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US & Chinese Competition Sees Japan’s Video Game Industry Turn Back To Innovation

When you consider Japanese industry, it’s easy to default to video games. The country is synonymous with developing some of the world’s most popular platforms, with companies like Nintendo and Sega as recognizable in every corner of the world as Nike is to sportswear or Disney is to film.

Despite expansion of the competition, including significant growth in China and Western game developers beginning to dominate the market outside Asia, Japan remains a major player on the global stage, continuing to do what it has always done best: innovate.


Setting new trends

Take Nintendo, for example. The company, which has its headquarters in Kyoto, saw its reputation take a hit in the mid-2000s, with consoles that failed to capture the public’s imagination. This culminated in the disappointing Wii U, which flopped horribly. But Nintendo, which prides itself on pushing the boundaries, sought to turn its fortunes around. Cue the Nintendo Switch.

Launched in 2017 with the game Legend of Zelda: Breath of the Wild, the hybrid console was capable of being both a handheld device and a fully-fledged home console. Its unique marriage between at-home game-playing and portability, attracting both seasoned and casual players, has quickly outpaced the sales of the Xbox One, has now shipped over 50 million units.

We mustn’t forget that, without the Japanese gaming powerhouse, we wouldn’t have much of the tech we now take for granted. The mastermind behind games like Super Mario, Legend of Zelda, Pokémon, and Animal Crossing, has also pioneered the development of directional pads, shoulder buttons, rumbling controllers, multiplayer consoles, and handheld gaming devices. The proliferation of which, seen across the world, is also indicative of Japanese gaming culture become de rigueur worldwide.


Japan on the world’s stage

Games originating in Japan have seamlessly found audiences internationally. The Mario franchise, in 2017, had reportedly sold over 650 million units globally since first being unveiled in 1985. American audiences were so enamoured, Disney went on to make a film about the characters in 1993 starring Bob Hoskins and John Leguizamo. Most recently Warner Bros. released Detective Pikachu, based on the popular character from another Japanese creation – Pokémon. It would become a huge international hit, earning £433 million worldwide, 33% from ticket sales in the US.

While the Japanese video gaming market may have lost its number one status (currently the third biggest industry in terms of revenue), there’s little sign of its inability to compete with the giants of America and China. The recent success of the Switch saw Nintendo’s profits surge, increasing by 505% in 2017. Similarly, Sony’s PlayStation 4 enjoyed 60% market share, more than double that of Microsoft’s Xbox One.


An industry pushing the boundaries

Like its Japanese competitor Nintendo, Sony has enjoyed its fair share of innovations too. It launched the PlayStation VR, pre-empting the possibilities of virtual reality at home, and has in the past pioneered such technology as the immersive EyeToy (which allowed you to put your own image into a gaming environment), while experimenting with augmented reality, in the game Invizimals, many years before Pokémon Go.

Nintendo and Sony aren’t the only Japanese video game developers to set new trends. Tokyo based Square Enix, best known for the Final Fantasy franchise, has recognized the blossoming potential of the PC market and adapted its console-based, single-player heavyweight as a subscriber-based MMO.

Similarly, Konami, which is best known in the console-gaming world for producing franchises such as Silent Hill and Metal Gear, pioneered the rhythm and dance genre of home-gaming, with titles such as Dance Dance Revolution and has also, more recently, embraced mobile and iGaming.

Recognized as the fourth biggest developer in Japan, Konami has successfully adapted some of its biggest sellers for the mobile market including Metal Gear Solid Touch and Pro Evolution Soccer for iOS and Android devices. It has also continued to disrupt in other gaming sectors such as its production of casino game cabinets while unveiling a Castlevania-themed slot game to add to its other popular titles such as Rocky Slots, Action Staked Sevens, and African Diamond.

There’s more ground to be broken

For consumers, it’s great to see the video game market being pushed to innovate. For Japan, which is now looking up rather than down at its rivals, it has evidently necessitated the need for greater diversity in its output, from consoles to PC and mobile. As Blake J. Harris, author of Console Wars, says, the video game industry wouldn’t be so buoyant and successful without the contributions originating in Japan. The industry’s legacy is a glittering one, and it’s not about to fold over and wither away now.