At roughly US$10B, Japan is the No. 3 market for mobile games worldwide – and as such, it is and has always been a magnet for foreign studios trying to make it big here.
One of the most critical steps for foreign mobile game studios entering Japan is how to tackle user acquisition (UA) in Japan – and over the last 15 years in this business, I have seen the most incredible things when it comes to UA (many of them very, very bad for the studios).
(We can talk about concrete examples next time you see me at an event out there in the world.)
There are a lot of topics I could cover about the uniqueness of doing UA in Japan, i.e.:
- The prevalence of flat 20% commission fees as a general rule
- The “interesting” role of dominant players such as Dentsu and CyberAgent in UA in Japan
- The level of gossiping about foreign clients among the different UA providers that are theoretically supposed to compete with each other (i.e., if you try to play hardball with provider A, they might tell provider B and C and D the next second)
- The significance of TV advertising in UA in Japan (yes, it still works and is still being used aggressively)
- The “Junior UA expert” with no experience they might put on your account as a foreign studio without a clue about Japan
The Dominant Role Of Agencies In UA In Japan
One major unique point in this context is the critical role agencies play in the Japanese market.
Among Japan’s mobile gaming companies, UA is typically outsourced to advertising agencies – often in full and with adjacent activities such as traditional marketing, PR etc. on top.
This includes almost everybody, including the several publicly traded, large-cap mobile game studios in Japan: Needless to say, these companies do have staff with UA or marketing expertise in-house, but the heavy lifting is typically handed over to outside agencies.
These agencies handle the entire UA spectrum for their clients, i.e. ad buying, consulting, data and analytics, influencer relations, creatives, managing dashboards, partnerships (i.e. with brands for collaborations), etc.
It is a stark contrast to the West, where mobile game companies usually not only have most or all of their UA activities internalized but view their UA teams as valuable assets that they need to stand out in and compete in a cutthroat market. (I realize Western studios, too, hire UA consultants or agencies – but again, nowhere near the same level as in Japan).
The usual suspects in the Japanese UA space include the aforementioned CyberAgent and its subsidiaries, Septeni, Adways or Carta Marketing Firm (formerly known as Zucks). In several forms, the “traditional big 3″ Japanese agencies Dentsu, Hakuhodo, ADK (now part of Korean PUBG studio Krafton) do play a role, too.
For foreign game companies planning to enter the Japanese market, it is critical to understand not only the UA landscape itself but also the role of agencies within – and, most importantly, which one to choose.
As an ending note, I can say from experience that most of the times, foreign studios can start by exploring the Japanese market “remotely” first – meaning without a local agency, as the range of UA channels to reach Japanese users has become more global in recent years. An “upgrade” to cooperate with a local agency is always still possible later, i.e. if the time has come to go “full-on Japanese” on local ad networks, local social media or TV.
