Both Japanese and Western companies can benefit greatly from collaborating with one another as this is a great way for them to enter on new markets. App localization will become a key tool in making this happen.
In an article on Forbes, Tero Kuittinen informs us about the latest trend on the mobile app market: globalization.
According to Kuittinen, website App Annie stated that as of last October, the Japanese app market is the biggest market for mobile applications worldwide. Japanese app revenue is expected to surpass that of the USA by 30-40 per cent by Christmas 2014.
There is no dominant player on the Japanese app market, Kuittinen says: Apple and Google roughly have the same share of the market.
Moreover, only two western players have found a way to fully enter the market, and according to Kuittinen, both had to go to great lengths to do so. One of these companies is Supercell. This Finnish company entered into partnership with GungHo, a Japanase app giant, mid-2013 and later sold a little over half of their shares to GungHo and Softbank. The other one is King, which launched a fairly aggressive television campaign to promote their “Candy Crush Saga” app, Kuittinen says. The efforts of both companies did pay off: according to Kuittinen, the two companies recently had 3 apps in the top 10 apps for iPad devices and two in the top 10 for iPhones.
Kuittinen says that up until a year ago, Western companies struggled to enter the Japanese market as the Japanese have always been quite hostile towards Western games. This is why US companies such as Electronic Arts and Zynga have never found a way to tap into the market.
Now that the GungHo-Supercell partnership has proven to be such a hit, Kuitinnen notes that Japanese companies are now all looking for Western counterparts to collaborate with. This is why he predicts many more of these collaborations in the near future.
The shares for KLab, for example, have tripled in price after the company reported that it would launch a Microsoft game franchise on the Japanese market. However, Kuittinen says this price was already halved in autumn. According to him, this is also part of a new trend: share prices of Japanese app companies can fluctuate greatly in a time frame of weeks or mere days.
An interesting example of a Japanese company that is trying out international waters is CROOZ, Kuittinen says. There are working on a game called ACR DRIFT, an app based on PC game Auto Club Revolution, which has been quite a hit in Russia and China. In fact, CEO of ACR’s developer Eutechnyx Darren Jobling states that the PC game is expected to have 1 million users by the end of 2014. According to Kuittingen, by licensing a racing game, CROOZ is steering away from their usual game plan as the company is mainly known for its hard-code battle games.
Kuittinen finds it interesting that Japanese markets are now localizaing Western games to be released on the Western markets again. However, he predicts this cross-border experimentation along with app localization will become a widespread phenomenon in 2014. Japanese games might tweak Western games for the western markets, or alter their own games to appeal to users abroad – the possibilities are endless.