Introduction
When it comes to monetization in mobile gaming, there is one key metric that stands above the rest: Average Revenue Per User (ARPU).
While this number may fluctuate among various regions, one country consistently outperforms all others - Japan.
Japanese gamers tend to spend more on in-app purchases and mobile games, resulting in significantly higher ARPU and ARPPU numbers.
This piece delves into the factors behind Japan's extraordinary figures and examines the distinctive elements that contributed to its triumph.
Japan Gaming Industry from Numbers
Global Data reported that Japan ranked third in the ARPU trend in 2021.
The ARPU for the Japanese mobile games segment is expected to reach $418.99 by 2022, significantly higher than the worldwide ARPU.
Despite the continuous rise in revenue per user across all segments, mobile games achieve the highest ARPU, demonstrating the emerging growth of Japan's mobile gaming industry.
In 2017, 4Gamer published an article that provided a comprehensive look into the gaming industry at the time and detailed the recent growth of ARPPU in Japan's mobile gaming market.
At the end of summer 2017, the ARPU for smartphone games reached JPY 5,035 (with a maximum of JPY 50,000).
Over 40% of players don't spend money on mobile games, while the rest, whose revenue is ARPPU, spend about JPY 10,204 monthly.
In Japan, most paid users spend a lot of money on just one or two of their favorite games, as 80% of respondents reported spending this amount within two games.
Culture of mobile gaming:
According to a Statista survey in 2022, people from all age groups start playing mobile games daily among people who play games at least once monthly.
In addition to the entertainment aspect, players value the social aspects of gaming, such as competing with friends and joining virtual communities.
To gain a competitive advantage or unlock exclusive content, gamers are willing to invest in in-app purchases due to this strong gaming culture.
Most Japanese mobile games are free-to-play but are monetized by the Gacha mechanism, which is in-app purchases for raffle prizes. Gacha games make up nearly all of Japan's popular mobile games.
Innovation and Quality
Consumers in Japan are incredibly passionate about quality, craftsmanship, and unique experiences.
Their attention to detail, captivating visuals, and immersive gameplay attract a loyal fan base willing to invest in them.
In-app purchases and mobile games are more popular due to this cultural inclination.
Developers are rising to the challenge of creating games that resonate deeply with users and drive higher ARPPU in the Japanese market.
Collecting culture
One aspect of Japanese culture involves the enjoyment of collecting and completing sets. This is evident in famous examples like Pokémon cards, Gundam models, and anime merchandise.
This cultural practice extends to mobile gaming, where players are motivated to collect virtual items, characters, and rare goods within the game. The desire to achieve complete collections or acquire exclusive items motivates Japanese gamers to make in-app purchases and microtransactions to enhance their gaming experience.
Purchases of in-app items or game-related content can also be viewed as a way to support developers or show appreciation for their work.
Gacha Sophistication
"Gacha" comes from the Japanese word "gachapon" - an onomatopoeic word linking a toy-vending machine's hand-cranking action with the capsule's landing in the collection tray.
Often described as "gacha pulls" or "loot boxes," "gacha games" involve players spending in-game currency or real money on getting randomized virtual items, characters, equipment, or units through a virtual lottery or "vending machine." These items can enhance gameplay and advance the game by buying chances to get better or rarer items or to collect items.
Japanese game developers have developed the types of Gacha and added sophistication over the years. There are Step-up gacha, Package gacha, Scratch gacha, and Sugoroku gacha, to name a few. A large volume of A/B testing resulted in accumulated knowledge of best practices to perfect the gacha mechanics, often not translated into English or other languages.
A growing number of gacha games are based on anime or manga-style graphics and storytelling, which have gained popularity in the Japanese mobile gaming market. Players can battle other players, progress through the story, or collect and display their favorite characters using virtual items related to the collection culture described in the previous section.
In Conclusion
In conclusion, Japan's remarkable ARPPU in the mobile app and gaming industry can be attributed to its users' willingness to spend more on in-app purchases and games.
As a result of their cultural heritage and history of collecting toys and cards, their spending habits and gacha sophistication may be shaped by their unique spending habits.
Developers and gaming companies can tap into the lucrative Japanese market by understanding and leveraging these factors.
Our game design team has deep knowledge of the spending habits of Japanese users and understands the best practices on game mechanics, economy balance, and price optimization to increase your ARPUs while keeping the game economy balance healthy.
Feel free to contact us to increase your game's revenues in Japan.