Are Japan’s console and mobile game markets shrinking in favor of PC games? Developers discuss 

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Individuals from Japan’s game industry propose that we may soon be seeing new console games released by ex-mobile game companies. At the same time, others have suggested that both console game and mobile game markets are struggling in the face of PC games’ growing popularity. Such opinions were recently exchanged among Japanese game developers on X (formerly Twitter), giving some interesting insights into the current state of game companies. 

Post translation: I wonder how the industry is doing at the moment. I keep hearing that mobile/gacha games are struggling, but I don’t see console games doing that well either, and while PC games tend to go viral, it’s mostly the cheap/free ones (Palworld: $30, The Exit 8: $4). I feel like higher-priced products don’t sell anymore, or rather, people can’t secure the money for their hobbies. 

The discussion was prompted when game designer Yuo made observations about the apparent decline of both mobile and console games, noting that titles with high price tags are becoming less feasible as an option for consumers due to worsening financial circumstances. In response, game developer/Unity Engineer Taishi Yamada offered a series of insights gathered from various Japanese game companies. He notes that mobile game companies are currently attempting to recover from the ongoing decline of the mobile game market, and that some of their efforts include switching over to console game development or even establishing in-house indie labels. 

Post translation: I’ll give my answer as someone who spoke to a lot of companies in the video game industry while looking to switch jobs last year. First, mobile/gacha games are in decline. Every company is aware of this, and they are in the midst of trying to recover through corporate efforts. On the other hand, a significant number of gacha game companies have started diverting their efforts to console games. Although this is one year old information, there is an increasing tendency for them to launch console game projects. As console games take upwards of 3 years to release on average, perhaps we can expect some of these games to appear starting next year. Also, there are game companies that are looking to dabble in VR.
Post translation: As for The Exit 8 and Palworld, these are indie games so it’s kind of a different story. However, there seem to be companies trying to launch in-house indie labels, although they do not know if they can expect a profit from it yet. I get the impression that many companies are looking for new approaches and forms of revenue, while surviving for the time being with remakes of past titles. This is why we see companies dabbling in things like Roblox and NFT technology. 

Yamada suggests that a number of Japanese video game companies are currently in  “survival” mode, with remakes of existing IPs helping them stay afloat while they experiment to find their next major source of revenue. Although he mentions game companies showing interest in indie games, Yamada also states that (regardless of platform) these companies tend to be aiming towards large-scale development. Interestingly, Takuro Mizobe, CEO of Palworld’s developer PocketPair, recently commented that he wishes to keep the scale of his company and future games relatively small, with no intention of entering the triple-A market. 

The X discourse was joined by Indie-us Games representative Alwei, who offered a more nuanced stance on mobile games and emphasized the growing impact of Steam on Japan’s video game market. 

Post translation: I have many thoughts on this topic but, while we can’t expect mobile games to grow by leaps and bounds anymore, the stable ones will continue to be stable for a long time. We will be seeing fewer new titles though. At the same time, console games cannot be expected to grow as much as they did in the past, and PC games seem to be experiencing the biggest growth. Steam and GamePass keep getting stronger, and global users keep increasing. 

In a subsequent post, Alwei illustrates the dominance of PC games with the example of Capcom, who reported that approximately 50% of their video game sales in the second quarter of FY 2023 consisted of PC titles.  Incidentally, Capcom was also one of the few major Japanese video game companies to report a year-on-year increase in profit in their video game sector in 2023, with other giants like Square Enix, Koei Tecmo and Bandai reporting significant declines in profit in the past year. Of course, Capcom is a multi-platform company with significant sales figures in console games, but they had made a conscious decision to increase their focus on PC releases back in 2021 (Source: Nikkei Shimbun). 

Japan’s video game market is being impacted by several factors – including a drop in demand following the Covid lockdowns and the extreme depreciation of the yen. With consumer behavior and interests shifting, developers seem to be taking various measures to stay on top, the results of which we may see in the near future. 

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Amber V
Amber V

Novice Editor-in-Chief since October 2023.

She grew up playing Duke Nukem and Wolfenstein with her dad, and is now enamored with obscure Japanese video games and internet culture. Currently devoted to growing Automaton West to the size of its Japanese sister-site, while making sure to keep news concise and developer stories deep and stimulating.

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  1. Remarkable and a very insightful article, you have my respect for this and it makes me feel vindicated about everything i believed in on PC. For Mobile I think the novelty has worn off for users. As when they play on Steamdeck or when they play on PC, they begin to realize how feature rich Valve’s platform is with

    1. Steam Sales
    2. Recommendations for other games that you would like so it helps Indies, AA’s find their intended audience than it being random.
    3. The amount of customization options when it comes to controllers, game options, graphical settings etc. To where you can prioritize high framerate or graphics, maybe even the best of both if you know what you are doing and you have the hardware.
    4. Workshop for mods or allowing Mod support so everyone can add onto the game for fun.
    5. Adult content(which you do have to turn on in the options settings) which Valve generally approves of for the most part, except rare times when it’s a bad reviewer on the panel who has a personal vendetta. This is a huge reason due to Sony’s censorship it has pushed users onto this platform.
    6. Online is free(which might be why Japanese users and American users are shifting overall) plus talking to your friends is seamless even on the App and even Remote Play is good as well.
    7. Spending points for Emotes, Wallpaper backgrounds, Avatars etc including a cool intro screen that can be purchased as well.

    Other than the obvious benefits of being able to stream, and edit videos among other things. This is PC’s hidden strength for the user to customize their experience however they would like to have it, than to have things being forced onto them. When someone experiences a unique thing like this it is difficult to not tell your friends about it, and more people to get on board as a whole. It’s why Japanese users are flocking to it, and why Consoles have been falling with the exception of Nintendo who focuses on gaming first and understands the market because it needs to. Both Valve and Nintendo have no censorship policies and rarely enforce rules if ever. They value creative expression, especially with Fanservice titles. Because they sell and they are reaping the rewards of that from the users.

    I feel that Japanese companies when they expand onto PC need to be absolutely careful in the sense that it should be passion projects, things they really would like to make, not just Gacha, Graphics, and generic stuff you would have on consoles, that you are just cashing in on trends only. But are unique experiences, that come from the heart. Whether it’s Dungeon Crawlers(DRPG), Schmups(STG), Simulation Life Games,RTS, Open World Survivalcraft, Fighting Games, Visual Novels, Action Games, Fanservice, Strategy Games, VTuber, Idolmaster titles etc people will buy it and will see that you are trying to push the industry forward rather than just to fit in a small hole like everything else, it’s authentic. It’s like the PS2 era or Japan Studios, that is what people are yearning for and missing dearly. It’s why Palworld and Helldivers 2 are very successful on PC than Consoles.

    Ending off I do believe Japan will pull it off in Video Games and return back to greatness again than the delay in 2017 with Sony. It will help push things back to where it should be.