What’s Going on With Japan’s Esports Industry? (2024)

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Games:

Dota 2, League of Legends, Rocket League

Japan is home to many companies synonymous with gaming: Nintendo, Sony, Namco Bandai, and Konami, to name a few. However, none of these companies are known for making competitive titles, outside of the fighting genre. In the country itself, the idea of tournaments and gaming as a spectator sport has only recently started to catch on. In the latest episode of The Esports Observer podcast, Paolo Gianti, a business development manager in Japan’s gaming industry, explained how esports managed to spring from nothing, and what is still holding it back.

A Gaming Market Without Competition

With 67.6M total players, the Japanese gaming market remains the third largest in the world. Even compared to China, which sits at number two, Japan continues to import dozens of franchise releases to western markets, such as Mario, Final Fantasy, Metal Gear, Pokémon, and Resident Evil. Paolo Gianti, director of strategic partnerships and global business at QBIST, and a former executive at Nintendo Europe, explained that the Japanese market is still difficult to penetrate, even for other Asian companies.

“Because of this, the most popular games, also on mobile, are obviously developed by Japanese companies,” he explained. “It’s quite difficult to see some successful games come from foreign countries, even in the top 20 or 30. So, this is a very peculiar market…The easiest example I can make is when it comes to PS4, which in Japan has sold 7.5M units, but the Xbox One we’re onlytalking about 100K.”

[perfectpullquote align=”right” cite=”” link=”” color=”” class=”” size=””]“MOBA games, as a whole, are not really popular here in Japan.”[/perfectpullquote]

This distinction does partly explain why esports-heavy titles such as League of Legends, Dota 2, or Rocket League—all developed by Californian game companies—have little to no presence in Japan. Most reporting has focused on Japan’s strict gambling laws as a root explanation behind esports’ slow growth, but according to Gianti, the problem lies more in culture than legislation.

“MOBA games, as a whole, are not really popular here in Japan,” he said. “Actually, any game that requires building up a team and cooperating with somebody else is struggling here in Japan. At the same time, Japanese people love to play against the CPU, because this avoids human interaction, and they prefer avoiding a real person that disturbs them while they train.”

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Fighting games—which are typically one-vs-one—have remained historically huge in Japan since Capcom released the seminal Street Fighter II in 1991. However, a distinction is still made between gaming tournaments, or “game taikai” (ゲーム大会), and the westernized portmanteau esports. “Luckily this trend is changing a bit as well. You can see on TV commercials about “esports”, so the word esports is becoming more widespread.

Related Article: JESU’s Akihito Furusawa on Growing Esports in Japan

From Slow Progress to Pro Player Licenses

A key player in Japan’s recent esports industry growth has been the Japanese Esports Union (JESU). The union includes 26 companies as members, including key gaming advisors such as Sony, Tencent Japan, and Namco Bandai. “They also work to give players licenses to be considered pro esports players here in Japan,” said Gianti. “There is a law against releasing money prizes above ¥100K ($921 USD), if via a tournament you promote a product, in this case, a game.”

[perfectpullquote align=”right” cite=”” link=”” color=”” class=”” size=””]”It’s kind of a partnership between JESU and Tokyo city. Which is huge because we are talking about more than 15M people in the area.”[/perfectpullquote]

By introducing the licenses after its formation, JESU offered a way to circumvent this law. Now 130 players can enter competitions with much higher prize pools, however, Gianti noted that this system may close part of the industry that has yet to bloom. “The companies that are not handpicked by JESU obviously have a harder time to be recognized in Japan as esports entities.”

The introduction of esports into essential Japanese gaming events has also attracted the attention of domestic companies. JESU introduced esports into 2018’s Tokyo Game Show program, with domestic companies such as distillery Suntory, convenience store chain Lawson, and clothing brand Beams all supporting the event.

At the start of the new year, it was also announced that the Tokyo government would be hosting an esports event with ¥50M ($460K) of its fiscal 2019 budget. “It’s kind of a partnership between JESU and Tokyo city,” said Gianti. “Which is huge because we are talking about more than 15M people in the area…especially looking at the fact that it is going to happen one year before the Olympic games next year.”

The TEO Podcast is available on bothiTunesandSpotify.