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The Web, Social Games And Mobile In Japan

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This is an (edited) presentation I gave on Japan's web (search engines, e-commerce, social media), mobile and social gaming industries a few weeks back.

Companies discussed include Yahoo Japan, Mixi, GREE, DeNA (Mobage), Rakuten, and others.

Credit for the graphic on slide 6: Penn Olson (http://www.penn-olson.com/2011/06/02/asia-cisco-internet-traffic)

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The Web, Social Games And Mobile In Japan

  1. 1. Japan’s
Web,
Mobile
&
Gaming
 Markets
 By
Serkan
Toto,
PhD
 Twi?er:
@serkantoto 

  2. 2. About
Me
• Tokyo‐based
web,
mobile
and
gaming 

 industry
consultant
• Advisor
for
startups
in
Japan
and
the
US

 
• Japan
correspondent
for
TechCrunch.com
 
• Personal
website:
www.serkantoto.com
 

  3. 3. Agenda
I:
Japan’s
Internet
II:
Japan’s
Mobile
Market
III:
Japan’s
Social
Gaming
Market

  4. 4. I:
Japan’s
Internet 

  5. 5. Asia
Boasts
World‘s
Biggest
Web
PopulaNon

  6. 6. Asia‘s
Web,
Including
Japan,
To
Explode
By
2015


Source:
Cisco,
June
2011

  7. 7. Japan’s
Internet 
•  Search
Engines
•  E‐Commerce
•  Social
Networks

  8. 8. Japan‘s
No.
1
Web
Site:
Yahoo
Japan

  9. 9. Japan‘s
No.
1
Search
Engine:
Yahoo
Japan


Source:
Nielsen
Online
Japan,
April
2010
(PC
access)

  10. 10. Key
Facts:
Search
In
Japan
•  Yahoo
partners
with
Google
for
backend
•  Yahoo
Japan
is
not
only
search:
aucNons,
 shopping,
mail,
games,
(social
networking?)
•  Mobile:
No.
1
is
Goo
(NTT
Docomo),
but
both
 KDDI
and
SoBank
use
Yahoo/Google
search

  11. 11. Japan’s
Internet 
•  Search
Engines
•  E‐Commerce
•  Social
Networks

  12. 12. Size
Of
Japan‘s
E‐Commerce
Market
 •  In
2008:
$76
billion
(B2C,
up
13.9%
from
 2007),
according
to
METI


Source
for
graph:
Nielsen,
2008

  13. 13. M‐Commerce
Is
Big


Source:
Japans
Ministry
of
Internal
Affairs
and
CommunicaGons

  14. 14. World‘s
2nd
Highest
Online
Spend
 •  $6,688
per
year
(roughly
2x
Korea)
 •  Popular
online
purchase
items:

 – airline
Nckets
and
other
travel‐related
items
 – clothes
 – books
 – music
downloads



Source:
VISA
ecommerce
Consumer
Monitor,
2009

  15. 15. PotenNal
For
Future
Growth


Source:
Nielsen,
2010

  16. 16. Japan‘s
No.
1
E‐Commerce
Site:
Rakuten

  17. 17. Rakuten
Is
SNll
Growing
•  37,000
merchants
•  71
million
members
in
Q1/11
(+10%
y‐o‐y)
•  76
million
items
listed
in
July
2011
(roughly
2x
 more
than
in
July
2009),
from
apples
to
trucks


  18. 18. Rakuten
Isn‘t
Amazon
Japan
•  Online
shopping
mall
„Rakuten
Ichiba“
•  Rakuten
Travel
•  Portal
and
media
Business
•  Credit
card
business
•  E‐Banking
•  SecuriNes
•  E‐Money
•  Sports

•  TelecommunicaNon

  19. 19. Amazon
Japan
is
Big,
But
Rakuten
Is
Bigger
•  EsNmate:
Amazon
Japan
racks
up
10%
of
 Amazon
proper‘s
sales
and
income
•  Large
investments
in
Japan
as
of
late
 (distribuNon
centers,
for
example)

  20. 20. Rakuten‘s
Next
Goal:
World
DominaNon
 •  USA
(Buy.com,
Linkshare)
 •  China
(Baidu)
 •  Asia:
South
Korea,
Taiwan,
Thailand,
 Indonesia,
Malaysia,
the
Philippines,
India
 •  Europe:
Luxembourg,
Germany,
UK
 •  South
America:
Brazil
 •  End
goal:
an
integrated
cross‐border
e‐ commerce
planorm


  21. 21. Japan’s
Internet 
•  Search
Engines
•  E‐Commerce
•  Social
Networks

  22. 22. Japan‘s
Unique
Social
Networking
Landscape

•  Basic
structure:
real
social
graph
vs.
virtual
 social
graph
vs.
mixed
social
graph
•  3
homegrown
social
networks
with
roughly
25
 million
users
each:
 – Mixi
(real/“Japan‘s
Facebook“)
 – GREE
(virtual/mobile
social
gaming)
 – Mobage
(virtual/mobile
social
gaming)

  23. 23. Facebook
Japan
Has
Long
Way
To
Go
 •  Facebook
members
in
Japan:
3.6
million
(roughly
 3.5%
of
web
populaNon)
(real
idenNNes)
 •  Facebook
penetraNon
in
the
US:
68%


Source:
Socialbakers

  24. 24. Twi?er
Is
Already
There
 •  EsNmate:
Roughly
18
million
Twi?er
users
in
 Japan
aer
3/11
earthquake
(mixed
idenNNes)
 •  Japan
is
Twi?er
country,
also
for
businesses


Source:
Internet
Watch/Agile
Media
Network
2011

  25. 25. II:
Japan’s
Mobile
Market 

  26. 26. Japan:
World‘s
Most
Advanced
Mobile
NaNon
• 7th
largest
mobile
user
base
in
the
world
(107
million)
 
• 100%
3G
penetraNon
(first
3G
networks
in
2001
by
NTT)
 


Source:
Wikipedia

  27. 27. Hotbed
For
Mobile
InnovaNon
• World‘s
first
mobile
web
system
in
1999
 
• Full
PC
web
browsing
on
cell
phones
 
• First
app
planorm
created
in
2001
 
• QR
codes
 
• Online
billing
and
payment
 
• Offline
payments
through
cell
phones
(e‐wallet)
 
• First
3G
networks
 
• Cell
phone
novels
 
• Mobile
digital
TV
 
• Mobile
health
terminal
 
• HD
video
recording
 
• e‐book
funcNon
 
• Mobile
social
gaming
 
• Commuter
pass
in
public
transportaNon
 
• Waterproof
or
solar‐powered
cell
phones
 
• IntegraNon
with
home
electronics
 

  28. 28. Vibrant
Mobile
Market
•  Hardware
sector
controlled
by
 – Sharp
(market
leader
with
25%
market
share)
 – Panasonic
 – Fujitsu‐Toshiba
 – NEC‐Casio
 – Kyocera
•  3
main
carriers
 – NTT
Docomo
(market
leader
with
55
million
users)
 – KDDI
au
 – SoBank
Mobile

  29. 29. Japan‘s
Mobile
Galapagos
Is
Doomed
 •  GREE
CEO
Yoshikazu
Tanaka:
„By
2015,
feature
 phones
in
Japan
will
vanish.“
 •  iPhone
and
Android
to
dominate
in
future


Source:
The
Nikkei
/
MM
Research
InsGtute

  30. 30. III:
Japan’s
Social
Gaming
Market 

  31. 31. Size
Of
Japan‘s
Social
Gaming
Market
•  Annual
sales
of
DeNA
and
GREE
combined
 reach
around
$2
billion
(ads
included)
•  Different
sources
offer
different
numbers:
 – Japan‘s
CommunicaNons
Ministry:

 $1
billion
in
2009
 – Market
research
firm
Seed
Planning:
 $1.46
billion
in
2010
(+49.3%
in
2011)

  32. 32. Size
Of
Japan‘s
Social
Gaming
Market
•  Yano
Research:
$406
million
in
2009,
$900
 million
in
2010,
$1.4
billion
in
2011:

  33. 33. Highly
Fragmented
And
Unique
Industry
Structure
•  Hundreds
of
social
applicaNon
providers
•  Two
dominant
companies
double
as
planorm
 and
game
providers:
GREE
and
DeNA
 („Facebook
and
Zynga
in
one“)
•  Social
gaming
in
Japan
is
mobile
(except
for
 Yahoo
Mobage
on
the
PC)
•  Rekoo
only
really
successful
foreign
player

  34. 34. DeNA:
InternaNonalizaNon
•  DeNA‘s
3‐market
approach
with
Mobage
for
 Smartphone:
 – Japan
 – China
 – Rest
of
the
world
•  Aggressive
M&A:
 – Ngmoco
$403
million
 – Aurora
Feint,
Gameview
Studios,
Astro
Ape,
etc.
•  Failed
twice
on
a
global
level:
 – MiniNaNon
 – Mobamingle

  35. 35. GREE:
InternaNonalizaNon
•  More
cauNous
approach
•  US
office
in
January
2011
•  Partnerships:
 – South
East
Asia:
mig33
 – China:
Tencent
•  Only
one
sizeable
acquisiNon
abroad
so
far
 (Openfeint
for
$104
million)
•  75
million
users?

  36. 36. Thank
you
for
listening! 

  37. 37. Contact
InformaNon
TwiRer:
h?p://twi?er.com/serkantoto
LinkedIn:
h?p://linkedin.com/in/serkantoto
Facebook:
h?p://www.facebook.com/stoto
Email:
totoserkan
AT
gmail.com

  38. 38. Picture
Credits 
•  Slide
:
h?p://www.penn‐olson.com/2011/06/02/asia‐cisco‐internet‐traffic
•  
h?p://www.google.com/url?sa=t&source=web&cd=4&ved=0CC4QFjAD&url=h?p%3A%2F %2Fhk.nielsen.com%2Fdocuments%2FQ12010OnlineShoppingTrendsReport.pdf&rct=j&q=nielsen %20online%20shoppers%20as%20a%20%25%20of%20internet %20populaNon&ei=ypL0Taq5IYzWvQPZxpXiBg&usg=AFQjCNHQvo6oSCKqVYZB7QIsDi7J98kCJw&sig2=c5RQ lKU4u7u8W94Qe1vUQw&cad=rja
•  h?p://www.visa‐asia.com/ap/sea/mediacenter/pressrelease/NR_SGP_291009.shtml#Note1
•  Japan’s
endangered
phone
species:
h?p://e.nikkei.com/e/ac/tnw/Nni20110606IS3GALAK.htm


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