Japan is the Innovator of the Gaming Industry
Japan is a powerhouse in the gaming industry, ranking as the third biggest gaming market in the world behind the US and China in terms of revenue. In 2021, it accounted for 16 percent of the global market size, valued at $29 billion, according to GlobalData.
Japan is home to iconic industry names, such as Nintendo, Sony, Capcom and Bandai Namco as well some of the most popular game franchises. Though the world’s first video game, “Space War!”, an arcade game, came out of the US in 1962, Japan responded with its own video games, in the form of Astro Race and Space Invaders, released in 1973 and 1978, respectively. Since then, Japan has made its mark on the billion-dollar industry, producing some of the most popular video games in history. Japanese video games, including Zelda, Sonic the Hedgehog, Super Mario Bros., and Final Fantasy have become household names, reaching far beyond the confines of the gaming community. Many of these franchises now extend into films, theme parks, animated series and merchandise stores.
There’s no doubt that Japan has shaped the landscape of video games into the one we know today and has constantly raised the bar when it comes to innovation. Certainly, Japan’s creativity has kept the industry on its toes, making it something of a spiritual home of video gaming.
The Development of Japan's Franchises
Super Mario
The evolution of Super Mario, one of gaming’s most iconic franchises, reflects the broader advancements in video game technology and design. The series began with Donkey Kong in 1981, where Mario debuted as “Jumpman.” In 1985, Super Mario Bros. for the NES redefined platform gaming with its side-scrolling levels, tight controls, and imaginative worlds. Subsequent titles, such as Super Mario 64 (1996), pioneered 3D gaming, introducing a fully explorable environment and setting new standards for game design.
Each major release in the franchise, from Super Mario Galaxy (2007) with its innovative gravity-defying mechanics to Super Mario Odyssey (2017) offering a vast, open-world experience, showcased Nintendo’s ability to blend creativity with cutting-edge technology. The evolution of Super Mario has not only pushed the boundaries of what games can achieve but also cemented Mario’s place as a timeless cultural icon in the gaming industry.
The Legend of Zelda
The Legend of Zelda series has been marked by its advanced gameplay and storytelling. Starting with the original Zelda in 1986, it introduced players to a vast, open-world exploration experience and 3D gaming. Each instalment has expanded the boundaries of adventure games.
Sonic the Hedgehog
Sonic the Hedgehog debuted in 1991, quickly becoming Sega’s mascot with his fast-paced gameplay and vibrant levels. The original Sonic games on the Genesis/Mega Drive focused on speed and platforming, featuring iconic zones like Green Hill. Over the years, Sonic evolved from 2D side-scrollers to 3D adventures, with titles like Sonic Adventure (1998) introducing fully 3D environments. Over the years, the series has continued to innovate, including a return to its roots with Sonic Mania (2017), blending classic gameplay with modern design.
Final Fantasy
Final Fantasy launched in 1987 and quickly became a cornerstone of RPGs. The series is known for its storytelling, character development, and groundbreaking graphics. Each instalment explores new worlds and systems, with Final Fantasy VII (1997) revolutionising the genre through its 3D graphics and deep narrative. Later titles, like Final Fantasy X (2001) introduced voice acting and a more cinematic approach. Final Fantasy XV (2016) brought open-world exploration and real-time combat.
It is this constant innovation and Japan’s sturdy technological infrastructure that has seen the nation lead the development of the most popular games, controllers, hardware, software and a gaming culture that ensures Japan is top of mind when it comes to gaming powerhouses.
Advancements in Gaming Technology
In 2023 video gaming giants, including Japanese-American multinational Sony Interactive Entertainment and American corporations Microsoft and EA, experienced mass layoffs and cancelled games. The cutbacks were in response to a post-pandemic downturn in gaming and market oversaturation. With the rise in mobile gaming, smaller names have emerged, making the industry even more competitive and squeezing bigger competitors.
One of the recent developments is the rise of location-based gaming, particularly through augmented reality (AR). Games like Pokémon GO, developed by Niantic in collaboration with Nintendo, have transformed urban spaces into interactive gaming environments. This trend continues to evolve with more sophisticated AR and mixed reality experiences, blurring the line between the virtual and real worlds. These location-based games are some of the biggest drivers of Japan’s gaming industry, boasting a 50 percent share of the global revenue in this sector, according to data from Sensor Tower. This equates to a US$600 million annual user spend. The biggest Japanese titles in the sector are Dragon Quest Walk by Square Enix, and Niantic’s Pokémon GO and Monster Hunter Now. Location-based games such as these contribute 5 percent to Japan’s huge mobile gaming industry.
Japan’s incredible success in the location-based gaming arena is attributed to local gaming studios being able to leverage their rich existing IP. This allows developers to build on existing universes and appeal to existing fan bases.
Evolutions in Gaming Lifestyle
Lifestyle factors are another contributing factor. Japan’s walkable cities and the dependency on public transport over cars make mobile gaming, including location-based games, a natural fit for the Japanese way of life.
Japan’s esports scene has also seen significant growth, fueled by increasing interest and infrastructure investment. The opening of esports parks, such as RED° TOKYO TOWER and Tokyo Joypolis, provide dedicated spaces for competitive gaming, with state-of-the-art facilities for training, tournaments, and spectating. These venues cater to both amateur and professional players, promoting esports as a mainstream activity in Japan. The integration of advanced gaming technology in these parks, along with support from major game developers, has helped Japan establish itself as a key player in the global gaming arena, bridging traditional gaming with cutting-edge experiences. With its continued investments into the gaming industry, Japan is set to be an industry leader for many years to come.