Blockchain Games in Japan
#1 Market Overview
TL;DR
Japan is currently one of the largest gaming markets. Starting in 2021, the country's key game developers have been entering the blockchain gaming space, with 17 Japanese gaming companies stealthily preparing for a game or ecosystem launch.
Oasys Protocol, which is jointly developed by Double Jump Tokyo, Bandai Namco, Thirdverse, YGG, Sega, and others, is currently the most notable regional Layer-1 Protocol gaining momentum
However, due to low awareness from non-crypto gamers and a lack of visible success, it is expected to take a longer than expected time for mass adoption in Japan.
Intro
The Japanese gaming market is one of the largest in the world, with an estimated 110 million players and a very strong global IP presence. Many AAA game companies like Square Enix and SEGA have recently shown interest in blockchain gaming through direct and indirect investments. In fact, over 50% of the top 30 Japanese game companies in terms of revenue in 2021-22 have shown interest in blockchain.
Japanese Game Developers in Web 3
Japanese game developers can be classified into three categories based on the level of execution below :
Phase 1: Review
Stage 1 game developers mainly explore blockchain technology indirectly by forming partnerships with or investing in blockchain-related startups. Some developers have also established subsidiaries to conduct a comprehensive review of blockchain gaming business opportunities.
Phase 2: Test
Stage 2 game developers are more actively involved in developing blockchain games. However, instead of developing blockchain games in-house using their existing intellectual property, some developers are experimenting with a more passive approach by outsourcing development to web3 game studios or sharing their intellectual property.
Phase 3: Deploy
Stage 3 game developers have launched blockchain games on public protocols such as Ethereum and BSC, but have received minimal attention from global audiences and gamers, leading to industry disappointment. In contrast to US or Korean markets, Japanese game developers are not directly developing blockchain games by building their own mainnets or platforms. Rather, they are primarily experimenting with partial blockchain elements within games or providing their IP to web3 game studios in a passive manner.
The Layer-1 ecosystem is still in its early stages.
Japanese game developers have yet to achieve success in building their own blockchain ecosystem, unlike their Korean counterparts. This may be due to the lack of successful blockchain game cases in Japan. Interestingly, unlike Korean game developers, Japanese companies show a willingness to share their IP with others. The Japanese blockchain game market is now centered on Oasys Network, a game-specific blockchain with advantages such as zero gas fees and fast transaction speeds. The network is gaining momentum through the participation and investment of notable companies such as SoftBank and Square Enix.
Double Jump Tokyo, a web3 game studio operating within the Oasys Network ecosystem, deserves our attention. The studio's founder is also a founder of Oasys Network, and has established close ties with several Japanese AAA game developers. While there have been few globally recognized successes, Double Jump Tokyo and Oasys Network are emerging as leaders in the Japanese blockchain gaming market. Over half of the projects within the Oasys Network are related to Double Jump Tokyo, including MCH, which was spun off from the studio.
Conclusion
It is expected that more Japanese blockchain games will be onboarded to the Oasys Network in the future, but the lack of clear competition in the industry makes it uncertain if it can establish itself as the leading blockchain gaming chain. Double Jump Tokyo is also in a similar situation as there are no globally recognized successful blockchain games, apart from My Crypto Heroes.
Therefore, the success of Oasys Network's onboarded games, especially the upcoming blockchain game that utilizes SEGA's Three Kingdoms IP in 2023, will be closely monitored. If successful, the IP from various Japanese AAA game developers closely connected with Double Jump Tokyo will be added to the Oasys Network, leading to continued growth in the Japanese blockchain gaming market. However, if not successful, the industry may face criticism from existing gamers, leading to a challenging period for the companies involved.