Team Finland Future Watch Report: 30 signals covering 3 markets in Japan
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    Team Finland Future Watch Report: 30 signals covering 3 markets in Japan Team Finland Future Watch Report: 30 signals covering 3 markets in Japan Document Transcript

    • 30 Signals Covering 3 Markets in Japan
    • Contact information Organization Members Research and Consulting Division, Japan Research Institute 2-18-1 Higashi-gotanda, Shinagawa-ku Tokyo 141-0022 JAPAN PHONE:+81-3-6833-0900 FAX:+81-3-6833-9480 Project Leader Koji YAMAURA (Associate Senior Consultant) yamaurakoji@jricojp +81-3-6833-5369 Adviser Hideyuki ASAKAWA (Senior Consultant) asakawahideyuki@jricojp +81-3-6833-2815 Project Members Yohei KOTAKE (Consultant) kotakeyohei@jricojp +81-3-6833-6333 Yuki KUWABARA (Consultant) kuwabara.yuuki@jri.co.jp +81-3-6833-6587 Assistant Takako IMAI (Assistant) imai.takako@jri.co.jp +81-3-6833-1562 Tekes – the Finnish Funding Agency for Innovation Tekes is the main public funding organisation for research, development and innovation in Finland. Tekes funds wide-ranging innovation activities in research communities, industry and service sectors and especially promotes cooperative and risk-intensive projects. Tekes’ current strategy puts strong emphasis on growth seeking SMEs.
    • 2 S-1 Feed-in Tariff Scheme for Renewable Energy Message The Feed-in Tariff Scheme for Renewable Energy plays an important role to promote the popularization of renewable energy in Japan, as self- sufficiency rate is low and there is some uncertainty about the possibility in the use of nuclear energy. Summary Under the Feed-in tariff scheme for renewable energy, the regional electric power utilities required to purchase the electricity generated by solar, wind, hydro, geothermal, and biomass power at the fixed prices. Since the scheme was introduced in July 2012, the generation capacity has been increasing and reached 3.7 million kW (about 90% of the capacity is consist of solar energy). Hereafter, the balance of the popularization of renewable energy and increasing electricity rate should be carefully watched. [A]Rating This scheme is basis for popularization of renewable energy and important as a national energy policy. [A]Macro Viewpoint [A]Consistency with policy trends · Self-sufficient rate is low in Japan and popularization of renewable energy is important. [B]Consistency with the technology trends [B]Consistency with economic trends [A]Consistency with the social trends · The number of people who think they should not use nuclear power has increased since the Fukushima crisis occurred. [B]Micro Viewpoint [A]Market impact · The scheme promotes the investment in renewable energy, especially in solar power. [B]Spirit of innovation [B]Uniqueness [Figure] Feed-in Tariff Scheme for Renewable Energy (Source)METI “the Guidebook of Feed-in Tariff”
    • 3 S-2 Electric Power Liberalization Message The issue of electric power liberalization is important because it has possibility to change the structure of Japanese electricity market drastically. Summary As a part of introduction of competition and deregulation in various fields, Japan’s government is moving towards the liberalization of the electricity market. After the Great East Japan Earthquake, a lot of new electricity retailers, often referred to as “power producers and suppliers,” have been spawned (109 companies by now). Hereafter, electricity retail market is planned to be liberalized in 2016, and power generation and transmission are planned to be separated between 2018 and 2020. [A]Rating This is an important issue because there is a possibility that the structure of electricity market which has been stable for a long time will be drastically changed. [A]Macro Viewpoint [A]Consistency with policy trends · This issue is consistent with the policy trend of the deregulation in various fields. [B]Consistency with the technology trends [A]Consistency with economic trends · This issue is consistent with the trend of introduction of competition in various fields. [B]Consistency with the social trends [A]Micro Viewpoint [AA]Market impact · The stable supply of electricity will be secured. · The competition in the generation market will promote efficiency and suppress electricity bill increase. · The business opportunity will be expanded. [B]Spirit of innovation [B]Uniqueness[Figure] The Entry Situation of new electricity retailers (Source) METI “Liberalization of the retail electricity market” (October 2013)
    • 4 S-3 Leadership in Standardi- zation of Smart City Message The standardization of Smart City is important in the view of global spread of technology and reinforcement of Japan’s competition in this market. The point is that Japan, which is said to be poor at standardization, is taking initiative. Summary METI is strategically working on the global standardization of Japanese infrastructure industry in corporation with public-private collaboration. The number of proposals for ISO/IEC global standardization increased, and The number of acceptances as ISO / IEC secretariat also increased to reach almost the same level as UK and France. The increase of the budget for the global standardization is expected to accelerate such efforts. [A]Rating Japan started to take initiative in the standardization process that promotes the spread of the service, which is important from the point of view of both macroscopic view of the worldwide spread of the technology and microscopic view of reinforcement of Japan’s competition in the market. [A]Macro Viewpoint [A]Consistency with policy trends · The theme is positioned as one of the three pillars of the infrastructure strategy of Abenomics’ growth strategy. [A]Consistency with the technology trends · As the technologies have been developed in the field of Smart City, standardization plays a key role for spread of the services. [B]Consistency with economic trends [B]Consistency with the social trends [A]Micro Viewpoint [A]Market impact · The government aims to triple the exports of infrastructure systems by 2020. [B]Spirit of innovation [A]Uniqueness · The government aims to cooperate with emerging countries like ASEAN nations and to make Japanese technologies become de facto standard by utilizing ODA. [Figure] the number of acceptances ISO/IEC secretariat (Source) METI “Efforts of international standardization to 2014” [Figure] Japanese Proposals for International standardization
    • 5 S-4 Developments in Smart City by government supports Message In Japan, many innovative projects about Smart City have received financial supports from the government. To commercialize the results of those projects, government supports are still needed. Therefore, in order to predict the Smart City future trends in Japan, it is necessary to understand the concepts of the ministries and agencies. Summary In japan, many innovative projects about Smart City have received financial supports from the government. To commercialize the results of those projects, government supports are still needed. Therefore, in order to predict the Smart City future trends in Japan, it is necessary to understand the concepts of the ministries and agencies. [A]Rating Concepts ministries and agencies think are policies themselves. Therefore, in order to conduct Smart City Projects, it is necessary to understand the concepts of ministries and agencies. [A]Macro Viewpoint [A]Consistency with policy trends · Concepts ministries and agencies think are policies themselves. [A]Consistency with the technology trends · Technical studies have been included as a theme. [A]Consistency with economic trends · Job creation and revitalization of the rural economy has been included as a theme. [A]Consistency with the social trends · Resolution of regional issues has been included as a theme. [A]Micro Viewpoint [A]Market impact · Market for Smart City industry in the world is estimated at 4,000 trillion yen in total by 2030. [A]Spirit of innovation · Through the initiative of the government, innovation is encouraged. [A]Uniqueness · Features of Smart City initiative in METI, is that the transportation infrastructure has been studied. It is not limited to energy. [Figure] Smart city concepts by Japan’s government (Source) The Japan Research Institute Ministry Concept Year Goal Construction of a system for managing overall energy including - Electricity - Heat - Transportation To solve problems by ICT - disaster risk reduction and disaster - Regional issues - Job creation and economic revitalization MAFF Smart Village *** Building an integratedmanagement system for renewable energy in units of local area Cabinet Office Environment Future City 2011 Creation of best practices to overcome aging andenvironmental issues as an environment MIC ICT Smart Town 2012 METI EV・PHV Town 2009 Widespreaduse of EV and PHV METI Smart Community 2009
    • 6 S-5 Next- Generation Energy and Social Systems Demonst- ration Project Message As “Next-Generation Energy and Social Systems Demonstration Project” conducted by METI is regarded as the main project of the Japanese demonstration project related to Smart City, it is worth gathering information. Summary Concurrently, in Japan There are four major demonstration tests of Smart Grid technologies: Yokohama in Kanagawa, Toyota in Aichi, Keihannna Science City, and Kitakyushu in Fukuoka. These projects are subsidized by METI as Next-Generation Energy and Social Systems Demonstration Project. This project is planned to last for 5 years till 2015. [A]Rating The Next-Generation Energy and Social Systems Demonstration Project in the four regions are important because it is leading Japan’s Smart City demonstration. [A]Macro Viewpoint [A]Consistency with policy trends · This project is based on the national growth strategy. [A]Consistency with the technology trends · The technologies to implement smart cities are developed. [A]Consistency with economic trends · The investment in Smart City is accelerated. [B]Consistency with the social trends [A]Micro Viewpoint [A]Market impact · Some estimates suggest that by 2030 US$ 40 trillion must be invested in urban infrastructure worldwide to keep pace with urban population growth. [A]Spirit of innovation · This project aims to export the Japanese Smart City technology. [B]Uniqueness [Figure] The factors required for demonstration project (Source)METI ”Selection of Next-Generation Energy and Social System Demonstration Areas” * Ambition targets for energy savings and CO2 emissions reduction, and large-scale deployment of renewable energy * Establishment of an energy management system for each site of energy consumption and at a regional level. * Establishment of a complementary relationship between regional energy management and large-scale networks. * Efficient use of energy in a transport system that includes next-generation vehicles and railways. * Participation of not only the local government but also energy-related companies, system manufacturers, and other users * Life style innovation etc.
    • 7 S-6 Community Energy Management System Message As a part of the Kitakyushu Smart Community Creation Project, a Community Energy Management System (CEMS) was put into operation in April 2012 to manage energy supply and demand in the community.They started the trial adoption of dynamic pricing of electricity, which is pioneering and remarkable in the world.. Summary As a part of the Kitakyushu Smart Community Creation Project, a CEMS was put into operation in April 2012 to manage energy supply and demand in the community. In addition to introducing as many sources of renewable energy as possible, in order to reduce CO2 emissions, the goal is to balance supply and demand across the entire community and level the load, and ensure the quality of the power supply.Smart meters have been installed in 230 households and 70 businesses to collect and transmit information. The base contract for electricity demand has been increased to 21MW. [A]Rating The trial adoption of dynamic pricing of electricity is pioneering and remarkable in the world. [A]Macro Viewpoint [A]Consistency with policy trends · This project is based on the national policy. [A]Consistency with the technology trends · EMS is essential technology for the Smart City. [B]Consistency with economic trends [B]Consistency with the social trends [A]Micro Viewpoint [A]Market impact · The market of energy management service will be created. [AA]Spirit of innovation · The project revealed that dynamic pricing is statistically effective in energy saving for the first time in the world. [B]Uniqueness [Figure] CEMS in the Kitakyushu project (Note) * “DR”: Demand Response. (Source)Fuji Electric
    • 8 S-7 Success of the Demon- stration Experiments of Demand Response Message The demonstration experiments of demand response have shown successful results and validation for commercialization will take place as a next step. Summary Japan’s utilities have turned their attention to demand-side management as the industry continues to contend with generation limits in the wake of the Fukushima nuclear disaster in March 2011. The government is already pushing building energy management systems out of the lab and into building stock. The OpenADR Alliance is working with Waseda University on a research project for METI in cooperation with a dozen of companies. [B]Rating Although there has been a lot of technology investment in the country, it is unclear where, how and when demand response will play out in Japan. [A]Macro Viewpoint [A]Consistency with policy trends · Expert Committee on the Electricity Power Systems Reform of METI refers to the importance of the use of demand response systems. [A]Consistency with the technology trends · International standardization is now progressing and Japan is in line with it. [A]Consistency with economic trends · Introducing demand response system prevent from economic loss due to power shortage. [A]Consistency with the social trends · The system is consistent with the trend that people are keen on energy saving [B]Micro Viewpoint [B]Market impact · It is uncertain if there is much room for energy saving by use of demand response system because the Japanese have long been energy conservationists from cultural points. [B]Spirit of innovation [B]Uniqueness [Figure] Image of the demonstration experiment by Osaka gas (Source)Osaka gas web page
    • 9 S-8 Advance from test phase to commercial phase Message Smart city is proceeding from test phase to commercial phase, and the number of such case will increase. Summary Smart city is proceeding from test phase to commercial phase. In “Fujisawa sustainable smart town” project in Kanagawa-ken Fujisawa-shi which is one of the commercial phase projects, it is intended to build a city block with commercial facilities, hospitals, and public facilities by investing 60 billion yen, with 3,000 people living. The development of smart cities like Fujisawa will be accelerated hereafter. [A]Rating Smart city is proceeding from test phase to commercial phase, and the number of such case will increase. [B]Macro Viewpoint [A]Consistency with policy trends · The promotion of Smart City is considered an important policy. [B]Consistency with the technology trends [B]Consistency with economic trends [B]Consistency with the social trends [A]Micro Viewpoint [A]Market impact · 60 billion yen will be invested. [A]Spirit of innovation · It is coming to commercialized phase with various innovations composed. [B]Uniqueness [Figure] Fujisawa Sustainable smart town (Source) Panasonic IR information Participating companies Role Panasonic Integrator Accenture Planning ORIX Mobility sharing NIHON SEKKEI Planning of installation Sumitomo Mitsui Trust Bank Housing loans TOKYO GAS Home fuel cell PanaHome Sale of smart houses Mitsui Fudosan Sale of smart houses Mitsui & Co. Health care service NTT EAST Telecommunication platform Dentsu Energy andHealth care service etc. Summary of the project 60 billion yen 1,000houses(all smart houses) Solar panel in the public spaces Share service of electric car
    • 10 S-9 Composition of Nikkei Smart City Consortium Message The Nikkei makes recommendations on realization of Smart City by sharing and transmitting information through their “Nikkei Smart City Consortium”. Summary The Nikkei started “Nikkei Smart City Consortium” with the specialists of environment, energy, and urban problems, municipalities and companies. The Nikkei makes recommendations on realization of Smart City by sharing and transmitting information through the symposium, general meeting, and special web site. [B]Rating Although the consortium is important as a place to collect information, it is not sure that it drives the promotion of Smart City in Japan. [B]Macro Viewpoint [A]Consistency with policy trends · The promotion of Smart City is an important policy. [B]Consistency with the technology trends [A]Consistency with economic trends · The cost to collect information is reduced. [B]Consistency with the social trends [B]Micro Viewpoint [A]Market impact · Collected information motivates companies. [B]Spirit of innovation [B]Uniqueness [Figure] Image of the Nikkei Smart City Consortium. (Source)the Nikkei Smart City Consortium web page
    • 11 S-10 Community Oriented Stand-by MObility Service (COSMOS) Consortium Message Consortium for the new market creation and community revitalization using a new vehicle of 1-2 seaters is formed by JRI. Summary Consortium for the new market creation and community revitalization using a new vehicle of 1-2 seaters is formed by JRI. The members of the consortium are transportation equipment manufacturers, telecommunications equipment manufacturers, transportation operators, real estate developers, general contractors, municipalities, and local communities. At the consortium, the members are going to research the needs and consider necessary law and technology. [A]Rating The consortium is important from the point of view of both macroscopic view and microscopic view. But, there are many items to consider because it has just been established. [A]Macro Viewpoint [A]Consistency with policy trends [A]Consistency with the technology trends · It would make innovation to develop one-seater electric car and smartphone technology. [A]Consistency with economic trends · By increase of movement of residents, the economy of the region is activated [A]Consistency with the social trends · The number of people which are difficult to move the city due to reduction or abolition of public transport and increase of the elderly and children. [A]Micro Viewpoint [A]Market impact · It is easier for company to attract customers because residents are able to come to the storefront more easily. [A]Spirit of innovation · It is new regional transportation service which contributes to the local activation by Activation of the traffic of residents. [A]Uniqueness · Same mechanism does not exist. [Figure] The news release about the COSMOS (Source)JRI website
    • 12 G-1 Legalization of Casino Gambling Message Legalization of Casino Gambling is going to be submitted during the current Diet session, and Casino in Japan could be opened just before the Tokyo 2020 Olympic Games. According to Citi Research, Revenue of Japanese Casino has the potential to be $ 15 billion of two times the Las Vegas revenue. And it is expected to contribute to the economic growth of the country. Summary Diet members caucus for legalization of Casino Gambling in Japan are going to submit legislation that would allow casinos to operate in the country during the current Diet session, and they could open just before the Tokyo 2020 Olympic Games. One of the Diet member caucus’s top advisers is Japan Prime Minister Abe. Legalization of Casino Gambling is expected to contribute to the economic growth of the country. Foreign companies associated Casino Gambling business are expected to enter the Japanese market. [A]Rating Legalization of Casino Gambling is very important for the economic growth of Japan because it could encourage business investment and produce jobs. [A]Macro Viewpoint [A]Consistency with policy trends · Japan Prime Minister Abe is showing a positive attitude to the legalization. [B]Consistency with the technology trends [B]Consistency with economic trends [A]Consistency with the social trends · Holding of the Olympic Games and Paralympic 2020 provides a critical boost to the legalization of Casino Gambling in Japan. [A]Micro Viewpoint [A]Market impact · Investment for one Integrated Resort including Casino is expected to be more than 10 billion yen. · Revenue of Japanese Casino has the potential to be $ 15 billion of two times the Las Vegas revenue according to Citi Research which is group companies of City Bank. [B]Spirit of innovation [B]Uniqueness [Figure] Revenue of Casino Gambling by country (Source) The Japan Research Institute summarized from public information 51 58 235 150 0 50 100 150 200 250 Singapore Las Vegas Macau Japan USD Billion
    • 13 G-2 The Regulations Banning "Complete Message Japanese government banned "complete gacha" which was the most popular billing system in social games on July 2012. But the regulations did not have a big impact on the business performance of social game operators and the prevention of high claim. Summary Japanese government banned "complete gacha" which was the most popular billing system in social games on July 2012. Kompu gacha, or “complete gacha” is a monetization mechanic in social games that heavily incentivizes the practice of gacha — paying a small amount of money to get an item at random, similar to purchasing toys from a vending machine. The regulations did not have much influence on the business performance of social game operators and had little effect on the prevention of high claim. If the number of trouble by social game is more increased, additional regulations may be imposed in the future. [B]Rating The regulations is not very important because it had little effect on social game business in Japan. [A]Macro Viewpoint [A]Consistency with policy trends · Japanese government banned "complete gacha" [B]Consistency with the technology trends [B]Consistency with economic trends [A]Consistency with the social trends · Increase of trouble by social game. [B]Micro Viewpoint [B]Market impact · The impact of the regulations on social game business in Japan is small. [B]Spirit of innovation [B]Uniqueness · In Europe and the United States, a mechanism such as "Konpugacha" already has been regulated. [Figure] Sales of DeNA’s Social game (Source) The Japan Research Institute summarized from DeNA IR materials.
    • 14 G-3 Trend of the Japanese Game Industry Message Home video game market in Japan is shrinking since 2008. On the other hand, Mobile game market is growing rapidly for the last few years. Some major home video game makers have entered the mobile game market. In the future, games geared smartphone games and home video games will be released. Summary The Home video game market in Japan is shrinking since 2008. On the other hand, Mobile game market such as social game and smartphone game is growing rapidly for the last few years. Some major home video game makers have entered the mobile game market and Some major mobile game manufacturers have entered the home video game market. In the future, games geared smartphone games and home video games will be released. [A]Rating The trend is very important because it means that the mmigration to mobile phone games from home games. [A]Macro Viewpoint [B]Consistency with policy trends [A]Consistency with the technology trends · High performance of smartphones [B]Consistency with economic trends [A]Consistency with the social trends · Rapid diffusion of smartphones [A]Micro Viewpoint [A]Market impact · Mobile game market size and home video game market size for 2012 is about the same. [B]Spirit of innovation [A]Uniqueness · It is unique to Japan to existing huge social game market whose market size is 400 billion yen. Market size of home video game (JPY 100 million) [Figure] Market size of smartphone games and home video game in Japan Market size of smartphone games(JPY 100 million) (Source) CESA “CESA Games White Paper”(each year) and YRI “The 2012 survey results on social gaming market”(2013/10)
    • 15 G-> The Rise of Smartphone Game Message Japanese smartphone game market in 2012 is 128.5 billion yen and four times as much as the previous year. Smartphone game market has the potential to exceed the home video game market in the future. Summary Japanese smartphone game market in 2012 is 128.5 billion yen and four times as much as the previous year. The market is expected to further increase because of improving the penetration of smart phones. It the future, many overseas smartphone game makers are expected to enter the market in Japan because smartphone is a universal platform. On other hand, smartphone game makers in Japan will try to provide their games to foreign market. [A]Rating Smartphone game market has the potential to exceed the home video game market in the future. [A]Macro Viewpoint [B]Consistency with policy trends [A]Consistency with the technology trends · High performance of smartphones [B]Consistency with economic trends [A]Consistency with the social trends · Rapid diffusion of smartphones [A]Micro Viewpoint [A]Market impact · Japanese smartphone game market is expected to reach the scale of about half of the home video game market the in two or three years. [A]Spirit of innovation · There are smartphone game makers such as “GungHo” which have grown into a global company. [B]Uniqueness [Figure] market size of smartphone game in japan (Source) JOGA’s Online game market research report 0 200 400 600 800 1,000 1,200 1,400 2011年 2012年 USD 100 Million 4 times
    • 16 G-5 The Drop in Performance of GREE Message Performance of GREE is deteriorating rapidly. It may show the decline of social game for feature phones. It encourages the change in direction of the mobile phone, smartphone game makers. Summary Net income of GREE July-September period in 2013 was 2.4 billion, 73% year-on-year decline. And The Operating income was 9.7 billion yen, 38% year-on-year decline. The company decreased sales and profit for the first time after the listing. The drop in performance of GREE shows the decline of social game for feature phones. In the future, it will be more important for mobile game makers to develop highly interesting game as “Pazudora” which “GungHo” provides. [A]Rating It is very important because it encourages the change in direction of the mobile phone, smartphone game makers. [A]Macro Viewpoint [B]Consistency with policy trends [A]Consistency with the technology trends · Upgrading of mobile games and increase in development costs of mobile game. [B]Consistency with economic trends [A]Consistency with the social trends · Rapid diffusion of smartphones [A]Micro Viewpoint [A]Market impact · The decline of huge social game market in Japan has a high impact. [B]Spirit of innovation [A]Uniqueness · It is unique to Japan to existing huge social game market whose market size is 400 billion yen.[Figure] Changes in operating income, net income and sales of GREE (Source) GREE IR materials -5,000 0 5,000 10,000 15,000 20,000 25,000 30,000 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 1Q 7-9 2Q 10-12 3Q 1-3 4Q 4-6 1Q 7-9 2Q 10-12 3Q 1-3 4Q 4-6 1Q 7-9 Sales Operating income Net income JPY Million JPY Million 73% year-on-year decline 2011 2012 2013
    • 17 G-6 The Dichotomizat ion of Japanese Games Message There are only two types in Japanese game market. One type is global game which is aimed at global hit and another type is Japan-only game which is released only in Japan. Summary There are only two types in Japanese game market. One type is global game which is aimed at global hit and another type is Japan-only game which is released only in Japan. In the market, domestic games are very popular and foreign games which even become a big hit in the world are not popular. Japanese games meet the needs of “escapism”, on other hand foreign games meet the needs of "self- realization". It is very difficult for Japan- only games to become a real hit in the world because most of the games are produced based on Japanese cartoon film and comic’s characters. [B]Rating It is not a huge change because it has little effect on Japanese game market and Japanese game makers. [B]Macro Viewpoint [B]Consistency with policy trends [B]Consistency with the technology trends [B]Consistency with economic trends [B]Consistency with the social trends [B]Micro Viewpoint [B]Market impact [B]Spirit of innovation [A]Uniqueness · Japanese games which meet the needs of “escapism” are unique to Japan. [Figure] The dichotomization of Japanese games (Source) The Japan Research Institute dichotomization Japanese game market Global Game * it is aimed at global hit ex:"Pokemon", "BIO HAZARD", "Final Fantasy" Japan-only game * it is released only in Japan * it is often produced based on Japanese anime and manga Global Popular Foreign Games Global game market × ×
    • 18 G-7 New Movement under the Influence of Social Games on Home Video Message Some home video game makers in Japan started to introduce some new movements to their home video games. In the future, Japanese game makers could introduce various new movements. Summary There are new movements under the influence of social games on home video game. For example, some home video games are sold only by Internet delivery, New series of popular games such as “Dragon Quest” and “Final Fantasy” changes from offline RPG to MMORPG, and Introduction of Free-to- play & micro transaction. If home video game market in Japan is shrinking, Japanese game makers will introduce various new movements. [B]Rating It is not very important because the new movements are not introduced to most of Japanese home video games. [B]Macro Viewpoint [B]Consistency with policy trends [B]Consistency with the technology trends [B]Consistency with economic trends [B]Consistency with the social trends [B]Micro Viewpoint [B]Market impact · The New movements are not introduced to most of Japanese home video games [B]Spirit of innovation [B]Uniqueness [Figure] New series of “Dragon Quest” (Source) SQUARE ENIX Website [Figure] List of home video games which have micro transaction (Source) SQUARE ENIX Website Company Game tittle Bandainamco ACE COMBAT INFINITY Bandainamco JOJO'S BIZARRE ADVENTURE Bandainamco One Piece
    • 19 G-8 “Galapagos Phenomenon” of Japanese Home Video Game Market Message In Japanese home video game market, portable game machines are more popular than stationary game machines. If this situation continues in the future, international competitiveness of Japanese game may be reduced. Summary In Japanese home video game market, portable game machines such as “PSP”, “PS Vista” and “Nintendo DS” are more popular than stationary game machines such as for ”PS3” and “Xbox”. Result of game makers in Japan had focused on portable game machine software, technical capabilities of the makers become inferior to ones of foreign makers, and the number of Japanese games which become a big hit in the world decreased. If this situation continues in the future, international competitiveness of Japanese game may be reduced. [A]Rating It is important for Japan because Japan is aiming to increase exports of Japanese contents. [A]Macro Viewpoint [A]Consistency with policy trends · “Cool Japan”:Promotion activities overseas expansion and export of Japanese content by the Government of Japan [A]Consistency with the technology trends · Soaring development costs of software for stationary game machines such as “PS3” or “Xbox”. [B]Consistency with economic trends [B]Consistency with the social trends [A]Micro Viewpoint [A]Market impact It has a big impact on international competitiveness of Japanese game and Performance of Japanese game makers which provide stationary game software. [A]Spirit of innovation · Viewed from another side, Japanese game makers are more advanced on development of portable games. [B]Uniqueness [Figure] 2009 game sales rankings of Japan and the United States Rank Type of Console Title Type of Console Title 1 DS Dragon Quest IX: Sentinels of the Starry Skies XBox Prototype 2 DS Pokemon Heart Gold / Soul Silver Wii Wii Fit 3 Wii New Super Mario Bros. Wii Wii EA Sports Active 4 DS Tomodachi Collection Wii Wii Sports 5 PS3 Final Fantasy XIII XBox UFC Undisputed 6 Wii Wii Sports Resort XBox Red Faction : Guerrilla 7 Wii Wii Fit Plus Wii Tiger Woods PGA Tour 10 8 DS Inazuma Eleven 2: Kyoui no Shinryokusha (Fire/ Blizzard) PS3 Prototype 9 Wii Monster Hunter 3 (Tri) PS3 UFC 2009 Undisputed 10 PSP Monster Hunter Portable 2nd G (PSP the Best) XBox Gohstbusters: The Video Game 11 DS Mario & Luigi RPG3!!! PS3 InFamous 12 Wii WiiFit DS Pokemon Platinum Version 13 DS Layton Kyouju to Majin no Fue Wii Mario Kart Wii 14 DS Kingdom Hearts 358/2 Days XBox Tiger Woods PGA Tour 15 PS3 Yakuza 3 Wii Punch Out 16 PS3 Resident Evil 5 (PS3) DS New Super Mario Brothers 17 Wii Mario Kart Wii Wii Wii Play 18 PSP Phantasy Star Portable 2 DS Mario Kart DS 19 DS Rhythm Tengoku Gold PS3 Red Faction: Guerrilla 20 DS Pokemon Mystery Dungeon Soranotankentai PS3 Tiger Woods PGA Tour Japan USA (Note) * “blue cell ": it means that game software is for portable game machines. (Source) public information
    • 20 G-9 The rise of GungHo Online Entertainment Message GungHo Online Entertainment is extending the performance because of a big hit of a smartphone game “Puzzle & Dragons”. And its overseas development is also progressing smoothly. In the future, the number of game makers will increase, which make a big breakthrough by a big hit of one content. Summary GungHo Online Entertainment which is smartphone game makers and Subsidiary of Softbank extend the performance because of a big hit of a smartphone game “Puzzle & Dragons”. Sales of interim results in June 2013 was 10.4 times year on year to 74.6 billion yen and the operating income was 44 times year on year to 45.1 billion yen. In both South Korea and North America the software has been downloaded more than 1 million, and overseas development is progressing smoothly. If smartphones are more popular worldwide in the future, the number of game makers will increase, which will make a big breakthrough by a big hit of one piece of content such as GungHo Online Entertainment. [A]Rating The rise of GungHo Online Entertainment encourages the growth of Japanese smartphone game market and leads to the global expansion Japanese game contents. [B]Macro Viewpoint [B]Consistency with policy trends [B]Consistency with the technology trends [B]Consistency with economic trends [A]Consistency with the social trends · Rapid diffusion of smartphones [A]Micro Viewpoint [A]Market impact · It increases Penetration and awareness of the smartphone games and the number of new entrants. [A]Spirit of innovation · It has attracted attention in the world as a case of rapid growth smartphone game makers. [B]Uniqueness [Figure] Changes in operating income and sales of GungHo (Source) GungHo IR materials
    • 21 G-10 The Drop in Performance of Nintendo Message The performance of Nintendo has deteriorated since 2009 due to poor sales of its new machines and a significant reduction of them. If poor sales of their game consoles continue, the company will have to change in direction. Summary The performance of Nintendo has deteriorated since 2009. Operating income was in the red for the second consecutive year in 2011 and 2012.Sales of interim results in 2013 was 2.5% year-on-year decline, and Operating income was in the red too. Cause of poor performance is a poor sales "Nintendo 3DS" and "Wii U" and a significant reduction of the two machines. If poor sales of their game consoles continue, the foundation of the business model of Nintendo will collapse and the company will have to change in direction. [B]Rating The drop in performance of Nintendo which was on the victorious side in home video game market shows the decline of home video game machine market. [B]Macro Viewpoint [B]Consistency with policy trends [B]Consistency with the technology trends [B]Consistency with economic trends [A]Consistency with the social trends · Rapid diffusion of smartphones [B]Micro Viewpoint [A]Market impact · It has a big impact on home video game machine market. [B]Spirit of innovation [B]Uniqueness [Figure] Changes in operating income and sales of Nintendo -100,000 -50,000 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 half year full year half year full year half year full year half year full year half year Sales Operating income JPY Million JPY Million Deficit has continued 2009 2012 20132010 2011 (Source) Nintendo IR materials
    • 22 N-1 Abenomics Message Legalization of Casino Gambling is going to be submitted during the current Diet session, and Casino in Japan could be opened just before the Tokyo 2020 Olympic Games. Summary “Abenomics” refers to the economic policy of Abe Shinzo, the Prime Minister of Japan. His aim was to revive the sluggish economy with "three arrows": a massive fiscal stimulus, more aggressive monetary easing from the Bank of Japan, and structural reforms to boost Japan's competitiveness. Although Almost a year has passed since the Prime Minister voiced the economic policy, Analysts remain divided over the success of Abenomics. [A]Rating Abenomics is the biggest issue for the Abe administration, and it has a big potential to change the Japanese economy. [A]Macro Viewpoint [A]Consistency with policy trends · Abenomics is one of the important policies itself. [B]Consistency with the technology trends [A]Consistency with economic trends · As Japanese economy has been stagnant for a long period of time, the economic reforms are highly required. [A]Consistency with the social trends · Abenomics may become the way to solve the social problems in Japan such as the problems with the aging society, weakened competitiveness in the world. [A]Micro Viewpoint [A]Market impact · The policy will affect various markets drastically. [A]Spirit of innovation · An important part of Abenomics' "Third Arrow" includes policies intended to spur growth through entrepreneurship and innovation. [B]Uniqueness [Figure] Details of “Abenomics” (Source) BUSINESS INSIDER “THE TRUTH ABOUT ABENOMICS — The Japanese Economic Experiment That's Captivating The World”
    • 23 N-2 Growth Strategy (the 3rd Arrow of Abenomics) Message The third arrow of the Abenomics, a growth strategy, includes structural reforms such as deregulation and public-private support for key sectors. Summary The third arrow of Abenomics, a growth strategy, aims at revitalizing industries, expanding global outreach, and bolstering innovation. Given that the nation’s potential for growth itself has extremely weakened, it is very required to implement as quickly as possible the third arrow of Abenomics to encourage private sector investments. [A]Rating The growth strategy includes structural reforms such as deregulation and public-private support for key sectors. It is not too much to say that the success of Abenomics is determined according to the results of the growth strategy. [A]Macro Viewpoint [A]Consistency with policy trends · The growth strategy is the important policy itself. [B]Consistency with the technology trends [A]Consistency with economic trends · Some industries need structural reform to strengthen Japan’s industrial competitiveness as mentioned in the growth strategy. [A]Consistency with the social trends Abenomics and the growth strategy may become the way to solve the social problems in Japan such as the problems with the aging society, weakened competitiveness in the world. [A]Micro Viewpoint [A]Market impact · The policy to boost private investment and to reform regulatory has big impact on various markets. [A]Spirit of innovation · The ggrowth strategy includes policies intended to spur growth through entrepreneurship and innovation. [B]Uniqueness [Figure] Growth Strategy in Abenomics (Source)nippon.com “Abenomics and the Government’s New Growth Strategy” the New Growth Strategy Private sector revitalization tax cuts to investment taxes, Increasing business startup/closure rate to around 10%, etc. Business environment establishment of national strategic special zones, lifting Japan’s ranking from 15th to 3rd place among industrialized countries on the Ease of Doing Business Index, etc. Commerce and Globalization raise of FTA ratio from current 19% to 70% (by 2018), number of foreign tourists visiting Japan: From 10 million in 2013 to 30 million by 2030, etc. Agriculture, forestry, and fisheries Value of “sixth-order” industries: Tenfold increase to ¥10 trillion (2020), Exports of agricultural, forestry, fisheries products, and foods: from ¥450 billion at present to ¥1 trillion (2020), etc. Employment, women's issues, training Percentage of women in work (ages 25–44): Increase from 68% at present to 73% (2020), World university rankings: At least ten universities in the Top 100 within the next ten years, etc. Energy Reform electricity supply systems: Create ¥16 trillion worth of new industry, new employment, Commercial development of the marine resources, etc. Healthcare and medicine health and preventative medicine market: From ¥4 trillion at present to ¥10 trillion in 2020, Scale of medical market: From ¥12 trillion at present to ¥16 trillion (2020) , etc.
    • 24 N-3 Sales tax Raise Message The sales tax rate was decided to be raised to 8 percent from the current 5 percent next April as planned. The tax hike put Abenomics to the test. Summary Prime Minister Shinzo Abe has decided to raise the sales tax rate to 8 percent from the current 5 percent next April as planned. He decided that in order to maintain confidence in the fiscal policy of Japan and establish a social security system that is sustainable for future generations. [B]Rating Sales tax raise is an important issue from the perspective of both restoring the fiscal health and affecting the consumption behavior. [A]Macro Viewpoint [A]Consistency with policy trends · Japan has to demonstrate a solid commitment to making continuous and proactive effort to restore fiscal health to the international community. [B]Consistency with the technology trends [C]Consistency with economic trends · The tax hike has a potential to thwart the effort of the growth strategy of Abenomics. [A]Consistency with the social trends · The sales tax raise is required to confirm financial resources for social security with Japan facing a rapidly- aging society. [A]Micro Viewpoint [A]Market impact · The decline in consumption due to a decrease in disposable income could have negative impact on the markets. [B]Spirit of innovation [B]Uniqueness [Figure] Change in private consumption by sales-tax hike (Source) THE WALL STREET JOURNAL “Japan’s Abe Seen Deferring Sales Tax Decision Until Around October”
    • 25 N-4 Tokyo Olympic Games Message Tokyo has been chosen by the International Olympic Committee to host the 2020 Summer Games. The Olympic Games will be an “explosive agent” for Japan’s economy. Summary Tokyo has been chosen by the International Olympic Committee to host the 2020 Summer Games. Prime Minister Sinzo Abe claimed that 2020 Olympic Games will be an “explosive agent” for Japan’s economy. Tokyo metropolitan government evaluates the positive effect of 2020 Olympic Games to the Japanese economy at ¥ 2.96 trillion for the period 2013-2020. It also estimates Olympic Games to create 150,000 new jobs until 2020. Moreover, it expects at 8.5 million the number of tourists who will visit Japan for 2020 Olympic Games. [A]Rating The Olympic Games will be an “explosive agent” for Japan’s economy and have good effects on wide range of areas. [A]Macro Viewpoint [A]Consistency with policy trends · Tokyo Olympic Games will be an “explosive agent” which assists Abenomics and the growth of Japan’s economy. [B]Consistency with the technology trends [A]Consistency with economic trends · Many people in Japan hope that the Tokyo Olympics will have positive effects on the economy as they do not feel that the economy is recovering from the prolonged slump. [A]Consistency with the social trends · The 2020 Olympics will be organized in a way it will contribute to disaster recovery. [A]Micro Viewpoint [A]Market impact · Hosting the Olympics will have good effects on a wide range of areas such as infrastructure and tourism. [A]Spirit of innovation · The technology for foreign tourism such as digital signage and navigation with smart phones would be developed. [B]Uniqueness [Figure] The plan for Tokyo Olympic Games 2020 (Source)Tokyo 2020 Bid Committee’s web page
    • 26 N-5 Participation in TPP Message Prime Minister Shinzo Abe aims to revive the Japan’s sluggish economy with “three arrows”: a massive fiscal stimulus, more aggressive monetary easing from the Bank of Japan, and structural reforms to boost Japan's competitiveness. Summary “Abenomics” refers to the economic policy of Abe Shinzo, the Prime Minister of Japan. His aim was to revive the sluggish economy with "three arrows": a massive fiscal stimulus, more aggressive monetary easing from the Bank of Japan, and structural reforms to boost Japan's competitiveness. Although Almost a year has passed since the Prime Minister voiced the economic policy, Analysts remain divided over the success of Abenomics. [B]Rating The impact of TPP on Japan’s economy will be significant and the sense of uncertainty about what it will be in the future is high. [A]Macro Viewpoint [A]Consistency with policy trends · The participation in TPP has an impact not only on Japan’s economics but also on Japan’s foreign policy such as the relationship with the U.S. [B]Consistency with the technology trends [A]Consistency with economic trends · The government forecasts Japan’s participation in the Trans-Pacific Partnership to increase its real GDP by 3.2 trillion yen, or 0.66% in its ratio to GDP (Cabinet Secretariat 2013). [A]Consistency with the social trends · Japanese companies seek to their growth in Asian emerging markets and the participation in TPP will help them. [B]Micro Viewpoint [A]Market impact · There is a possibility that some markets including the agriculture sector and the health care sector need to be reformed. [B]Spirit of innovation [B]Uniqueness [Figure] Economic partnership framework involving Japan (Source) bilaterals.org “TPP declaration fuels other talks / European nations grow more eager to reach trade deals with Japan”
    • 27 N-6 Cool Japan Message Japan’s government promotes export of “cool Japan”, Japanese creative products and culture, to all overt the world. Summary The term “cool Japan” refers to Japanese products and culture which are creative and has been accepted and is supported internationally. The involved industries range widely from food to manga comics and fashion. The ministry of economy, Trade and Industry promotes overseas advancement of a globally appreciated “Cool Japan” brand, fostering creative industry, promotion of these industries in Japan and abroad, and other related initiatives from cross-industry and cross- government standpoints. [A]Rating The cool Japan project has potential to improve national competitiveness. [A]Macro Viewpoint [A]Consistency with policy trends · The cool Japan policy was given status as that of one of the important growth strategies in the Abenomics. [A]Consistency with the technology trends · The development of Internet technology helps Japanese contents expand all over the world. [A]Consistency with economic trends · The importance of export promotion is increasing as the domestic demand is decreasing. [A]Consistency with the social trends · Japanese culture is highly valued abroad as well as in Japan. [A]Micro Viewpoint [A]Market impact · The cool Japan policy has a positive impact on the creative industries and other surrounding markets. [B]Spirit of innovation [A]Uniqueness · Japanese unique culture is highly evaluated in the world. [Figure] The Image of Cool Japan (Source) All Nippon Airways’ web page
    • 28 N-7 Social Security (Pension) Message Japan’s government has been promoted the comprehensive reform of social security and tax as a response to the extreme drop in the birthrate, ageing of society and the critical state of public finances. Summary It is said that Japan’s social security system is too generous, and current benefit levels cannot realistically be maintained. The system was created when Japan enjoyed relatively high growth and aging was not yet a serious problem. Now that the situation has changed, the government has been promoted the comprehensive reform of social security and tax as a response to the extreme drop in the birthrate, ageing of society and the critical state of public finances. [A]Rating The problem of the social security is getting serious. Urgent action should be taken to maintain the system of the social security. [A]Macro Viewpoint [A]Consistency with policy trends · The reform of social security is inevitable and must be included in the set of policies. [B]Consistency with the technology trends [A]Consistency with economic trends · Changes in the economic structure in these days make it inevitable for the system of social security to be reformed drastically. [A]Consistency with the social trends · Current social security system cannot realistically be maintained since the society is facing advancement of aging society with child birthrate falling. [A]Micro Viewpoint [A]Market impact · The reform of social security will have a big impact on the health care industry. [B]Spirit of innovation [A]Uniqueness · The ageing of Japan is thought to outweigh all other nations, as the country is purported to have the highest proportion of elderly citizens. [Figure] Increase of social security expenditure (Source) Ministry of Health, Labour and Welfare
    • 29 N-8 Aging Infrastructure Message The problem of aging infrastructure is serious problem and innovative technologies (e.g. M2M, radar) should be used to solve it. Summary A deadly Sasago tunnel collapse on a busy highway near Tokyo has led to doubts about the quality and safety of Japan’s much vaunted, enormously expensive infrastructure. Japan built a massive amount of infrastructure in the decades following World War II, and this means that the number of facilities built more than 50 years ago will increase at an accelerated pace over the next 20 years. In order to solve this serious problem, The government is compiling a "Basic Plan for Extending the Service Life of Infrastructure," in which the latest technologies to improve safety while holding down costs will be utilized. [A]Rating The problem of aging infrastructure is serious problem and innovative technologies should be used to solve it. [A]Macro Viewpoint [A]Consistency with policy trends · This topic is mentioned in the growth strategy of Abenomics. [A]Consistency with the technology trends · The development of IT technology makes it efficient to maintain and monitor infrastructure. [B]Consistency with economic trends [A]Consistency with the social trends · The problem of aging infrastructure is a serious social problem. [A]Micro Viewpoint [A]Market impact · The plan for extending the Service life of infrastructure will affect the construction industry. [A]Spirit of innovation · The innovative IT technologies such as M2M, sensor, and radar are related. [B]Uniqueness [Figure] The percentage of over 50-year-old equipment (Source) Ministry of Land, Infrastructure, Transport and Tourism 16 18 40 30 65 45 7 29 56 2012.March 2022 2032 Bridge Tunnel Harbors
    • 30 N-9 Online Privacy Problem Message Effective use of personal data and appropriate protection of privacy has become serious problems as the smartphones are rapidly spreading and the big data technology is developing. Summary Effective use of personal data and appropriate protection of privacy has become serious problems as the smartphones are rapidly spreading and the big data technology is developing. Japan’s government set up a committee which cut across ministries and agencies to consider how to utilize personal data. [B]Rating The privacy problem has impact specifically on IT sectors. [A]Macro Viewpoint [A]Consistency with policy trends · The Prime Minister declared to promote the utilization of IT and big data is one of the key technologies of IT sector. [A]Consistency with the technology trends · Privacy rights of consumers would be more threatened as IT technology has been developed. [B]Consistency with economic trends [A]Consistency with the social trends · The news related to privacy problem is increasing. [B]Micro Viewpoint [A]Market impact · In the IT market, keeping the appropriate balance between privacy protection and data utilization is a very important issue. [B]Spirit of innovation [B]Uniqueness [Figure] Frame work for personal data protection in Japan (Source) Office of Personal Information Protection, Cabinet Office
    • 31 N-10 Online Security Issues Message The serious risk surrounding cyberspace is increasing. Japan’s government established “Cybersecurity Strategy”, and MIC started “ACTIVE (Advanced Cyber Threats response InitiatiVE)” project with private enterprise such as NTT, KDDI. Summary As merger and integration of cyberspace and real-space proceed, the serious risk surrounding cyberspace is increasing. Information Security Policy Council established “Cybersecurity Strategy” as a new national strategy on cybersecurity in June 2013. The objectives include (1) Constriction of “Resilient” Cyberspace, (2) Construction of “Vigorous” Cyberspace, and (3) Construction of “World-leading” Cyberspace. [B]Rating The online security issue has impact specifically on IT sectors. [A]Macro Viewpoint [A]Consistency with policy trends · This is an important policy itself. [A]Consistency with the technology trends · As information technology advances, the security issue will be more important. [B]Consistency with economic trends [A]Consistency with the social trends · The security issue became a social challenge. For example, the number of the smartphone malware is increasing. [B]Micro Viewpoint [A]Market impact · Online security thread will affect wide range of markets such as IT sector. [B]Spirit of innovation [B]Uniqueness [Figure] Image of ACTIVE project 1. List the URL of sites which spread malware. 2. Alert users who tend to access dangerous sites. 3. Warn administrators of dangerous sites to take proper measures. (Source) Ministry of Internal Affairs and Communications