By Daiki Moriyama, Director, Oasys
For decades, Japan was the driving force of the global gaming industry. From its heyday in the 1980s when Nintendo and Sega were defining a whole new category of electronic games, to the 1990s where Japanese cultural phenomena such as Pokémon exploded beyond screens to take over the world through merchandise and pop-culture. After a lull in recent years with the rise of PC and mobile gaming franchises, Japan is back to lead the pack, thanks to the rapid evolution of its blockchain gaming ecosystem.
The recent momentum comes as a result of a variety of interconnected factors. A forward-thinking government open to Web3 developments, a unique cultural ethos that is stimulating innovation, and finally a creative developer and business community with an appetite for collaboration. The enthusiasm and interest is now extending beyond Japan, as its international appeal is once again taking hold and investors, companies and gamers look East.
Well Played Web3
Japan’s Web3 industry is blossoming under the care of policy makers who have pivoted towards the cutting-edge potential of digital assets and Web3. Last month, a consortium of public and private groups hosted the IVS Crypto 2023 conference in Kyoto, attracting some 10,000 Web3 investors, developers and enthusiasts from all over the world. Speaking at the event, Prime Minister Fumio Kishida identified blockchain as central to the new economy, while Masaaki Taira, chairman of the Party's web3 project team, underscored the importance of gaming for the progression of the Web3 industry.
Not only is gaming benefiting from this landscape, it’s also accelerating development of the wider industry. A recent report from AT Kearney Japan highlights how Japan’s Web3 market is outpacing the global average, propelled largely by a powerful blend of gaming content and IP-related businesses.
It is precisely this unique IP that is giving Japan its competitive edge. The country’s distinctive cultural identity, central to some of its best-known exports, is now being used to innovate and build new trends. For example, games such as Tamagotchi and Pokémon that centre around character-nurturing align perfectly with the principles of blockchain gaming. New projects, such as the OASYX Series 2 in collaboration with the Bandai Namco Research Institute, harnesses NFTs to create lifeforms that can be nurtured and cared for from egg to adult, bringing 90s nostalgia onto blockchain.
It’s not just kawaii culture driving change. "Poikatsu", or the popular trend of collecting points from daily activities, parallels nicely with the "Play to Earn" concept in blockchain games, fostering a shared cultural-economic narrative. The app Stepn is just one platform which has developed a large user base in Japan, leading to partnerships with notable Japanese corporations like ASICS.
Multiple Player Mode
Traditional Japanese game developers have been quick to seize the opportunity of blockchain. Industry titans such as SEGA, Square Enix, and Bandai Namco, leveraging globally celebrated IPs, are reinvigorating gameplay. SEGA has already announced it is exploring investing in Web3 projects, licensing the company’s IP to trusted blockchain-based developers, while Square Enix has identified blockchain gaming as a strategic initiative. International developers are following suit. Last month, French publisher Ubisoft announced that it is launching its first-ever web3 partnership, creating a new Web3 game titled "Champions Tactics: Grimoire Chronicles" to much excitement from gaming audiences.
These Web 3 endeavors all have one thing in common: partnership. In fact, many game publishers are testing the potential of blockchain technologies by working closely with gaming blockchains, such as Oasys. Instead of starting from scratch, they are choosing to tap into the existing, compliant infrastructures to leapfrog the blockchain learning curve, ranging from setting up the ecosystem to compliance implications.
The involvement of these companies goes deeper than just the games. On Oasys blockchain alone, over 20 gaming companies are participating as node validators, actively participating in the governance of the gaming blockchain and contributing to the growth of the community. This deep dive into the infrastructure primes them for business expansion in the Web3 arena, including the potential issuance of their own tokens.
Beyond gaming, other industries are seizing on the potential of the space. Media and entertainment companies like GREE, DMM, and MIXI, sensing the momentum behind blockchain gaming, are starting to contribute to the ecosystem as validators and investors. Telecommunication titans such as Docomo and KDDI are aggressively pushing forward their various Web3 initiatives, extolling their belief in the transformative power of this technology.
Power up
As Japan becomes a hive of blockchain gaming activity, it’s no wonder overseas developers are looking to enter the market. While other countries grapple with regulations, limiting domestic innovation, Japan is now attracting game companies from abroad, especially South Korea and China. The Japanese market is one of the top three gaming markets by revenue and therefore an important market for many developers. In-market insight is critical for business development. Projecting forward, many of these brands are focused on market entrance to ensure they can get up to speed with Japanese audiences and stay ahead of the curve of global gaming developments. At the same time, they can expand their business footprint within the clear rules and regulations in Japan.
Japanese gaming enthusiasm is also creating a ripple effect, particularly in other gaming powerhouses such as South Korea. Just as the country was swift to embrace eSports and cultivate a thriving industry around it, Korean gaming developers and tech firms are showing a strong interest in the applications of blockchain in gaming and are following developments in Japan carefully. However, it’s not solely competitive. Cooperation between Japanese and Korean companies is central, with partnerships such as Oasys and Com2uS, a Korean mobile and online game publishing company, highlighting the joint efforts from both sides. By sharing knowledge and innovations, these two Asian gaming giants are powering forward, crafting a dynamic digital landscape that is ripe for further growth.
After a slow start, blockchain gaming is finally hitting its stride. Japanese gaming communities are flourishing, and Japanese gaming IPs and developer teams are globally in high demand. With its unique blend of culture, technology, and regulation, Japan is poised to lead the charge in the new era of blockchain gaming.
About the Author
Daiki Moriyama currently serves as Director at Oasys. His professional journey includes pivotal roles at renowned organisations such as the Boston Consulting Group and Deloitte. Moriyama's expertise lies in navigating the complexities of emerging technologies and effectively managing a wide array of operations in the global blockchain landscape. A staunch advocate for the blockchain realm, he actively champions its adoption by simplifying blockchain gaming and making it more accessible to all.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.