$3.5-9 Million: Mobile Game Development Costs Keep Rising In Japan

It’s not a secret that a lot of the cost blocks across the value chain in mobile gaming have been getting bigger over the last years.

This is also true with regards to development.

After all, spec bumps in hardware are leading to increased adoption of 3D graphics, games are generally deeper and more complex, and users are more demanding than ever now.

Usually, development costs are being kept under wraps by studios, but in recent weeks, three scaled developers in Japan have disclosed some data that I am sharing below.

Note the numbers only refer to developing games and don’t cover live operations, marketing, and other activities.

DeNA (2432)
During the earnings results briefing for DeNA’s Q4 in May, CEO Moriyasu said he sees development costs for mobile games rising in general.

He disclosed that on average, his company calculates with around US$4.5 million in such costs per title.

GREE (3632)
GREE’s VP of Social Games Eiji Araki even went further up in April during his company’s Q3 results briefing.

According to Araki, who is also head of GREE’s top studio Wright Flyer Studios, he nowadays calculates with US$4.5 million to US$9 million in terms of development costs.

Araki also said that he expects this cost block to become bigger going forward, even for studios that use existing game engines or recycle content for other titles.

Ateam (3662)
For the CEO of Nagoya-based Ateam, Takao Hayashi, the situation is not that extreme.

During his company’s Q3 results briefing last month, he pegged the development costs for a mobile game in Japan at US$3.5 million currently.

He said that when taking into account overseas expansion and marketing costs in each country for Ateam’s games, the overall sum per title gets closer to US$9 million.

Hayashi added that these sums can actually be seen as a benefit for bigger studios like his, as they lift the barriers for market entry overall.

So at least for these three Japanese studios, the take-away here is that the costs for developing a mobile game locally nowadays are in the US$3.5-9 million band.

Switch Effect: Japan’s Console Market Went Up 14.8% In First 6 Months Of 2017

Japan’s biggest video game magazine Famitsu just released an update on the size and growth of Japan’s console market. According to Famitsu, the domestic market for video game hardware and software combined in the first half of 2017 reached US$1.35 billion (using today’s currency rates). Here are the details for the time frame (December 26, 2016…

The Pokemon Company’s Net Profit Jumps 26x To US$143 Million Last Year

As a private company, there is no need for The Pokemon Company to disclose financials every quarter – or to ever discuss any of their numbers publicly. In Japan, however, a lot of private companies that are structured in a certain way communicate some financials (not all) in the “Kanpo”, the official government gazette, at regular…

Report: Japan’s Smartphone Game Market Stagnates At High Level

Tokyo-based market research firm Yano has published a new report on Japan’s smartphone game industry. According to the company, the size of the industry is stagnating from 2014 to 2017 within the US$8-8.5 billion band: The numbers include sales generated inside smartphone native apps as well as browser games. Ad revenue isn’t reflected. (As mentioned previously…

Japan Has A “Secondary Market” – For Servicing Mobile Games

There can be no doubt Japanese companies lead the world when it comes to understanding that free-to-play mobile games are actually services that never end. As such, live operations are viewed as a key activity in the mobile game industry’s value chain and taken very seriously over here. For the uninitiated, servicing a given mobile game includes…

Report: Size Of Japan’s Console Gaming Market Drops To $2.6 Billion In 2016

Today, Japan’s biggest video game magazine Famitsu published (JP) new stats showing that the country’s market for console gaming continues to shrink. According to Famitsu, the combined sales in Japan for video game hard- and software amounted to US$2.59 billion between December 28, 2015 and December 25, 2016. This compares to US$2.77 billion a year prior (or a minus…

Sony’s Mobile Gaming Plans: Solid, But (Probably) Not Enough

At a press conference in Tokyo today, Sony (6758) detailed its next attempt to move into the mobile gaming business. The big idea this time is to turn existing PlayStation IP into smartphone games, via a wholly owned subsidiary called Forwardworks. In my view, the 10 titles shown today can be grouped in 3 categories. Category 1…

Facebook’s Instant Games Platform Is Surprisingly Japan-Heavy

Facebook has launched Instant Games yesterday, a new HTML5 cross-platform that could lead to a new era in gaming. In a nutshell, Facebook allows developers to deploy games that run completely within the Facebook and Messenger clients (both on mobile and desktop). One tap of the user is enough, and the games start within the client…