For many video game developers and publishers, Asia is an automatic “must” when considering global markets. At the forefront of global expansion considerations is typically Japan and China, acclaimed video game consumption giants, with a long standing ranking as 2 of the top 3 video game markets in the world. While Korea is often perceived as a market only for online game companies due to the large number of online players, experts see mobile platforms as a strategic opportunity because of recent and expected year-on-year growth for the market. In addition, according to Newzoo, 59% of the population in Asia is between the ages of 21-35, making the region a goldmine for the video game industry. With Asia’s video game industry comprising the largest market in the world, producing more than $10 billion, this region should be high on every game developer’s list of regions to target in the localization of their games.
It’s no secret that the Japanese game market has been struggling the past couple of years, seeing some market growth in 2012. However, game developers and publishers continue to view Japan as a key market for the localization of their games. Japan has long been considered the video game hotspot and for a very good reason, as Japan sales have dominated the video game industry, 2nd only to the US until 2012. Japan is just now seeing their #2 position slip behind China’s, although Japan is expected to maintain its #3 position through 2016 at least, according to PricewaterhouseCoopers.
Not only is Japan already a well-established player within the video game industry, but the demographics of the region show a sustained game market throughout the coming decades: Japan ranks high in terms of population (#10 in the world according to the CIA’s July 2012 estimate), and the large population feeds itself into the rapid expansion of mobile devices and, subsequently, mobile gaming. In fact, DeNA reports that the social game industry in Japan “has emerged from almost nothing a few years ago, [expected to] generated a revenue of ¥342 billion ($4.36 billion) this year, nearly a tenfold increase from three years earlier.”
According to PricewaterhouseCoopers, China is a key market to consider, as the Chinese video game market was expected to surpass Japan in 2012 to become the 2nd largest game market in the world, approaching the US game market by 2016. China also saw a boost in sales revenue from 2011 to 2012 of 18.5% and is expected to grow 39% from 2012 to 2014 to $9.2 billion. In addition, PricewaterhouseCoopers reports, “China has by far the world’s largest online video game market, accounting for 35 percent of global spending on online video games.” Euromonitor informs us that China has one of “the youngest populations in terms of size with the number of people aged below 30 at […] 497 million.” In addition to China having the highest number of internet users (15 and above), at 291.5 million, China saw a growth rate of 23% from 2011 to 2012.
Due to China’s impressive climb from roughly $2,500 million in 2007 to quadruple that in 2013, LAI earmarked China as a key region for the establishment of our own operations. Our presence in the region and strategic collaboration with native translators and game companies allows us to deliver unparalleled game translation services and regional expertise.
According to a DFC Intelligence report, Korea’s game market is forecast “to grow to $5 billion by 2016” at a CAGR of 9.7% from $2.7 billion in 2011, closely following Japan’s game market growth in the years to come. According to a 2012 report by Korea Creative Content Agency (KOCCA), the Korean game market grew 18.5% in 2011, a statistic which KOCCA cites as proof of the video game industry as “the core driving force for the cultural content industry of Korea.” The overall game market in Korea has steadily increased each year since 2007, achieving 9% growth in 2008, 17.4% in 2009, 12.9% in 2010, 18.5% in 2011, and is expected to see a 19.6% overall market increase in 2012. Online games have exploded in the region, achieving almost 90% market penetration. Due to the incredible popularity of online games in Korea, the country has a Youth Protection Law, prohibiting children below 16 years old to play games between midnight and 6am.
However, online games aren’t the only option for reaching Korean gamers. KOCCA expects mobile to be a contender as a heavily used platform in the years to come, as mobile games grew 33.8%. When excluding the distribution sector, online games comprise 70.8% of the market, with PC rooms maintaining its position as the 2nd largest market segment in the Korean game market, at 19.5% market share in 2011. (Subscribe to LAI's monthly e-newsletter to stay informed of our upcoming pages on top platforms by country.)
What Makes or Breaks Business in Asia?
Due to the importance of personal relationships in the business cultures of these countries, when assessing game translation and localization vendors for the region, you should look to an organization that can bring you a deeper connection with key local players. For example, in Japan (according to World Business Culture), it is essential to bear in mind cultural emphasis on old traditions, loyalties, and personal relationships. However, World Business Culture’s Tip #1 for doing business in Japan is to focus on relationships, since “relationships drive business in Japan. Without the right depth of relationships with the right people, it can be very difficult to achieve anything.” Due to the time it takes to garner the relationships necessary to most effectively conduct business at a local level, you should leverage the long-standing relationships of vendors central to your company’s success in the Asian market, such as your localization vendor. With 20 years in the video game translation and localization business as of 2013, LAI has a thorough understanding of key players and has spent the past 2 decades fostering strategic relationships in the region with you – the video game developer/publisher – in mind.
As in Japanese business culture, “guanxi” – personal relationships – are considered vital in China. World Business Culture warns that the importance of the relationship building process should not be underestimated. LAI began its China initiative as a result of the incredible value we pass onto you due to our expansive understanding of the Chinese game market and unique resources we have acquired in our own journey. The Korean industry is no different, as the quality of relationships is considered the “key to business success.” In Korea, there is even a saying that advises the importance of these relationships, “Make a friend first and a client second.” Due to LAI’s strategic decision to remain a boutique game translation company amidst a growing population of large, corporate translation vendors, we ensure personal relationships are at the forefront of all business activities. (In fact, if you see on LAI's Twitter feed or monthly e-newsletter that our travel plans or attendance at a conference fit in with your own plans, you have an open invitation to coffee with our CEO!)
When considering markets for game translation and localization, from Southeast Asia to the highly competitive space in Japan, China, and South Korea and beyond, to the rest of the global market, it can be rather difficult to determine which region will yield the highest ROI. That is why we at LAI are working to add to our database of pertinent facts and statistics to ensure you are well-informed as you evaluate which markets are best for your organization.
LAI strives to keep game developers and publishers updated on key markets for localization. If you find any errors or have additional information to add, please let us know at firstname.lastname@example.org. You can also stay informed of our new webpages by subscribing to LAI's monthly e-newsletter. Please check back soon on LAI's Global Game Markets page as we frequently update our web content to reflect new industry statistics and market projections. Latest page update: April 2013.