Online gaming
| Games -- From Television to Online and Handheld |
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Although video gaming leadership has been synonymous with Japanese game makers, South Korea sees gold in gaming for its computer industry. Korea has been quick to set up national initiatives to put its software providers at the forefront of online gaming. Will the Japanese hold onto its video gaming leadership? And what strategy needs to be adopted to meet the challengers?
"TV games, known as "video games" throughout Europe and the United States, much like karaoke and the old ukiyo-e, or "floating world" wood block prints, are all well-known throughout the world as popular culture originating from Japan. Shipments of Sony Computer Entertainment (SCE)'s Playstation 2 have surpassed 70 million units, and over 80% of all game machines made in Japan are destined for export," according to a report from the Nikkei Shimbun. On the other hand, in recent years, sales of game machines and software in the Japanese market have been on the decline. In the U.S. software market, Japan has seen its share dwindle from a high of 50%.
While the Japanese TV game market stagnates, the spread of handheld games is nothing short of remarkable. In addition, the worldwide conversion from game machines to online gaming continues. The 2003 Japanese market for online games was probably no more than 20 to 30 billion yen, with the global market worth around 550 billion yen. But, according to a forecast by the South Korean government, this is likely to jump by over a two-fold growth during the 2-year period of 2004-2005. That forecast, however, calls for only 28% growth in the TV game market during the same period.
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Based on these predictions, the South Korean government has declared online gaming a national industry and implemented a number of protective measures, including eliminating the special consumption tax for games, establishing limits on the floor space of game centers, reconsidering limits on game center operating hours, and creating special military service exemptions for pioneers in the online gaming field. These measures have already allowed the country to capture 10% of the global online gaming market. Even for mobile phone games, experts feel that the South Korean market has already entered the shakeout phase, earlier than in other countries.
But what about Japan? For developments in the Japanese game industry last year, two handheld games hit the market - Nintendo's "Nintendo DS" and SCE's "Playstation Portable." In addition, there were new releases in time-tested major game series known as "Dragon Quest." The healthy sales suggest a market recovery. But, just as Japanese ship makers found themselves chasing an evaporating market when the focus of the Second World War shifted from the sea to the sky, the target here is not staying still.
| 2003 Worldwide Exports of Japanese Game Machines & Software |
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| Source: 2004 Game White Paper, CESA. |
If Japanese manufacturers act with typical first-mover conservatism, pursuing only big contracts for the original game machines and for major software packages, a challenge may await them in their attempts to succeed in the diverse media game markets of online games and mobile phones.
