Japan's Galapagos Syndrome shows signs of globalization

03.04.2024 - 16:55 / gamesindustry.biz

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The assumption of many is that the Japanese games industry, and indeed that of much of Asia, is a unique, indecipherable entity compared to the more easily understood and integrated dynamics of gaming in Western countries.

Mobile gaming has a foothold around the world, but the rise of gacha gaming in Japan in particular feels unparalleled to trends witnessed elsewhere, where many major franchises like Uma Musume: Pretty Derby, which developer CyGames announced had earned a cumulative revenue of $2 billion in less than two years following its 2021 launch, almost entirely a product of domestic spend bar a small launch in South Korea.

With headlines such as this dominating, it’s easy to assume that the industry in Japan exists in a unique state disconnected from the trends of the globe, embracing a Galapagos Syndrome symbolic to other domestic technological developments like the flip phone prior to the smartphone revolution or the insistent continued use of the fax machine.

While the perception of Japanese games development as a declining powerhouse has been disproven in the wake of high-quality releases from the likes of Capcom and From Software, plus the turnaround of Nintendo's fortunes following the launch of the Nintendo Switch, one assumption that perseveres is the reputation of the country as a mobile gaming capital that has otherwise relegated console gaming to the confines of history. It's understandable when headlines paint success stories of the country as one of the highest-grossing mobile gaming markets in the world, and not even necessarily inaccurate — it's only behind the US and China in terms of consumer spending.

"Most parents think that smartphone gaming is not that good compared to console gaming because with consoles they can check what games are being played"

Yet it obscures the truth of an industry in flux. As mobile revenues stall in an increasingly saturated industry, so do the priority of many of the companies working in the sector. CyGames has continued to branch many of its most popular franchises such as Granblue Fantasy to console, and the company is not the only example of this.

The signs of this shift within Japan are rippling across the industry, from the Switch’s success invigorating a revolution in hybrid gaming and beyond. Indeed, last year’s Tokyo Game Show was a particular example of this phenomenon in action. As the event roared into motion, it felt like a triumphant return in more ways than one. While this was the show's second post-COVID event, the 2022 rendition was notably smaller in scope, while Japanese government-imposed COVID immigration regulations all-but barred international