Research Summary
The report discusses the potential growth of Japanese gaming companies in 2024, highlighting the country’s strong position in the global gaming industry. It also explores the impact of regulatory changes in China and the West, the rise of PC gaming in Japan, and the potential of Japanese companies to capitalize on their rich IP history.
Key Takeaways
Japanese Gaming Industry’s Potential Growth
- Robust Revenue Growth: The report predicts a strong year for Japanese game publishers, with robust revenue growth expected in 2024. This is based on the solid performance of most major Japanese gaming companies in 2023 and the forecasted rise of 13% in the TOPIX, an index of Japanese stocks that includes major gaming companies.
- Beneficiary of Chinese Regulatory Changes: The report suggests that Japan could benefit from the recent anti-gaming moves by the Chinese government. This has led Chinese publishers like Tencent and NetEase to seek investment opportunities elsewhere, with Japan being one of the major beneficiaries.
PC Gaming and Console Dominance
- Surge in PC Gaming: The report highlights the surprising growth of the PC gaming segment in Japan, which saw a 43% growth in 2022. Sony has been a major player in this area, with the head of PlayStation Studios stating that PC has become a substantial part of their business.
- Console Market Leadership: Sony maintains a significant lead over Microsoft in the console market, with the PlayStation 5 outselling Xbox Series X/S at a nearly three-to-one margin in 2023. The report also anticipates the arrival of Nintendo’s new console, which could further strengthen Japan’s dominance in the console hardware segment.
Rich IP History and Future Prospects
- IP Recycling: The report notes the trend of mining old IP for profit via remakes, remasters, and reissues. Given Japan’s foundational role in the establishment of the game industry, Japanese publishers have a deep well of IP to draw from for these initiatives.
- Anticipated Titles: The report mentions several highly anticipated titles set to debut in 2024 from Japanese publishers, including Square Enix’s Visions of Mana, Bandai Namco’s Tekken 8, and Capcom’s Dragon’s Dogma 2.
Actionable Insights
- Monitor the Japanese Gaming Market: Given the predicted growth and the potential impact of regulatory changes in China, it would be beneficial to closely monitor the performance of Japanese gaming companies in 2024.
- Research the Potential of PC Gaming in Japan: With the surprising growth of the PC gaming segment in Japan, it would be worthwhile to explore the factors contributing to this trend and the potential opportunities it presents.
- Assess the Impact of IP Recycling: Given the trend of mining old IP for profit, it would be insightful to assess the impact of this strategy on the revenue and growth of Japanese gaming companies.
