Episode 55: From Niche to Global - Top Tips to Cracking the Lucrative Japanese Mobile Market

Join us as we explore the ever-evolving Japanese mobile market.

In this episode, we set our sights on the lucrative world of Japanese mobile games. We’ll dive into player preferences, effective monetization strategies, and the cultural nuances that influence this thriving market.

Join industry experts Teemu Palomäki, Chief Games Analyst, and Sonja Skoglund, Games Analyst at GameRefinery, a Liftoff Company, as they discuss actionable insights to help you navigate the unique opportunities and challenges that the Japanese mobile scene presents.

Don’t forget to subscribe, leave a review, and check out our website, https://liftoff.io/ and https://gamerefinery.com/, for more information on game development topics.

Transcript

Jon Jordan (00:03.502)

Hello and welcome to the Mobile Games Playbook. Thanks for tuning in for another episode. This is a podcast all about what makes a great mobile game, what is and isn't working for mobile game designers and all of the latest trends. I'm your host, John Jordan and joining me today, we have two experts. So we have Teemu Palomäki, a senior games analyst at Game Refinery by Liftoff. How's it going, Teemu?

Teemu Palomäki (00:23.732)

Doing great, great to be here.

Jon Jordan (00:27.309)

Good, good. Also joining us, we have Sonja Skoglund, who is a game analyst at Game Refunded by Liftoff. How's it going, Sonja?

Sonja Skoglund (00:34.503)

Very excited to be here. Thanks for having me.

Jon Jordan (00:37.453)

Good good. The reason we have you two in particular is you are experts on the Japanese games market, which is useful because that's exactly what we're talking about today. So I guess Japanese mobile games often appear in podcasts. I don't think we've done an episode on it for a while. I guess it's interesting because it is one of the larger sort of games markets in terms of sort of economics and also, a lot of innovation has clearly happened there, it was actually one of the first sort of big mobile games markets. And also, culturally, it's quite interesting because there are some things that really appeal to the Japanese market, which obviously appeal globally, and some things which appeal to the Japanese market, which don't appeal anywhere else in the world. So quite interesting from various points of view, which we will discuss. Teemu, are you going to kick us off with a sort of high-level approach? What are the specific things that Japanese mobile gamers sort of really like? What characterizes that market?

Teemu Palomäki (01:35.668)

Well, if we look at genres, for example, one thing that we've recently talked a lot about is how there is the location-based trend, which is on a totally different level than in Western markets, especially compared to the U.S. So, like in Japan, we have more variety in location-based gaming. There is obviously Pokemon Go, which is the, sort of ultimate brand there. But they also have Dragon Quest Walk for those who like turn-based RPGs or older legacy RPG brands. Pikmin Bloom for casual audiences actually made its first appearance in the top 50 this month as we're recording it. So that's also going up there. They even have like 4X location-based game with Nobunaga's Ambition and Monster Hunter Now that we have here, an action RPG. And there's also like Eki Memo, you can collect those girls who are also like based on train designs. So there's a lot of variety, and I think there's innovation coming up with Kingdom Hearts Missing Link coming there. I think it's going to have some sort of location-based gaming, but they are hinting that you could also move around the world from the comfort of your home. It's so interesting to see how that turns out. So that's one that is massively different from the U.S., but also, like RPGs, the popularity of RPGs. It's like almost half of the top games in the market are RPGs. And you see sort of they have a lot of anime-based or game-based RPGs there. And if not the like brand actually being from an anime, they have a lot of collaborations with different brands to buff off the RPGs. But then we see also sports. Much more of those sports titles popping up in top 200 compared to the West. Sports based on animes or like cartoony approach, sort of this arcade approach. They can go really crazy. If you've ever seen Captain Tsubasa, the way they play soccer is really over-the-top moves. Same with sort of Prince of Tennis or Haikyuu!! for volleyball. So we've probably mentioned a couple of times Uma Musume, a game where girls are racing horses and they're competing, running around the track. So it's really... Those genres, for example, are really popular. And I think Sonja can maybe elaborate more about like idols and rhythm games as well.

Sonja Skoglund (04:58.087)

Yeah, those are, you mentioned, rhythm games and idol games, so-called. Those are two other genres that really do a lot better or exist in a much larger space in the Japanese market than in the Western markets. And well, I think it's quite common knowledge that rhythm games are on a very different level, the popularity in East Asia in general, but especially in Japan, there's a long history of rhythm games in the game arcades. And there's also, they've come a long way from just those Dance Dance Revolution, small arrows, and there's a lot of innovation in the core gameplay there. And then there's these so-called idol games. There are actually sort of two types, and one is this idol management sort of game where you collect a group of, well, idols, which are like celebrities who are very purposefully produced for business purposes, and people create huge fan bases for these idol groups. So there are idol management games where you collect these idols and then train them in these training programs inside the game. And then there are usually some interactive story elements embedded also. So that's one type. Then, the other one is actually rhythm games and idol games combined, where you get to enjoy being a fan of these idol groups while actually playing a rhythm game. That's where the music is taken from the idols' real-life produced music. And then there are some games that have a whole group of idols, which are completely fictional and not based on any real-life celebrities. So, just for the game series, they created these completely fictional idols and produced music just for the game, and then you can play it inside the game. And this actually interestingly ties back to the sports category a little bit with Uma Musume. And I know we've talked about Uma Musume, but it's a very interesting, very Japanese combination of a lot of things because it is an idol game in a sense, where you manage these girls that are horses but are basically idols. And then there's the sports aspect. And they also have these concerts. So it also ties back to music games. So that's a really interesting game to highlight.

Jon Jordan (08:12.237)

Yeah, I'm not sure how to unpick all that stuff there. One thing I will say is is something's getting confusing when you're saying idol games. It's that's I D O L as in an idol game, something of a character you worship rather than rather than often we talk about idle games. I D L E, which are games where you just let the game happen, which are quite popular in the West. But I guess you could have an idle game about idol characters. That would maybe be much too much. But yeah, good. So it's a good introduction. And I guess what you said there shows, you know, on multiple levels just how different, even in terms of genres, the Japanese sort of market is and so many things to unpick. It's really interesting that location-based games, so many location-based games have been tried with the biggest brands in the West, Harry Potter [Wizards Unite], I guess being a good example. They just haven't worked. Whereas in Japan, for various reasons that we can sort of discuss, you have already mentioned half a dozen thereof I guess they're not Pokemon Go success stories, but they are, you know, they are successful sort of games. Did you think that the fact that, you know, Japanese society is so based on sort of manga and anime, and it's, and the majority, so the majority of the games will sort of be viewed through that lens. I mean, are there any games, successful games that sort of come to mind that aren't sort of an anime type game? I mean, are there, do they have the Call of Duty’s or, you know, those sorts of things? Or does that just really not appeal to the Japanese audience?

Teemu Palomäki (09:45.428)

I think there's room for those games as well. We see games that are popular in the West also be popular in Japan. But I think it's quite safe to say that if people are making a game with the Japanese market in mind, it's going to be manga, anime, at least sort of influenced by it heavily. So sort of having that cartoony approach and even like, you know, when you watch an anime you can tell those character archetypes that are there. There are massive fans for specific types of characters, so you want to have those archetypes even though they seem like a cliche. People are really looking forward to specific types of characters. Some people are really into these tsundere characters who sort of look like they don't like you at all, they hate you, but then kind of like when you get to know them, they might be a little bit shy about it and kind of like you. And so you have these different types of characters and archetypes that people really love, and it shows.

Jon Jordan (11:15.245)

And I guess it's sort of hard for... I mean, I'm not an expert at all on Japanese culture, but obviously, I haven't been in games for a while. But I think it's probably hard to over-emphasize just how the whole of Japanese culture is driven by manga and anime as fundamental to the whole society, no matter whether you're a kid or an adult in Japan. Even if you'd probably... I'm sure there are lots of people in Japan who don't like... who don't read anime books. But it's just part of the culture in a way that we just don't have in the West, whereas it's much more, you watch cartoons when you're a kid, and then you grow up to watch, you know, Marvel films or something. It's just really not like that in Japan, in a way. It's almost like, yeah, there's a whole, it's not a subculture. It's pretty much culture is viewed in that respect. So that's sort of something to try and get your head around.

Sonja Skoglund (12:03.847)

Yeah, that's a good point. Like you said, it's not only kids' cartoons; there's a lot of anime and manga specifically written and filmed for adults. And it penetrates through the whole culture. And obviously, we also see that in the gaming market. Even if it's not based on an existing anime or manga series, the art style of anime or manga is very prevalent.

Jon Jordan (12:42.573)

And I guess, as you say, even some games that aren't based around that, if they are successful, they do end up then having anime made about them because that's how people consume that. Any successful culture will be consumed in that way. So it becomes self-fulfilling.

Teemu Palomäki (12:56.724)

Yeah, they even have like, I remember there was also a movie about a mobile game. So there was this, I think it was when in the West was called The Alchemist Goat. I remember that mobile game, they advertised that they had like a movie theatre run of like a film made of the world of that game. So, even mobile games can turn into like these big-screen anime movies.

Jon Jordan (13:29.741)

It's interesting that I hadn't really thought about the sports stuff you were talking about before. So, was it right that you said there was Haikyuu!! for volleyball?

Teemu Palomäki (13:40.532)

Yeah, Haikyuu!! is the name of the anime series. So it's a volleyball anime brand, and they've released a really successful mobile game for that brand.

Jon Jordan (13:58.157)

And even in that small stuff, would you see? I guess there will be, say, realistic soccer games and baseball games as well, but there would still be quite a big proportion that would be cartoon, anime sort of stuff.

Teemu Palomäki (14:12.372)

Yeah, yeah, and when it's realistic, it's sort of, well, aimed at a more mature audience, maybe. And, you know, I think the realistic sports that we see are mainly soccer and baseball, which are the big ones in Japan. Of course, those are also popular on the cartoony side.

Jon Jordan (14:38.189)

Good. Okay, so we have... Go ahead.

Sonja Skoglund (14:39.943)

And then this... Yeah, sorry. It's also interesting in this one cartoony, like an arcade sports game about baseball that I played. They have collaborated with real-life baseball players. So also this overlap or mixing of these anime and imaginary worlds with the real world is also something in what we see more in collaborations, I think, in Japan than in the West.

Jon Jordan (15:22.509)

So again, sort of collaborations are something that we, when we've spoken in previous podcasts about sort of live ops and that sort of stuff. Obviously, collaborations are a massive thing generally for any mobile game. But again, correct my limited knowledge, I suppose, but the anime scene often has lots of, you have collaborative, you know, the worlds between these anime things are sort of mashed up together in lots of, you know, in every sort of situation. And none of these things are sort of, you know, walled gardens that sort of here's my anime characters, and they never interact. I mean, it seems like there are loads of them; basically, the whole thing is it's like a mashup.

Teemu Palomäki (15:55.732)

Yeah, you can go crazy with the collaborations. It's like the games can have so many different characters just interacting there. But I think it's always like one collaboration at a time. So, it's not necessarily like multiple brands clashing at once or anything. But of course, the collaboration stuff stays in the game and is available. So, I've built a lot of my RPG teams around collaboration characters. So no original mobile game characters, but all collaboration stuff. Because those can be really strong for a while, of course. When they sort of fall out, they fall out fast. You don't necessarily release new upgrades for those characters. So that they're really powerful for a while.

Jon Jordan (16:57.453)

So that's sort of some idea of the culture and the genres. And I guess the other important thing that underpins this is that the Japanese market is one of the sort of most highly monetized from an ARPU basis. So for individual players, the average that they're going to spend is going to be, if not the highest, one of the highest sort of territories in the world. And I guess that the combination of those things, having its own culture and having people that are going to spend hundreds, thousands of dollars a year playing these games sort of combines the fact that you can have these sort of what to us might seem weird niches because you don't need so many players to make them profitable because you have this sort of quite high monetization. So, do you want to talk a bit about monetization and how the Japanese market ends up at these very high levels?

Teemu Palomäki (17:47.924)

Well, it comes with the gacha mechanics. They are more varied in there. And I think it's also not just the monetization mechanics but overall game design. So, to make the gachas appealing, you need to have something interesting to pull. So I think the way that the Japanese market is so character-centric also plays into that. And the characters themselves, one thing that is interesting to note is that in the West, the characters talk about the world of the game, whereas in Japanese mobile games, the characters often speak to you, the player. They're sort of interacting with you, so you are forming this relationship with the characters. They also have the systems to support that. But characters are everywhere when you have that kind of relationship with the characters. They're relatable content. Then, when you go to the gacha and pull for them, you are more eager to get them, and you build that relationship. And, you know, gacha animations. If I finish my thought with this, gacha animations are a form of art in Japan. So my favorite one is from Fullmetal Alchemist Mobile, where you have this sort of rotary phone that is ringing or rotary phone that you spin a three-digit number on. And that's the way you pull the gacha. So you put the digits in, it calls, and then a train arrives, and from the train come the characters that you obtained through that gacha. So it's more interactive, creative, and memorable, and it feels a little bit like you can affect the rates. To this day, I think it doesn't affect the rates at all, but it sort of adds that element. Like if you're going to a slot machine, you might put that coin to your hands and blow a kiss or something like I'm gonna do this now and you place it, you put that, you have sort of belief that you, this is improving your odds. So if you put your lucky number in that rotary phone, it feels like you can get better props or something. So it's a form of art, whereas in the West, it can just press the button, and then you pop, pop, pop, pop, pop, you get the couple of shards that you obtain from the gacha. So, the excitement levels are totally different.

Sonja Skoglund (20:46.279)

And also going back to monetization and this character-centric game worldview. One thing that came to mind is this, especially in games where you collect these beautiful, sexy ladies as your characters, like Teemu mentioned, from all of these different character archetypes like tsundere or cute or innocent or whatever. Especially in those games, we see these player polls where the game organizes a poll for the players where they can vote for their favorite character. Then they promise that in the next big event, they're going to bring content related to the character that's most popular. So obviously, that's a great way of securing your gains in advance and really catering to the audience.

Jon Jordan (21:54.605)

And I guess for, just to explain, I guess most people know what it's all gacha system is but it's but it's basically a sort of random drop system, which is actually, as far as I know, the Japanese game companies invented it would have been like sort of 20 years ago in the first mobile games came out it was a sort of random and it was sort of I guess inspired by Pachinko machines, I think that was the sort of original idea at least and when you're saying that it's very character based, would it be then that most gachas would be then creating, you'd be getting a character out of that rather than like in the West you might get sort of gear or sort of costumes or say shards or something like that. But would it be the case in general that most Japanese games would actually be about characters rather than sort of accessories around characters?

Teemu Palomäki (22:45.556)

Yeah, I think that's the safest way to go because people form the best bonds with characters. The people I think next were some animal mascots, those kinds. And the more inanimate the thing becomes, the less attracted you are to it, the less interested you are generally in it. So characters are the safest way to go.

Jon Jordan (23:18.445)

Hmm. And I guess that's sort of, I guess, we’ll go on to localization or culturalization. You know, that's sort of quite fundamental to how those Japanese games are. Whereas in the West, just the game designer would see things in that's, yeah, you would have characters as part of your gacha maybe, but you'd have a whole bunch of other stuff. You could think, I think all these other cool things I can put in my gacha system, which you think would be much more appealing, but it's a very deep level. It's just what people are attracted to, you know, but it's just very different.

Teemu Palomäki (23:45.94)

Mm—mm. Yeah, and then also the way you advertise the gacha. Sonja had a good example of this, like how the gachas can be different in the West and Japan, with Legend of Mushroom, I think. 

Sonja Skoglund (24:05.415)

Yeah, that's an interesting case. So, actually, Legend of Mushroom was first released in Japan and then a little bit later in the U.S. And I've been playing both of those versions. It's interesting to see the differences and clear localizations between them. One is that the whole game, a big part of the whole game, is constantly pulling this gacha, which is a magic lamp that appears in the main UI, and you keep constantly pulling it. In this case, it's an equipment gacha, and the focus is more on the constant small dopamine hit that you get from the gacha pulling. The gear is also quirky and a little bit funny, mixing fantasy and modern elements. So maybe that's like an Asian take on it. I'm not sure. But the interesting part was that when it comes to differences between the two versions, in the Japanese version, again, characters, it's not just the lamp, but there's this goddess of the lamp that's always standing beside the lamp, and she's very sexy and beautiful and she talks to the player. And then, in the Western version, there's only a very minor tutorial character who only appears when they introduce new features to the player. But in the Japanese version, the lady is always there. And it was just such a clear way to implement characters yet again. And when they were advertising for the game, they actually hired this actress to cosplay as the lady of the lamp. And she was singing and dancing or at least playing the game. And she was a very attractive lady. And so that's also like one thing, like cosplaying as the characters is of course, originally a Japanese thing from the conventions and although we have a lot of it in the West now and all kinds of anime conventions and stuff but...

Jon Jordan (26:39.245)

Hmm. It is interesting that you're having this breaking of the fourth wall. So the characters talking to the player, which again would be, I can't even think. I'm sure it has happened, but I can't really think of that as something that I see a lot in mobile games. Whereas, as you say, that could be something that is sort of how players, you know, it's a very subtle, but very significant change in how a player would interact with the game world where, you know, I'm in charge of the game, and I'm getting. I'm just telling people what to do in the game or getting my characters to do these things, whereas the characters talking back to you, it seems subtle, but equally, if you expect that, then games that didn't have that, you'd feel sort of like you weren't very engaged with them because the characters weren't doing what you were expecting them to do, which is sort of, in any cold way, talk back to you.

Teemu Palomäki (27:35.06)

Yeah.

Jon Jordan (27:38.509)

So, there have clearly been some Japanese games that have been massively successful in the West, and some Western games have been successful in Japan. Are there any trends we're seeing there? Is there more or less of that sort of stuff happening? There are now lots of good localization, culturalization, and outsourcing companies that handle these sorts of things, so we're much more technically aware of what we need to do. But is there anything you can talk about there in terms of stuff you've seen recently of games doing either well or badly?

Teemu Palomäki (28:17.268)

I believe localization is always important. So, no matter what kind of game you're making, if you want it to succeed in Japan, you need to localize it well. The way that you translate this stuff, these days it's popular to just throw stuff through Google Translate or ChatGPT or whatever. But having actual people translate it, check it, that it works. We've seen some localization examples where words are broken in the middle. And it can look very cheap. So doing the localization properly, of course, we mentioned the way you can help the appeal is through the characters, bringing characters to the front. Also, like recognizing Japanese cultural events, seasonal events. We have Golden Week starting very soon. So that is something that is often recognized in Japan. So it's like a week of vacations in Japan where everyone is off and it's at the change of April to May. So not much is happening during that time. I notice it mostly in the mangas that I follow weekly. Those are on breaks during that time.

Teemu Palomäki (30:10.612)

so forth. So recognizing these events that are significant in there.

Sonja Skoglund (30:20.487)

And also actually Golden Week is sort of the opposite. Like Teemu mentioned that the mangas go on break, but looking at games, that's when people are on holiday, so they have a lot of time to play. So that's a really good opportunity to engage players. And actually, there's another example of Legend of Mushroom and differences between the localizations, because right now there is exactly a Golden Week event in the Japanese version, but obviously not in the Western version.

Teemu Palomäki (30:58.836)

Yeah, but you don't need to limit it. I think Supercell with Pearl Stars, they had sort of Golden Week event going on in the global version as well. It doesn't really matter. Like it's cool skins and there are Japan fans outside Japan who enjoy anything Japanese-y. So seeing these Golden Week skins with like these Japanese cats, I think it appeals to certain audiences and cool skin is a cool skin, doesn't matter what it's inspired from.

Jon Jordan (31:37.133)

Yeah. And then, have there been any sort of Japanese games that you think have done a good job of being very Japanese and appealing to that local market, but also sort of doing well globally? Because I guess it is a bit dated now, but sort of historically stuff like sort of Puzzles and Dragons massively successful game, one of the most successful games ever, just in Japan. You know, Monster Strike again, another enormously successful game managed and didn't really work outside of Japan, even though it's made a billion dollars. Do you think the Japanese developers are getting better now, sort of appealing to both sort of audiences?

Teemu Palomäki (32:16.276)

Hmm. Well, I'd say, well, first, the first one that comes to mind, Pokemon, but that's, that's Pokemon Go, it's, it's developed by Niantic. So it's sort of Western in that sense, but it's, it's a Japanese brand. And, and thinking of more, more Pokemon games, I think the, the Pokemon Masters X that, that is, a game that is having decent spikes. And if the IPs are popular enough, I think Final Fantasy VII Ever Crisis did okay for a while out there. But I think mostly if it's these anime style games that are doing well in the West, it often comes from China, you know, Genshin Impact and Honkai Star Rail. So those are sort of devouring the space from like the games of anime fans. But...

Sonja Skoglund (33:29.415)

Well, there are also the Dragon Ball games, which are... Well, Dragon Ball obviously is a huge IP, also in the West, like one of the few animes that everybody knows, and they are very old games, so that probably has an effect in the equation.

Jon Jordan (33:53.197)

And just to go back to Pokemon Go, obviously, you know, it's a Japanese-originated IP developed by an American company. In Japan, was that, you know, would there have been any obvious sort of a Japanese person playing that, realise a Japanese company, that particular game, didn't develop it? Or does that actually sort of show that, you know, for the best games it doesn't really matter where you are in the world there's enough knowledge now that these things can be sort of global even though Japan is a somewhat separate market for something.

Teemu Palomäki (34:31.06)

Yeah, I think they probably noticed that it's not like a Japanese game because they have certain sort of habits when making UI and I could see there being maybe a little bit more gacha elements or stuff there. But like, you know, mobile games they have these Western games as well. So I think it's also very, very good for them. Obviously, they have enjoyed it very much.

Jon Jordan (35:12.877)

Yeah, yeah. Cool. Lovely. Let's give everyone listening a bit of homework. So I guess Legend of Mushroom is one. But if you were going to encourage someone to download one sort of characteristic Japanese mobile game to take a taste of what we've sort of been talking about. Sonia, what game would you suggest people download?

Sonja Skoglund (35:38.343)

I have to say this is my personal favorite but it's Heaven Burns Red and it's something that I would not expect to see in the West. It's anime style and it's from Right Flyers Studios and they are known for a very elegant and sleek design and very deep focus in the story elements. So I really enjoy the story and there's a lot of dialogue and a lot of choices and you get to play as a female character interacting with other females and creating these meaningful relationships and of course enjoy a turn-based RPG.

Jon Jordan (36:34.029)

Good. Teemu, what would you recommend?

Teemu Palomäki (36:37.78)

Well, one thing that comes to mind is Memento Mori. I think that was really beautifully experienced. It's more successful in Japan, not doing so well in the West, even though there is localized version. But it has this really beautiful watercolor art style. Like really it shows that you can make really these beautiful experiences and this is an idle RPG, this time I D L E. So that kind of idle RPG, but really beautiful music, really like sort of it's a great experience and it's showing that these different types of games can be really popular. It has beautiful soundtrack, each character has their own song. So that's something to check out if you want to see something more interesting from Japan.

Jon Jordan (37:45.005)

Mm -hmm. Cool. Lovely. Well, thank you very much for your recommendations, and thank you very much for your expertise in the podcast. Thank you, Sonja and Timo.

Teemu Palomäki (37:56.244)

Thank you very much.

Sonja Skoglund (37:56.455)

Thank you.

Jon Jordan (37:57.997)

And thanks to you for watching or listening to the podcast, whoever you are consuming it. Every episode, we are talking about what's going on in mobile games, which is now an enormously variation of gaming around the world and lots of different cultural cultures, lots of different trends going on there. So I hope you are enjoying our episodes. Please do subscribe and we'll see you next time. Bye bye.