I regularly get asked how big Japan’s market for social games (deployed on GREE, Mobage, Mixi etc.) actually is. The short answer is it depends on who you ask – and you should be careful which numbers to rely on.
Let’s just look at 3 sources:
1) Japanese government
The report doesn’t mention social games per se and ignores the (relatively small) domestic market for PC-based social games. It does say, however that the mobile games market (social and non-social) in Japan was worth 88.4 billion yen ($1 billion) in 2009.
The ministry also reports that the market for virtual items in mobile games and social networks grew 185% to $508 million in 2009 (year-on-year). By way of comparison: In 2007, virtual items accounted for just $68 million of the mobile content business.
2) Seed Planning
In December, I reported on numbers coming from market research firm Seed Planning in December. To recap, Seed Planning says sales in Japan’s social game market are worth $1.46 billion in 2010, with virtual items accounting for $1.2 billion (rest through ads). Seed Planning expects sales to grow 49.3% in 2011 year on year.
3) Yano Research
According to market research firm Yano, the social game market in Japan was worth $406 million in 2009. Yano expects it to more than double to $900 million in fiscal 2010 before reaching $1.4 billion in 2011:
As you can see, the numbers differ widely (there are other sources suggesting other numbers).
That’s one problem.
The other point I really don’t get is why these numbers are that low, seeing that DeNA alone makes $1.3 billion a year, largely with mobile social games. Without even mentioning what GREE and Mixi generate with social games, shouldn’t all the numbers listed up above be much, much higher?