US [The US's population is still increasing because of lengthening life spans and immigration]

Also, if you look at the grand cycle of things, the US videogame industry is on the resurgence. For the first time since the Colecovision in 1982 one of the major consoles manufacturers is based in the United States. The weak dollar helps Microsoft compete against Japanese-made competition. This is why the US market isn't shrinking.

The Japanese market is still really reeling from a 10 year long economic downturn. The lack of a stable government [I think they go through 2 or 3 prime ministers a year] has meant that there hasn't been a cohesive economic recovery plan that has really addressed the corrupt banking system at the root of the problem.

As long as the Japanese economy and banking system suffers, all forms of leisure expenditures will probably suffer.

[GaijinPunch]

NOt necessarily... well, it's more complicated than that. They've done all sorts of counter measures about the leisure industry taking a hit. Many Japanese holidays were changed from a date, to a specific day of the week. Many more 3-day weekends. It was a pretty big deal though when it was done.

As for the prime minister thing... Koizumi holds the most recent record for longest in office. Mori, the guy before him, was a fucking joke. I don't really think their switching prime ministers is the reason why their economy isn't reforming. It's decades of tradition that big whigs (not just in the government) won't let go of. Kind of goes beyond the scope of this thread.

Also, in Japan's defense (or maybe not) then yen has had WAY more fluctuation than the dollar in the last 6-7 years. Should've given the Japan publisher's a bit of edge if they played it right. I know yen-dollar has gone from 110 to 148 back to 110 and then between 120 and 130 a few times between 1998 to present. Weak dollar really isn't the issue (at least in this topic). Microsoft's success in Japan is a moot point. :)

[slownerveaction]

Maybe it's because I've paid more attention to world events post-9/11 or maybe it's because he really does bear a slight resemblance to Richard Gere... but Koizumi has stuck out in my mind as one of the most high profile/notable Japanese PMs....

It's a difficult problem to diagnose, besides the usual reasons (Japanese recession, greying of the population). Two reasons I don't think are usually mentioned:

1. Japan was a bit on the slow side to adapt to the Internet/online connectivity. They're catching up now, but the proliferation of broadband in America (and, in an uncharacteristic reversal of trends, in mainlaid Asia before Japan) has led to a pretty big online gaming industry. I'm sure they'll catch up on this eventually, but good lord, whenever I visit a Japanese website it's like looking back to 1998 (change that to 1994 if it's a personal website).

2. There hasn't been a GTA-style "adult" breakout game in Japan. Yes, there has always been the big pervie hentai thing, but that's not really a mainstream market. Those game cater to a specific otaku audience. Other than that, most of the big series left (Dragon Quest, Pokemon) appeal moreso to younger gamers (although I'm pretty sure there's a good bit of nostalgia for Dragon Quest fueling that series' popularity). Most Japanese developers aren't pushing boundaries, and when they do, the results seem to appeal more to Westerners. Examples: Katamari Damacy is probably now a bigger phenonmeon in America than Japan (or at the very least at roughly the same level); edgy action games like Devil May Cry or Ninja Gaiden are bigger here; and hip Japanese game designers like Mizuguchi are much more respected by Western critics. Hell, I'm pretty sure Lumines sold more in America during the PSP's first week than it has in its entire run in Japan.

I dunno. I think the Japanese market will recover a bit eventually, and there are still some incredible Japanese developers out there. But I don't see it having the level of control or influence it once had ever again.

[GaijinPunch]

Japan was a bit on the slow side to adapt to the Internet/online connectivity.

I unfortuantely know this first-hand. My phone bills for most of 1999 and parts of 2000 were about $200/mo... and that doesn't include international. @_@ That's all the fault of Descent 3... one of the few US online games that really hooked me... big time.

Anyways, there's an interesting article SOMEWHERE about Japan's late to the game on broadband, which no doubt had something to do with the public not embracing the rather expensive technology. In a nuthsell, it's 100% NTT's fault, as they wanted to protect their investment in ISDN, skip DSL, and go straight to Fiber. Only when one of their own quit and started his own company which then sued NTT (and won mind you) did ADSL make it's way to Japan. I hate NTT, for this and many other reasons. They suck cock, and are just plain bastards in general.

[slownerveaction]

Japan was a bit on the slow side to adapt to the Internet/online connectivity.

I unfortuantely know this first-hand. My phone bills for most of 1999 and parts of 2000 were about $200/mo... and that doesn't include international. @_@ That's all the fault of Descent 3... one of the few US online games that really hooked me... big time.

Anyways, there's an interesting article SOMEWHERE about Japan's late to the game on broadband, which no doubt had something to do with the public not embracing the rather expensive technology. In a nuthsell, it's 100% NTT's fault, as they wanted to protect their investment in ISDN, skip DSL, and go straight to Fiber. Only when one of their own quit and started his own company which then sued NTT (and won mind you) did ADSL make it's way to Japan. I hate NTT, for this and many other reasons. They suck cock, and are just plain bastards in general.

Wow, the way I worded that was kind of Engrishy. :oops: I need to start reading my posts before submitting them!

Is NTT like the Ma Ball/AT&T of Japan telecom? Nihon something Telecommunications or something along those lines I'd guess?

[GaijinPunch]

Yes and Yes.

Nippon Telegraph and Telephone (or Telecom, or something).

[kevincure]

Then again, Japan's cell phone service (also primarily NTT DoCoMo) is quite good.

I don't think the downturn is hard to explain - fewer kids + a long recession = lower domestic sales. Japanese games still sell well overseas though, and I don't think the sector is in bad shape.

[GaijinPunch]

Indeed, they are still a force to be reckoned with. I think some people still want bubble sales... ain't gonna happen.

NTT Docomo: Yeah, mobile service is "good", but it comes with a price. While the phones are far more advanced than their western counterparts, and cheaper relatively, the service gets costly. Despite the fact that it's very competitive, there's no real concept of 'minutes', other than the handful you get per month (which is extremely low).

[Promophile]

Yeah I'm not an expert but heres my take. The JP game market is as developed as its going to get. a MUCH huger percentage of the JP population already plays games while the percentage of the US pop is still growing. So my take would be the JP market has already growed as much as it possibly can, and that coupled witha low birth rate is why the market is declining. Don't be suprised if the same thing happens in the US in 20-30 years.

[Cthulhu]

NTT did indeed stifle the development and spread of broadband internet in Japan, but I don't think that's a primary cause of games sales declining. Online game sales and revenues are still quite small compared to the rest of the industry almost everywhere (with perhaps the exception of Korea).


I think some people still want bubble sales... ain't gonna happen.

Indeed, it never will. The Famicom / NES era was the height of games as a social phenomenon in Japan, and the 32-bit era was the height of game sales. (The PS1 led the pack, but the Saturn did very well in Japan too.)


The JP game market is as developed as its going to get. a MUCH huger percentage of the JP population already plays games while the percentage of the US pop is still growing. So my take would be the JP market has already growed as much as it possibly can, and that coupled witha low birth rate is why the market is declining.

The Japanese game market has shunk for several years, so yeah, it's probably peaked for the foreseeable future. I think you're mistaken about the percentage of people who play games - the number of game players in the US has been steadily growing while in Japan it has been shrinking. I think the percentage is far higher in the US.


There hasn't been a GTA-style "adult" breakout game in Japan.

Completely correct. GTA3 and Vice City were actually very successful here in Japan (GTA3 sold over 300,000 copies iirc) but they didn't start any sort of mature-rated game revolution.

I think the increase in quality of U.S. and European developed console games is another reason for games steady growth in those markets. In the 8,16, and 32 bit days, Western developed games were rarely of high quality (there are exceptions of course), but in recent years they have been greatly improving. A lot of Japanese companies are "losing their touch" as well - just look at Sega. Bleh.

[IntvGene]

I also think that more people in Japan are starting to get into computers. And, when I was there a couple of years ago, there wasn't the level of saturation that there is here. I think that like many young people of today, they are spending more money on phones and things to keep connected, rather than on video games.

I also agree on the adult market in Japan. I think that they need to expand on that more in Japan to get the late 20's, early 30's market. That's age group is a huge percentage of games in North America.

[mishimigyushi]

One has to wonder if Japan's undergoing a permanent transition away from the upward spiral of complexity, learning curve, and long, involved narrative, and toward smaller and simpler games.

And that can't mean good things for devices you buy specifically because they are bigger and more complex and more powerful.

One also has to wonder whether the US market will follow Japan's lead in what might come to be seen as "high-end game fatigue.

------------------------------------------------------------

"Despite the breakthrough in technology such as photographic computer graphics, the game market in Japan has been shrinking since 1997," Iwata told reporters.

According to the most recent survey by the Computer Entertainment Suppliers' Association, the Japanese video game market contracted for a third consecutive year in 2003, with the market size dropping to only 60 percent of the level seen in 1997, when the market peaked.

"It is true that the 3D video game gave a boost to our industry, but at the same time, people were beginning to drift away from playing games due to the complication of 3D video games," Iwata said.


New Formula


"In other words, the old formula for success -- the combination of high-specification game consoles and advanced graphics -- is no longer working.

"We now need to create a new proposal for our customers to set a new course for the industry, and the launch of the Nintendo DS is our answer to such challenge," Iwata said.

------------------------------------------------------------

Has 3D killed the console?
By: Kevin Coleman

There has been a problem with me recently. I have not been able to play console games even a quarter as much as I used to. Going from putting 18 hours a day into RPGs to plopping a game in on occasion to feel nostalgia for about an hour. Attributing this to a graphical style does seem a bit cheap, but I have many reasons for it. Even many other styles of games I play suffer from lack of replay or just plain fun factor every time I play them now. That is, only 3D games.

My first experience with my first woes with 3D was the change of Zelda: A Link to the Past to Zelda: Ocarina of Time. Among others, I then grew strong in the belief that Zelda, was never made for 3D gameplay. I still beat it, giving it the benefit of the doubt, but it didn't satisfy me at all. Of course, I still had Playstation RPGs. Playstation gave us classics from Squaresoft, Enix, Namco, Working Designs, and even Sony that are just hard to forget. Playing NES and SNES RPGs was great, but it never felt as wonderful as the first battle I fought in Final Fantasy VII. I believe it's because 3D was this beautiful new thing. No one expected it to have any flaws. Difference with the Final Fantasies for the Playstation, is their gameplay wasn't based around the 3D graphics. They played like the other Final Fantasies, but this time, more beautiful than ever seen before.

No, I noticed all the problems of 3D when the PS2 came into my home. It's a great system and all. Zone of the Enders was about the first action game I realized where 3D wasn't as great as it used to be. Sure the game looked incredible, as all 3D console games should, but the problem was the feel. Half of my play was oriented around what I could see. The camera was the 2nd most important aspect of gameplay. If an enemy was behind me, and I had to attack him, I had to get the camera on him with a lock on or some sort of technique. This was a minor thing, but performed over and over, it was strangely draining. The action would be more fluent if I didn't have to turn the camera or even just focus where I'm looking to rather than what I am looking at.

A lot of you readers may not think this is as big a deal as I am making. Heck, I am probably just getting old and growing out of video games. All I know, is that the feel of platformers, side or top view shooters, and top-down RPGs, all added an extra element. That element is restriction. This is mainly the problem in action games now. The older installments of the Contra series have proven to be some of the most challenging action games ever made. The only ones without challenge were the two for Playstation that had the 3D gameplay style. Why is it so much easier when you can move everywhere? I got it. You can move everywhere! That's absolutely what it is. If you got in the way of an enemy attack in 2D platformers, you were screwed. You could even get boxed in by multiple enemies. There was so much more skill involved. Now you can just randomly jump or fly around and dodge every hit since your landscape is 10 times that of the old days. Yeah they still make them hard, but they aren't as seemingly impossible as they used to be. There's less motivation involved when the goal of your video
game seems so achievable.

There are a few exceptions in the world though. Games like Zone of the Enders does have a Very Hard mode, which is just that, very freaking hard! Problem is, it's not hard in the same way. Jumping pits where a pixel of space makes all the difference is no more. Instead, now you have to learn how to use 10 tools together really well, or use your environment to your advantage. In my opinion, this makes it easier. Games like Contra Hard Corps on the hardest setting, were
extremely close to impossible. Action games were all about dodging and hitting. Now they are about watching, and feeling the levels you play in. This doesn't mean that new action games are less exhilarating, it just means that they are less fulfilling. I don't have as much reason to go back and play when I see Game Over on a new action game. I know I could beat this boss in 2 or 3 more tries.

How do RPGs suffer from this? This is the motherload of all 3D gameplay problems. Camera angles. Just about every RPG I have played that has a 3D camera has annoyed me when using it. It feels like an extra feature that I don't want to do, but I have to do if I want to progress. Final Fantasy X almost had it perfect. Every landscape was 3D, but you moved through them as if you were playing one of the Playstation Final Fantasy games. You didn't need to position any camera, which, in my honest opinion, is just a sign of a lazy development team, and you didn't even need to move your character to manipulate the camera.

I say let us focus on the game, not the camera or the levels build. Jumping is more important than having our camera home in on a flying enemy. These games do add an extra dynamic element, but they take away a classic gameplay feature that has drove us all. The impossibility of classic action games was always great. People who played Atari even, like me, still loved the old games for their endless gameplay. I don't really need to go that far back, though. The NES, SNES, and Genesis days, for me, were much better and well appreciated. I appreciate them more. I'm enjoying my GameBoy Advance, thanks to the realization that 3D games now have this boring aspect to them. Have fun with whichever you like, I think I'm going to keep supporting 2D till the 3D game developers learn how to make a game.


-- Kevin "Aberu Sugi" Coleman


http://www.allrpg.com/editorials/3dkillsconsole.php3

[Griking]

and people are "spending money on education rather than toys

I hate to say it but I think that's part of the answer right there. I think that the Japanese have a little better understanding of where their priorities should be. Education should come first but I just don't see that mentality here in the US (At least where I'm from). Just as an example, I was grocery shopping the other day and the woman in front of me way paying for her groceries with food stamps while her kid was standing there playing with his Nintendo Game Boy. So while this family can't make enough to pay for their own food they can buy videogames? O_O.

[Nature Boy]

I wonder if it's just market saturation. They get how many more games released per year than the US? Maybe they're just ready to move onto the next fad.

[Ed Oscuro]

I was grocery shopping the other day and the woman in front of me way paying for her groceries with food stamps while her kid was standing there playing with his Nintendo Game Boy. So while this family can't make enough to pay for their own food they can buy videogames? O_O.
Apparently. They/the youngster probably saved for quite a while to get it (I'm assuming you're talking about a newer GBA, not an original GB or GBC)...fair enough, no?

[GaijinPunch]

NTT did indeed stifle the development and spread of broadband internet in Japan, but I don't think that's a primary cause of games sales declining.

I think the damage wreaked reaches far further than the games market. Internet commerce in general was unheard of in Japan until the last few years. It's growing huge now that Japan is getting "online", opening huge doors for small and medium-sized businesses that would have otherwise had a much smaller customer-base.


A lot of Japanese companies are "losing their touch" as well - just look at Sega. Bleh.

I think Sega's been making a lot more stuff that's percieved as popular by the mainstream US and not Japanese. JSR Future, Panzer Dragoon Orta, Spikeout... even Outrun 2 isn't a huge franchise to cash in on in Japan. Virtua Fighter is one of the few old franchises of theirs I can think of that makes a killing in Japan (it's sickening how many people play that in arcades) and virtually nobody bothers in the US or Europe.


I think that they need to expand on that more in Japan to get the late 20's, early 30's market. That's age group is a huge percentage of games in North America.

They got a lot more bling-bling than 15 year-olds too!


So while this family can't make enough to pay for their own food they can buy videogames?

Don't get me going. Moving back to the states has made me a misanthrop of sorts. True we don't know the whole story behind the foodstamps and GBA, but I would find it a little discerning as well.

[Ed Oscuro]

Don't get me going. Moving back to the states has made me a misanthrop of sorts. True we don't know the whole story behind the foodstamps and GBA, but I would find it a little discerning as well.
The American tendency to spend and spend (I know all about it :X ) is one that's been reinforced by advertising, easy access to credit cards, buying on margin (heh, you can pretty much do it today), and the promise of social security for decades, but getting agitated seems to me a bit futile (as you say). Really, at worst it's just a crutch that's become worked into the system long enough that it's invisible to us until we see or think we see people abusing it. It might be a misallocation of resources, but on the other hand we are doing *something* right that Japan doesn't seem to be...

[slownerveaction]

Completely correct. GTA3 and Vice City were actually very successful here in Japan (GTA3 sold over 300,000 copies iirc) but they didn't start any sort of mature-rated game revolution.

Correct me if I'm wrong, but I think Vice City actually bettered GTA3 and neared 400,000. That's pretty impressive considering the few Western games that have done well in Japan are usually of the platformer mascot variety (Crash Bandicoot, Rare's N64 stuff).

[Mianrtcv]

I agree with intvgene. The U.S. market has a huge development in the age range of the over 20 groups. At 34 being a game player and collector since the early days, I was probably more into games than many of my friends. That was then/this is now. I'm still in it deep, But the funny part is now some of them are actually deeper into gaming than I am.

[GaijinPunch]

but on the other hand we are doing *something* right that Japan doesn't seem to be...

Spending money we don't have?

[petewhitley]

but on the other hand we are doing *something* right that Japan doesn't seem to be...

Spending money we don't have?

Ha ha, my thoughts exactly. I'm a little confused as to what Ed considers we're doing right.

[calthaer]

Maybe people are just spending their entertainment dollars on home-body activities like video games and movies rather than going on long trips that require lots of gas.

[GaijinPunch]

Maybe people are just spending their entertainment dollars on home-body activities like video games and movies rather than going on long trips that require lots of gas.

I'm too lazy to look at the stats, but the average American is most likely in debt. If not, then has very little savings. The average Japanese probably lives like a slave, yet has several thousand dollars at least, sitting in a no-interest yielding bank account.

[Cthulhu]

I think Sega's been making a lot more stuff that's percieved as popular by the mainstream US and not Japanese. JSR Future, Panzer Dragoon Orta, Spikeout... even Outrun 2 isn't a huge franchise to cash in on in Japan. Virtua Fighter is one of the few old franchises of theirs I can think of that makes a killing in Japan (it's sickening how many people play that in arcades) and virtually nobody bothers in the US or Europe.


I don't mean Sega 2 years ago, I mean Sega post Sega-Sammy Holdings. JSR, Panzer Dragon Orta, and such were just fine. I mean look at games like Shining Tears, Shining Force Neo, Dororo, the Sega Ages 2500 games, etc. They're pretty much junk. Shining Tears is one of the worst things I've played in years.