Hello everyone, I’m Aya, overseas business representative of Tokyo-based Adinnovatino Inc. I’m here today to talk about 10 facts about Japanese mobile app market, in order to let you know how to promote your app in Japanese market, from marketing perspective. I’m sure it’s everyone’s favorite discussion topic, but I promise over the next 20 minutes you will learn a lot and might even have fun.
Adinnovation Inc. is the leading marketing firm for smartphone apps, which carry out ad-agency business, app publishing support and analytics solution tool. The company was established 4 years ago and have worked with over 1,000 apps so far. Our office is located in the center of Tokyo, so mainly we are doing business for Japanese customers and Chinese gaming app developers. Currently expanding our business to overseas market as well.
I’ve joined Adinnovation last year, as an overseas business representative of Overseas Business Development. So I will support anything relevant to marketing, ad-sales, app publishing in Japanese market, if you are going to Japan.
I used to be an web application engineer and QA for eBook products in Rakuten, which is the Japanese e-commerce giant, since the acquisition of Kobo, Toronto-based ePublishing company.
Now, let me explain about the overview of Japanese smartphone market.
According to the tracking firm AppAnnie, Japan has surpassed US market in terms of the revenue of gaming apps from Oct 2013. As you see, spending on apps in Japan has grown rapidly with the country spending 40% less than the US only a year ago.
Also when DISTIMO compared ARPD, Average Revenue Per Download, with average Cost Per Install, it concluded that Japan is the most revenue potential market, because of the highest profit of 4.48 USD per download. Means, currently Japan is the most lucrative and fast-growing app market in the world.
Apparently this is because of the huge hits of gaming apps. Puzzle and Dragons, the leading puzzle game, has exceeded 26 million downloads, as of March. It is also said that their monthly estimated operation profit is about 100 million USD.
Just for your curiosity, I’ve listed the top ranked gaming apps’ icons here. They are mostly categorized as ‘Free-to-play’ apps. Also Japanese user tend to pay more for in app purchases rather than paid installs.
As you see, all of them use animated characters. Puzzle & Dragons, some puzzle games from LINE, Quiz RPG, kicking game with a princess, baseball simulation game, and music RPG with cute high school girls are popular now.
What about the market size itself? For smartphone games in Japan, it’s almost doubled last year, reaching 5.4 Billion USD in total sales. Means, it increased 178% over the 3 Billion USD earned in the previous year. Apparently, smartphone games now account for 50% of the entire games market in Japan. See, the market size including all software & hardware was worth 10.8 Billion. In this context, Consumer Games was only 20% of the total.
For the gaming app engineers and product managers, I brought a topic about Japan’s gaming development. From 2012, the total number of native application is gradually increasing. Browser games also keeps its position relatively constant in the market, but as you see on the slide, native app is getting more popular now, with 3.12 Billion USD market share.
However, that might be a great news for those who are interested in Japan, but the market is not fully matured yet. Only 54% of the mobile users, which is about 69 million people, had already shifted to Smartphones, but others are still using feature phones. Means, Japanese Smartphone industry still have potential for high growth.
Let me introduce market share of smartphone OS and mobile network carriers. In Japan, there are 3 top carriers such as NTT docomo, au, and Softbank. The graph shows the share of iPhone vs. non iPhone, which is the Android based phone. You can see 40% of mobile subscribers have iPhone. Since iPhone is the most popular device in all carriers and Android phone is also well-used rather than iPad/Android tablets, we tend to play game on our smartphones.
Basically, Japanese mobile users are trained to pay for digital content, based on the monthly subscription model for feature phones. For example, in 1999, all 3 carriers had released mobile internet service and it was the beginning of the digital consumption on feature phone in Japan. Then in 2011, Japanese users paid 6.4 Billion USD for the contents such as wall paper, decorated email, ringtones, browser games and comics. Then, the business model of carriers are changed dramatically in Japan by the increase of smartphone users. Now all carriers provides apps for smartphone with monthly subscription model in their individual market, with all-you-can-download-system. This is based on their history of selling digital contents from the feature phone era. So users can download apps via AppStore, Google Play in addition to the carriers’ market.
Strategy is quite important to get engaged with Japanese users. Just releasing your app in Japanese market is not going to solve the promotional problems, however, just running ad campaign also cannot be the solution. So, Analytics for ad effectiveness plays an increasingly significant role in your sales. Only after the whole life-cycle with Promotion, Monetize and Analytics, you will find out the complete monetization process of your app. It also allows you to figure out a next move quickly, because you can see users’ behavior and reaction. Currently, top 3 companies such as Cyber Agent, Adways and us, Adinnovation, provide tracking & analytics tool in order to support your business. It’s considered quite necessary to use the tools specialized to analyze the effectiveness of campaigns.
If you think that is too much, what about to start with to be in Top 100? Ofcourse initial investment will be hold down, and it is said that estimated monthly revenue would be about 10 Thousand USD. This is the monthly ranking of AppStore that I captured last week. See, some of the titles are published by non Japanese developers.
Gaps on the surface
As I bring my session to a close, I once again thank you for allowing us to be here today and hope that this has given you a much clearer understanding of how to penetrating into Japanese market with your app. I would be very happy to help you, so don’t hesitate to contact me anytime you want. Also, I would welcome the opportunity to return with other tips and tricks to present in the near future.
10 Facts About Japanese Market
ABOUT JAPANESE MOBILE APP MARKET
- THE MOST LUCRATIVE GAMING APP MARKET IN THE WORLD
OVERSEAS BUSINESS REPRESENTATIVE
AT ADINNOVATION. INC.
Mar, 2010 Established
Jul, 2013 Raised $1.6 million USD
Jan, 2014 Partnered with Digital Advertising Consortium
We have supported over 4 digital numbers of applications as of Apr 2014.
Leading Marketing Firm For Smartphone Apps
Aya Jennifer Yamada (Аюша)
Overseas Business Representative
at Adinnovation. Inc
Apr, 2011 Rakuten, Inc.
Web application engineer
QA & localization lead for Kobo, Toronto-based eBook
Nov, 2013 Adinnovation, Inc.
Representative of overseas business development
Staying in Moscow!
100 Facts About Japanese Market
- the most lucrative gaming app market in the world
10 Facts About Japanese Market
- the most lucrative gaming app market in the world
OCT, 2012 OCT, 2013
COMBINED IOS APP STORE & GOOGLE
PLAY MONTHLY APP REVENUE
#1 TOP Market In The World
Puzzles and Dragons
26 Million Downloads (Total)
100 Million USD /month (Estimated OP)
Free-to-play >> Paid Apps
In App Purchase >> Paid
#2 Because Of Gaming
All Games (incl. S & H) Smartphone Games
+ 178% YoY
2.5 Billion USD
#3 Bigger Than Consumer Game
40% Of Them Uses iPhone
#6 Wide Range Of Target Users
Based On The History Of Monthly
Subscription As Feature Phone
2008 2009 2010 2011
4.7 5.4 6.2 6.4
(Market Size Of Digital Contents, Billion USD)
#7 PR Campaign, Before & After Launch
【 AD media 】
CPI AD, ADNW
Succeeded AD in Phase 1 &
CPI Reward AD
Reviews media, and
【 Measures schedule 】
Launch ～1st Month
When rankings rise effect settled
For Potential users For Royal Users
Phase 1 Phase ２ Phase ３
For Expected users
Wall Jack In
Yamanote Line TV Commercial
#8 Even At The Station, TV Commercial,
Eye-catchy Digital Ads Strategy Guides