Serkan Toto is a social and mobile gaming industry consultant based in Japan. He gave a presentation on the gaming industry in Japan and key trends. The presentation covered: [1] The structure of Japan's social gaming market, which is dominated by GREE and DeNA. [2] Projections that Japan's social gaming market will reach $3.9 billion by 2013. [3] Ten key trends in gaming including the rise of smartphone, tablet, and indie gaming as well as cloud gaming and full immersion technologies. [4] Threats and opportunities for GREE and DeNA from regulations, international expansion, and competitive landscape changes.

1. Gaming In Japan And Beyond:
Where Is The Industry Going From Here?
By Serkan Toto, PhD
www.serkantoto.com
Image credit: DeNA

2. About Me
• Social and mobile gaming industry consultant
• Advisor for startups in Japan and the US
• Japan contributor for TechCrunch.com
• Based in Japan since 2004
• Hardcore gamer
• JP game blogger: http://www.serkantoto.com

3. Contact Information
Twitter: http://twitter.com/serkantoto
LinkedIn: http://linkedin.com/in/serkantoto
Email: serkan AT serkantoto.com

4. Visit My Website For Free Information On
Japan’s Social Game Industry
(http://www.serkantoto.com)

5. Agenda
I: Structure Of Japan’s Social Gaming Market
II: Market Size
III: 10 Key Trends In Gaming
IV: Threats And Opportunities For DeNA & GREE

6. I: Structure Of Japan’s Social Gaming
Market

7. Japan‘s Unique Social Networking
Landscape
• Basic structure: real social graph vs.
virtual social graph
• 3 homegrown social networks with 25-30+
million registered users each:
– Mixi (real/80% mobile social networking)
– GREE (virtual/mobile social gaming)
– Mobage (virtual/mobile social gaming)

8. Fragmented Industry Structure
• 400+ social application providers
• 2 dominant companies double as platform
and game providers:
GREE and DeNA (“Facebook+Zynga in 1“)
• IPOs said to increase going forward
• Rekoo only really successful foreign player
• Zynga Japan is an underdog

9. Japan‘s Social Gaming Market: Dominant Duopoly

10. Key Peculiarity: Gaming Nation Japan
• Taito‘s Space Invaders kicked off the gaming
industry as a whole in 1978
• Nintendo‘s Famicom revitalized industry after
the big crash 1983
• Japan has 10% share ($6.5 billion) in global
video game market
• Games enjoy greater cultural attention in
Japan than elsewhere
• higher payment walls for progressing in social
games are accepted

11. Key Peculiarity: Mobile
• Social games (and the web at large) are
consumed mainly on mobile phones
• virtual item payment via carrier billing as
catalyst
• GREE/Mobage pre-installed on handsets
Image credit: KDDI au

12. Key Peculiarity: Special Genres
• Some social gaming genres are as popular in
Japan as elsewhere, i.e.
– farming
– pet-breeding
– city-building
– restaurant management etc.
• But some are especially popular over here

13. Key Peculiarity: Special Genres
Example 1: Manga-based social games

14. Key Peculiarity: Special Genres
Example 2: Social RPGs

15. Key Peculiarity: Special Genres
Example 3: Social dating and love simulations

16. Key Peculiarity: Special Genres
Example 4: Social idol-raising games

17. Key Peculiarity: Special Genres
Example 5: Social card battle games

18. II: Market Size

19. Size Of Japan‘s Social Gaming Market
Projection from Morgan Stanley, January 2012

20. Size Of Japan‘s Social Gaming Market
Projection from Nomura, January 2012

21. Size Of Japan‘s Social Gaming Market
Projection from JP Morgan, June 2011
• 011: US$2.8 billion
2
• 012: US$3.4 billion
2
• 013: US$3.9 billion
2

22. Size Of Japan‘s Social Gaming Market
Projections from other sources, July 2012
• Ministry Of Internal Affairs:
US$3.26 billion (in 2011)
• apan Online Game Association:
J
US$3.6 billion (in 2011)

23. III: 10 Key Trends In Gaming

24. Trend 1: Smartphone Gaming

25. Example: Real Racing 3

26. Trend 2: Tablet Gaming

27. Example: Phoenix Guild

28. Example: Supercell

29. Example: Wikipad

30. Trend 3: “Indie” Gaming

31. Example: Steam

32. Example: Xbox Live

33. Example: App Store

34. Example: Minecraft

35. Example: Tiny Wings

36. Trend 4: Cloud-Based Gaming
Image credit: Kotaku.com (2010)

37. Example: Onlive

38. Example: Gaikai (Sony)

39. Example: Agawi

40. Example: G-cluster

41. Trend 5: (Connected) TV Gaming
Image credit: Colorcubic.com (Atari 1984)

42. Example: Ouya

43. Example: Apple Airplay

44. Example: Google TV

45. Trend 6: GaaS Model / DLC / F2P

46. Example: EA

47. Example: (Almost) The Entire Industry
Image credit: Gamefans.com

48. Trend 7: HTML5 / Multi-Platform

49. Example: Cut The Rope / Microsoft

50. Example: Mozilla’s BananaBread 3D FPS

51. Example: Goko

52. Example: Game Closure

53. Trend 8: Full Immersion
Image credit: Wiki Commons

54. Example: Sony’s 3D OLED Headset
HMZ
Image credit: Game Watch

55. Example: Microsoft’s Immersive
Gaming System

56. Trend 9: Social Revolution

57. Trend 10: Alternative UI

58. Example: zSpace/Unity Hologram
gaming

59. Example: Emotiv’s mind-reading
game controller

60. IV: Threats And Opportunities For
DeNA & GREE

61. Threat 1: Regulation

62. Threat 2: Internationalization

63. Threat 3: App Economy

64. Threat 4: Video Games -> Digital

65. Threat 5: Social Card Game Fatigue

66. Threat 6: Rise Of Facebook

67. Threat 7: Competitive Landscape

68. Opportunity 1: Smartphone Adoption
Image credit: Gadgetreview.com

69. Opportunity 2: Nintendo’s Iwata-san

70. Opportunity 3: Next-Gen Social Games

71. Opportunity 4: Black Box Japan

72. Opportunity 5: Japan’s Wealthy Users

73. Thank you for listening!
Questions?

74. Contact Information
Twitter: http://twitter.com/serkantoto
LinkedIn: http://linkedin.com/in/serkantoto
Email: serkan AT serkantoto.com