Comments on: Games overtake electrical sector in Japan

Japanese game companies now make more money then electronics companies. Will video games save the economy?

[ddhboy]

Except the games market in Japan is in decline, and the Japanese that are profiting in mainly make of their money overseas in western territories like North America and Europe.

[daverosenberg]

That's not exactly right and what I was trying to say in the post is that the game companies are doing better than electronics which Japan is usually known for -- even if their domestic games market is declining (which it really isn't.)

[gfasol]

hi ddhboy:
You address three separate issues:
(a) Japan's game companies, e.g. Nintendo, SegaSammy, Sony-Computer-Entertainment etc,
(b) sales of games hardware and software in Japan (including US companies e.g. MS-XBOX),
(c) the degree of globalization of Japanese games companies

We document and analyze all three issues in great details with graphics in our reports.
(a) We show in our Japan-Games report ( http://www.eurotechnology.com/store/jgames/ ) that Japan's games companies are doing very well financially with the exception of SONY-Computer Entertainment (which seems to be slowly improving however)
(b) We document in the same Japan-Games report, that Japan's games markets are growing - not declining. It is true that the sales of video games software are declining - however, this is more than compensated by mobile phone games and online games. The market has been declining in Japan between 1997 - 2001 - so maybe you have outdated statistics. I recommend that you consult up-to-date reports such as ours. If you use statistics or reports from 2001 or 2002, then its true that you can get the impression that Japan's games markets are declining.
(c) Japan's games and electrical companies differ very much in their degree of globalization (you'll find that documented in detail in our report on Japan's electrical companies ( http://www.eurotechnology.com/store/j_electric/ ) - some Japanese games / electrical companies have 90% of business inside Japan and 10% outside Japan, and vice-versa. So its not true in general, that Japanese companies mainly profit in US and EU - some do, some don't. I guess that statement applies for US companies, EU companies etc. So this has nothing to do with a company being "Japanese" or not.

[Kwasiowusu]

@ gfasol :"(a) We show in our Japan-Games report ( http://www.eurotechnology.com/store/jgames/ ) that Japan's games companies are doing very well financially with the exception of SONY-Computer Entertainment (which seems to be slowly improving however)"

But that is not even right.
I'll just use a few Japanese games companies that are still making losses as an example:

Marvelous Entertainment
Results for the 12 Months Ended March 2009
Net Sales: 10,139 million yen
Net Income: -1,221 million yen (loss)
http://www.mmv.co.jp/company/index.html
http://www.mmv.co.jp/common/images/v...5h21tansin.pdf

Nippon Ichi
Results for the 12 Months Ended March 2009
Net Sales: 2,073 million yen
Net Income: -65 million yen (loss)
http://www.nippon1.co.jp/index.html
http://www.nippon1.co.jp/news/pdf/2009/20090515_1.pdf

Nihon Falcom
Results for the 6 Months Ended March 2009
Net Sales: 450 million yen
Net Income: -34 million yen (loss)
http://www.falcom.co.jp/kaisya/ir/result.html
https://www.release.tdnet.info/inbs/...0424064414.pdf

Sega Sammy
Results for the 12 Months Ended March 2009
Net Sales: 429,194 million yen
Net Income: -22,882 million yen (loss)
http://www.segasammy.co.jp/japanese/ir/index.jsp
http://www.segasammy.co.jp/japanese/...0513_final.pdf

AQ Interactive
Results for the 12 Months Ended March 2009
Net Sales: 6,180 million yen
Net Income: -468 million yen (loss)
http://www.aqi.co.jp/cgi-bin/ir-information/archive.cgi
http://aqi.co.jp/ir-upload/pdf/200905121557.pdf

Sega is still one of the biggest Japanaese games companies, no?
As for Sony, they made their first loss in 14 years, in May this very year.
http://news.bbc.co.uk/2/hi/business/8049323.stm

[ArsFragica]

The Japanese economy will collapse with the PS3 losing it's share in the gaming market. Sony used to the top dominant game company until they released a gaming console that had features nobody needed, games that sucks, the online service far obsolete compare to competitors, and a price tag that doesn't make sense. Sony is probably one of the worst game console makers now. Sorry Sony.

[Kwasiowusu]

From article :"In a recent newsletter, Gerhard Fasol, head of Eurotechnology Japan, points out that the Japanese games sector is booming"

Huh?
On what planet is that?
Maybe you might have consulted your own sister site Gamespot, who had an aricle on the decline of the Japanese games industry, just a few days ago:
Gamespot:
"Japanese game market shrinks 24% in 1H '09 - Report
. Citing figures provided by Japanese stat-tracking firm Enterbrain, IT Media reports that industry sales had fallen to ¥218.9 billion ($2.3 billion) in Nintendo and Sony's home nation from December 29, 2008 to June 28, 2009, a year-over-year decline of 24.4 percent. Delineated further, IT Media reports hardware sales were down 27.6 percent during the period, with software slipping 21.8 percent"
http://www.gamespot.com/news/6212978.html

Even Nintendo's own Iwata had this to say about Wii sales in Japan:
"The Wii is in the most unhealthy condition since it hit the Japanese market," he told the crowd, according to the Agence France-Presse news service. "The current condition in the Japanese market is not the one we want." However, Iwata did say that declining Wii sales were partly due to the Japanese character. "The speed with which people get tired of any new entertainment is faster in Japan than in overseas markets," explained the executive"
http://www.gamespot.com/news/6207701.html

As a matter of fact, the only console that has registered big year on year sales increases in Japan in the first 6 months of the 2009, has been the XBOX 360.
Through the first twenty-seven weeks of the year, overall sales are down. However, the systems can be split into camps of 3 up and 3 down. Here's how the year-to-date year-over-year percents stand as of now.

Wii: -62.9%
DSL+DSi: +3.0%
PS2: -50.5%
PS3: +6.3%
PSP: -45.5%
X360: +204.7%
XBOX 360 2009 sales year to date, have more than tripled 2008 levels.


From atricle :"What's interesting about the growth of Japanese game play is that it's mainly on consoles and handhelds "

WRONG!
Console and handled sales overall are down in both hardware and software YTD.
Home hardware: -39.1%
Portable hardware: -24.6%

All in all, a pretty poor article. It's like saying the sun is shinning, when its a very dark cloudy night.

[daverosenberg]

The article simply stated that game companies are doing better than electronics. Thanks for all the data.

[baconstang]

But who or what will save us from the games?

[daverosenberg]

Robots.

[gfasol]

@Dave-
we are picked up in China:
http://games.sina.com.cn/t/n/2009-08-07/1155330686.shtml
Gerhard