Japan Digital:Business Culture, Mobile,

Games

February 9, 2014

The Hollywood Perspective

Long Duk Dong,“Sixteen Candles”

The Israeli Perspective

The Real Basis for Japanese Culture

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Rice Farming Has Moved to the Office

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Japan viewed by Hofstede’s 5 Dimensions

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- Power distance

- Individualism vs collectivism

- Masculinity vs femininity

- Uncertainty avoidance index

- Long term orientation

Role of the IndividualJapanese Artwork Western Artwork

Japanese is Very Generational

20-30 30-40 40-55+

•Digital natives•Fast moving•Gentle but risk averse

•Suffering from pension crisis

•Harder to adapt to changing workplace

•Fear becoming oyaji

•Responsibility shy in their private lives

•Fewer getting married

YUTORI Generation

BubbleSedai and upper

LOSTGeneration

AGE

LIFESTYLE

GENERATION

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Japanese young people: Real = Danger

BUBBLE COLLAPSE

KOBE EARTHQUAKE (5 YRS OLD)

STAGNATION & RECESSION

LIFE HISTORY OF A 22 YEAR OLD

EARTHQUAKE, TSUNAMI, Government Failure(21 YRS OLD)

SUBWAY TERROR(4 YRS OLD)

MOBILE VIRTUAL SNS(13YRS OLD)

POKEMON(7 YRS OLD)

SARS EPIDEMIC(12 YEARS OLD)

iMODE MOBILE WEB(8 YEARS OLD)

Self-Expression Platforms

(16 YRS OLD)

Source: Research on 20-year-olds 2010, Macromill

Gen Y: “SOUSHOKU DANSHI”DO YOU THINK YOU ARE A “SOSHOKU DANSHI”?

“Soshoku Danshi” (lit. Herbivore Men):(noun) They are men with gentle hearts. They don’t worry about being “masculine”, or greedily pursue the opposite sex. They are men that dislike being hurt and hurting others.

They are Socializers.Source: Masahiro Morioka “Heisei Danshi Zukan (Guide to Men in Heisei Era)” 10

Not a herd, but a swarm

❤❤

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YASHIMA Operation

Softbank

59.62 million(45.7%)

(29%)

(25.3%)

KDDI

■ 128 million subscriptions

Source: Bloomberg Reports, Q3 2013

Japan Operator Market Share (Jan, 2014)

Higher iOS Share than US and growing…

The Future of Mobile?

More Likely THIS is the Future of Mobile?

THIS is the Future of Mobile

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THIS is the Future of Mobile

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Maybe, THIS is the Future of Mobile

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Look to JAPAN for the Future of Mobile

Japan 1st market to near saturation

• Media / Video (most popular category)• Photos• Shopping • Lifestyle• Tools

Mandatory tablets in all K-12 classrooms

Japan: Networks Change Behavior

Japan LTE deploymentsclustered in Tokyo

Say こんにちは to Phablets

Growth / decline in ad-spend by category, 2010-2012

TotalAd

spendNewspaper Magazine TV Radio Digital Ads

Balloon Fishing

http://www.youtube.com/watch?v=j-6jn4Qo76E

Social Gaming Market Size : $5 billion USD in 20132010 2011 2012 2013

Annual Market Size(unit: 100 million Yen)

¥1,064 ¥2,385 ¥3,394 ¥4,135

Market size (monthly) 89 199 283 345

ARPU (monthly) 2365 3775 4635 5510

Paying users (unit: 10,000)

375 527 610 626

Paying Ratio 10% 13% 15.5% 17%

Active Users (unit: 10,000)

750 810 875 920

Active User Ratio 30% 27% 25% 23%

Unique Players (unit: 10,000)

2500 3000 3500 4000

Source: UFJ Morgan Stanley

Monetization: Japan has ¼ of US Google Play downloads but highest revenues in the world

Source: AppAnnie Index, Nov, 2012

iOS: World #2 revenue despite smaller user base

• DoCoMo, Japan’s largest operator, just launched iPhone in October

• Japanese consumers ready to spend for mobile content

• Games account for >80% of revenue in Japan App Store

• Catching up to US- faster growth in Japan

Source : AppAnnie Index, Nov 2012

Japan Social Mobile Gaming Market Drivers

• Carrier billing- integration of virtual wallets into games

• Game friendly society and mobile-centric users

• Faster mobile networks• Integration between mobile

and social gaming via SNS• High disposable income,

especially women gamers• Card Battle represents 70%

of Top 20 on Gree & DeNA

2 Closed platforms- DeNA and Gree

Source: Serkantoto.com

Japan-Only Genres: Manga based social games

Bandai Namco: Gundam Royal

Japan-Only Genres: Social RPGs

Japan-Only Genres: Social Dating/ Love Simulation

Special Genres: Social Idol Raising Games

Special Genres: Social Card Battle Games

Building a Successful Mobile Game in Japan

• Focus on popular genres- RPG (21%) & Romance (18%) popular on mobile

Localized marketing with celebrities and events

Prevent abandonment with easy game-play

Target female players with genre, art & game flow

Simple, colorful and streamlined UI