The gaming industry in Japan started in the ’60s and today, Japan comes in third place in terms of digital game revenues. In 2014 Japan had a share of 29.2% on global app shares and had generated approximately 5.6 million dollars in just a year. In just a year, Japan was contributing almost 30% to the global revenue.
However, this number fell to 23% during 2019 as the US and China’s markets grew rapidly and overtook the Japanese market. Even though the percentage of Japan’s revenue fell, the country still lead in the mobile game market. Japan’s market stood as #1 from 2014 to 2018, but in 2019 and 2020 it dropped to #2 with the US taking the lead.
The player spending percentage has risen by 4% hence the sector saw a revenue increase from $583 million to $14.5 billion last year.
Even though International revenue of Japan fell when countries like China launched applications like PUBG MOBILE and Genshin Impact, the revenue generated within the country still remains on top.
In the second quarter of 2020, venture capital (VC) investments in domestic companies at early-stage in Japan were highest in the computers and peripherals, and IT service industry, amounting to approximately ¥5.44 billion (US$ 52 million). The total value of domestic VC investment reached ¥10.2 billion (US$ 97 million).
The best Japanese games have earned 814.5 million which is 1.7% of the global revenue to date.
According to Statista, the gaming market reached ¥1.4 trillion (US$ 13.5 billion USD) in 2017 and was forecast to reach ¥1.55 trillion (US$14.9 billion USD) in 2024.
Here is a list of top 10 emerging gaming startups in Japan:
1. Playco
It is an instant-play gaming company that develops games that a large number of people can play together, without any downloads. Even though it was launched earlier this year, it has already become a unicorn.
Founding Year: 2020
Founders: Justin Waldron, Michael Carter, Takeshi Otsuka and Teddy Cross
Headquarters: Tokyo, Japan
Fund raised in 2020: US$ 100M in Seed round
Investors: Sozo Ventures, Sequoia Capital, Mistletoe, Makers Fund, Kortschak Investments L.P., Ksk Angel Fund, Josh Buckley, Dreamers VC, Digital Garage and Caffeinated Capital
2. Marvelous Japan
Marvelous Japan is involved in the production and sale of online games, console software, amusement arcade cabinets, music & video and promotion of stage production.
Founding Year: 1997
Founders: Matsumoto Yoshiaki, Motoda Shuuichi and Okada Shigeru
Headquarters: Tokyo, Japan
Fund raised in 2020: $65M as Post-IPO Equity
Investors: Tencent Holding
3. Thirdverse
Thirdverse was formerly known as Yomuneco Inc and virtual reality game Swords of Gargantua is its brainchild. It develops futuristic VR games and plans to release Oculus Quest 2 in Japan in October.
Founding Year: 2016
Founders: Masaru Ohnogi
Headquarters: Tokyo, Japan
Fund raised in 2020: US$ 8.5M in Series A
Investors: Sisu Game Ventures, Presence Capital, KDDI and Incubate Fund
4. Cover Corporation
Cover Corporation is a VTuber production company with a vision to enthusiastically attract fans all over the world by providing cutting-edge 2D entertainment experience with utilizing technologies such as VR, AR and 5G.
Founding Year: 2016
Founders: Motoaki Yagoo Tanigo
Headquarters: Tokyo, Japan
Fund raised in 2020: US$ 6.6M in Venture series
Investors: i-nest capital, STRIVE, SMBC VC, Mizuko Bank, Hakuhodo DY Ventures and Chiba Dojo
5. PlayBrain
PlayBrain is an Esports producer and Game marketing company from Japan. PlayBrain is the operating partner for the LJL, Japan’s League of Legends professional league and works with FUTAROKU and TAIYORO.
Founding Year: 2016
Founders: Mike Sheetal
Headquarters: Tokyo, Japan
Fund raised in 2020: US$ 6M in Series A
Investors: BITKRAFT Ventures
6. Whomor
Whomor produces high quality game illustrations for social games, manga production, and entertainment co-creation for their clients.
Founding Year: 2011
Founders: Mikiya Shibatsuji
Headquarters: Tokyo, Japan
Fund raised in 2020: ¥130M (US$ 1.2 million)
Investors: iSGS Investment Works, Kodansha, Jupiter Telecommunications (J:COM), Japan Finance Corporation, Innovations and Future Creation, Digital Garage, DK Gate and DG Ventures
7. Pretia
Pretia is a startup for developing an experiential game set in real-life CEKAI by applying VR and AR technology. Specifically, the player himself will exercise, walk around the city and solve riddles as the main character and advance in the storyline.
Founding Year: 2014
Founders: Ushio Yu and Yoshimi Li
Headquarters: Tokyo, Japan
Fund raised: ¥280M (US$ 2.6M) in 2019
Investors: TBS Innovation Partners, Sega Sammy Group and OLM Ventures
8. Hamster Corporation
Hamster Corporation is a Japanese Video game publisher, with fans all over the world. It was spun off by the game division of Toshiba-EMI Limited.
Founding Year: 2011
Founders: Sueharu Torii
Headquarters: Tokyo, Japan
Fund raised in 2020: Amount disclosed, Seed round
Investors: Sunbridge Partners
9. Vark
Vark comes under ActEvolve, which develops Blitz Freak, a multi virtual reality game. It makes games for devices like Oculus Quest, Playstation VR etc, for both Andriod and ios.
Founding Year: 2017
Founders: Takuya Kato
Headquarters: Tokyo, Japan
Fund raised in 2020: ¥200M (US$ 1.9M)
Investors: ANRI
10. VISUALIZE Japan
VISUALIZE Japan is a Game development company which takes on the challenge of developing not only games but also robots and IoT fields for the new Era.
Founding Year: 2003
Founders: Hiroaki Adachi
Headquarters: Tokyo, Japan
Fund raised in 2020: Amount undisclosed, Corporate Round
Investors: Poletowin Pitcrew Holding
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