JRC seminar at SOAS, University of London.

1. History of Japanese
Video Game Industry
Yuhsuke Koyama
Shibaura Institute of Technology

2. Nihon Digital Game Sangyoushi(2016)
▶ Book of History of Japanese Video
Game Industry
 Written in Japanese
 Now on translating
▶ It may be the first book about the
history of video game industry in
one country.

3. 3+1 Markets (or platforms)
Arcade
PC
(online) Console Mobile
Phone
21st Century New!
Arcade
20th Century 70s~
PC
(Standalone)
80s~
Console
80s~

4. Origins of game companies
Arcade Console
(Toy)
Other
Online Service
PC
(Before Internet)

5. Periodization in history
Dawn
2D era
3D era
Handheld era
Smartphone era

6. Important events of
Japanese game industry
▶ Five turning point of history
 Dawn: Space Invaders (1978)
 2D era： Family Computer (NES) (1983)
 3D era： PlayStation (1994)
 Handheld era： Nintendo DS & PlayStation3 (2004 & 2006)
 Smartphone era： Puzzle & Dragons (2012)

7. Dawn
Space Invaders (1978)

8. History summary (1) dawn and 2D era
1. In 1970s, Video Game industry began in arcade.
2. In 1980s, Also began in PC and home console.
3. The market leader of two eras was arcade.
4. Game graphics technology was 2D.
5. Game supplied with ROM cartridge for consoles.
Arcade
70s~
PC
80s~
Console
80s~
Leader!

9. Summary in 1970s.
1972
(PONG)
Arcade
1975 1977 1978 1979
PC
Console
(Apple ][)
(Atari VCS)
TV Tennis
1976
(BREAKOUT)
First PC
in Japan
(1978)
1980
Game&Watch
Golden age of Ele-mecha
Starting the history of
Japanese game industry
Single function console era: no imported game consoles hit in Japan
Block
Kuzushi
Inadequate performance and there were no influential works

10. Arcade Games Companies
▶ Some companies have long history.
 Founder was non Japanese.
 SEGA: Established in 1931 at Hawaii.
 TAITO: Established in 1951.
 NAMCO: Established in 1955.
▶ Coin-operating amusement machine industry
 Pinballs, Juke box, Peanut vender, Electric horse,…
 They sold Ele-mechas to “game center”s.

11. Sega’s Jukebox (1970)
Photo: Koyama, at a bar in Shinjuku

12. Three titles that established arcade
game industry in Japan
▶ Block kuzushi (1977)
▶ Space Invaders(1978)
▶ Galaxian(1979)

13. Block kuzushi (1977)
▶ A name of genre for the illegal
mimic of Atari’s BREAKOUT.
▶ Japanese arcade game industry
studied the production of arcade
game machine through
developing Block kuzushi.
▶ CPU was not used in most of
Block kuzushi games including
BREAKOUT.
 Game programs were physically
realized using logic circuit. Breakout (Atari, 1976)

14. Space Invaders (Taito,1978)
▶ First original game using CPU
in Japan
 Midway’s 8080 mainboard
 Developed by Tomohiro
Nishikado, TAITO
▶ 300,000 illegal copies
 100,000 original
 100,000 lisensed
▶ Many “Invader House” and
“Game Center” were
everywhere in Japan

15. NHK’s News Clip
▶ https://www2.nhk.or.jp/archives/tv60bin/detail/inde
x.cgi?das_id=D0009030166_00000

16. Galaxian (Namco, 1979)
▶ Establish the basic
architecture for arcade
games and home consoles.
 2D Graphics architecture
 BG Screen + Sprite

17. Architecture of 2D graphics
Virtual Screen 1
Virtual Screen 2
Virtual Screen 3
Sprite Layer
Structure the screen
by stacking virtual screen
and sprite layer

18. 2D era
Family Computer (1983)

19. Summary in 1980s.
Arcade
1983
PC
Console
1990
Amusement Business
Act (1984)
UFO Catcher
Hang On
(1985)
Social Problem Leisurelandization
PC-8801mk2SR(1985)
PC-9801VM(1985)
Nintendo’s Famicom decided the basic business model.
Although RPGs and ADVs had strength, market began to shrink in 1990.
(1983)
(1985)(1983) (1989) (1990)

20. Home Consoles
▶ Some consoles were imported but not hit.
 VCS (Atari), Channel F (Fairchild), Studio II (RCA), …
▶ Cassette Vision (1981, Epoch )
 First hit in the cartridge style console (300,000).
▶ July 15th , 1983
 Family Computer (Nintendo)
 SG-1000 & SC-3000 (SEGA)

21. Cassette Vision (1981, Epoch)
Source：Wikipedia(JP)

22. Family Computer (Nintendo)
SG-1000/SC-3000（SEGA）
Wikipedia (JP)

23. 8-bit Console Sales(million)
0.45
1.65
3.74
3.9
1.78
0.21 0.25 0.31
0.19 0.18
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
1983 1984 1985 1986 1987

24. Family Computer
▶ Overwhelming high performance.
▶ Important chips were designed exclusively for cost
reduction.
 Integrated 6502 CPU & sound function.
 PPU (Picture Processing Unit)
▶ Third Party supplied various games.
 Hudson, Namco (1984)
 Konami, Taito, Enix, Bandai,…(1985)

25. Third Party Control
NintendoGame Company
Factory
Cartridge production
request
License Fee
Royalty contract
Pay all in advance
Game Company Nintendo
Cartridge production
request
Factory
OEM contract
Business Standard

26. 1987 1988 1989 1990 1991 1992 1993 1994 1995
PCE 0.6 0.83 0.92 1.27 1.03 0.67 0.4 0.1 0.02
MD 0.2 0.6 0.9 0.7 0.4 0.45 0.1 0.03
SFC 0.66 3.15 3.58 4.43 2.65 1.78
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
Next Generation Battle (million)
PC Engine (1987)
Mega Drive (1988)
Super Famicom (1990)

27. Summary (1)
Dawn and 2D era

28. Performance Image of
arcade, home console and PC
Graphic Performance
Computational power
Data size
Arcade
Home
Console
PC

29. Image of Innovation Trajectory
Total
Performance
Arcade
78 81 83 90 93 9485
PC
PC-8801
PC-98VM
PC-9821
Home Console

30. Summary for dawn and 2D era
▶ Three markets are separated and have own strength.
▶ PC:higher age group, high screen resolution, possible
to save
 ADV, RPG, SLG
▶ Arcade: High performance, aggressive innovation
 Action, shump, Fighting,…
 Large cabinet game: race, body sensation games
▶ Console: lower age group, many users
 Performance: Degraded version of arcade game machine
 Released game: any genre

31. 3D era
PlayStation

32. 2D vs 3D
Final Lap R (Namco, 1993) Ridge Racer (Namco, 1993)

33. 光源ight Source
3D Graphics

34. History summary (2) 3D era
1. PlayStation (1994) changed the world and the
market leader became home console.
2. Arcade was down, PC was nearly extinct.
3. 3D graphics
4. Games were supplied by disk, game price declined
5. PC online game is born, but Japan is weak.
Arcade PC

35. Summary in 1990s.
Arcade
1994
PC
Console
2000
1993
Print Club
(1995) DDR
(1998)
Virtua Fighter and Ridge Racer were the last glory.
1996
PlayStation change the world!
Non-adult, standalone PC games become extinct at most without indies.
Win95 broke the language barrier
1998
(1998)

36. PlayStation
▶ Firstly, “Play Station” was a
codename for the CD-ROM
integrated Super NES.
▶ Sony decided to develop a game
console alone
▶ Development Goals
1. World-class graphic workstation
2. Within ¥39,000 (300 GBP)
3. Game: within ¥5000 by CD-ROM
▶ Simple board design, few parts
 winning price competition with Saturn
Win!

37. Impact of new generation (1)
Change of the innovation leader
▶ Arcade game developers did not have enough skill
 They could neither design system board using 3D graphics
nor develop 3D graphic games.
 Only Namco and Sega could do both in Japan before
PlayStation released.
⇒The privileged position of the arcade game was lost
& Console became the innovation leader.

38. Impact of new generation (2)
Cost Structure
▶ Disk media reduce the price of games.
 ROM Cartridge: more than 10000 JPY (= 67 GBP)
 Disk Media: less than 6000 JPY (=40 GBP)
▶ The share of the game company did not change.
 About 3000 JPY (=20GBP)

39. Change in power balance
▶ After PlayStation (1994), technology driver in
computer was game console for more than 20 years.
▶ After Windows 95, PC performance increase rapidly.
▶ Arcade become inferior in performance.
 3D graphic game board was very difficult to design.
 Console compatible board becomes mainstream.
 Sony sold PlayStation compatible boards to game companies.
 NAOMI (DreamCast compatible board,SEGA)
is popular for many game developers.

40. Handheld Era
Nintendo DS & PlayStation3

41. History summary (3) Handheld era
1. In home console, profitability declined due to
soaring development costs.
2. Handheld console reversed home console in 2006.
3. Japanese game were not sold well overseas.
4. Mobile phone appeared and social game was a
severe social problem because of gacha (= loot box).

42. Summary in 2000s.
2004 2008
Handheld market reversed console market in 2006
2001
1999 2002
Since 2003 when QVGA liquid crystal generalized, mobile phone games
became popular. The non-social game market saturated around 2010.
2002 for PS2 and PC
Most Japanese game companies have failed to enter online games.
2008
Console
Item charge gradually popular
2006
The casual revolution of Wii failed.
Japanese company lose international competence .
2006
2003

43. Home game market (billion JPY)
0
200
400
600
800
1000
1200
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Japan North America Europe
Lehman
Shock
DS
effect

44. Soaring development costs
http://cdn4.wccftech.com/wp-content/uploads/2013/09/Game-Budget.jpg

45. Package arts: Dragon Warrior and Dragon Quest
Image source:DQ http://dqmuseum.jp/sp/history.html DW:Wikipedia(en)

46. Sustainability Crisis in home console
Console Release Retail Price Estimated
Cost
Difference
PlayStation2 2000 ¥39,800
$299.99 (US)
$440 -¥5000
Xbox 2002
2001(US)
¥34,800
$300(US)
$323 -¥2500
Xbox360 2005 ¥39795
$400 (US)
$525 -¥12500
PlayStation3
(20G)
2006 ¥49,980
$500 (US)
$805.85 -¥30000
(200GBP)
Wii 2006 ¥25,000
$250 (US)
Less than
¥15,000
+¥10000

47. Technology development image
(home console and stationary devices)Total
Performance
1995 1998 2000 2006 2013
PC
Home Console
Arcade

48. 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
DreamCast 0.49 1.01 0.39 0.2 0.06
PlayStation 4.31 2.55 0.81 0.28 0.23 0.03
PlayStation2 3.43 4.09 3.92 2.93 2.59 2.12 1.25 0.76 0.46 0.2 0.09 0.07
PlayStation3 0.61 0.89 1.04 1.78 1.68 1.55
Nintendo 64 1.19 1.12 0.27 0.1
GameCube 1.2 1.08 1.1 0.42 0.19 0.04
Wii 1.14 3.85 2.8 1.93 1.73 0.99
Xbox 0.04 0.08 0.04 0.02
Xbox360 0.12 0.2 0.25 0.4 0.36 0.25 0.12
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
Home Console Sales (million)

49. Background: Aging Population

50. Game software sales (million)
Source: Game industry white paper DECADE
0
10
20
30
40
50
60
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Home Console Handheld Console

51. 0
1
2
3
4
5
6
7
8
9
10
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
GB GBA DS GG WS PSP
Handheld Console Sales (million units)

52. Number of companies that released the game
0
10
20
30
40
50
60
70
80
90
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
GBA DS PSP PS2 GC PS3 Wii Xbox360
Developer shifted to
the handheld consoles.

53. Smartphone Era
Puzzle & Dragons

54. History summary (4) Smartphone era
1. Smartphone and Puzzle & Dragons (Gung-Ho, 2012)
changed the industry.
2. The market size of mobile phone games pulled out
that of home console games in 2012. and it was
more than 3 times in 2017.
3. Japan do not adapt to the new trend, such as e-
sports or game commentary.
4. Loot box problem all over the world.

55. Social Problem: High expenditure
Nihon Keizai Shimbun June 22nd ,2012
4
millionyenfornetgames
Counseling to consumer center
on online games is increasing
¥4,000,000
=￡27,000

56. Summary in 2010s.
2012 2016
Puzzle & Dragons changed Japanese game industry!!
2011
No gacha but profitable
2014
The presence of STEAM platform is increasing.

57. Mobile & Smart phone Shift
Handheld Console Mobilephone Smartphone
2004 DS / PSP
2006 Structural Change
Handheld console
> Home Console
Non-social game market
almost saturated
2007 Increase social game
release
2008 iPhone sales started in
Japan
2011 3DS / VITA
Price cut during the
same year (3DS)
Peak of social game
boom
Social problem
Smartphone market
share exceeds 50%
2012 Guidance of Consumer
Agency to Complete
Gacha
Puzzle &
Dragons
Structural Change Smartphone > Mobilephone
2016 Switch Pokémon GO

58. Smartphone VS Handheld
▶ Production Cost: three hardware released in 2011
 iPhone4S: $188
 Nintendo 3DS: $101
 PS VITA: $159.1 (without memory card)
→ iPhone has better performance from release
▶ Difference in unit sales
 iPhone Sales (2018,1Q): 77 million units
 Nintendo 3DS total sales: 72 million units
→ Overwhelming difference for install base
▶ There is no reason to purchase game consoles today!

59. Drastic Market Shift to Smartphone
the case in KLAB inc.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sep-Nov Dec-Feb Mar-May Jun-Aug Sep-Dec Jan-Mar Apr-Jun
2012 2013 2014
App Store Google Play Mobage GREE mixi Other
Smartphone Mobilephone PC

60. Puzzle and Dragons (Gung-Ho, 2012)
▶ First Hit on Smartphone
▶ Historical big hit
 20% of game sales in the first half of 2013
is Puzzle and Dragons
 Monthly profit: 7.0 billion yen to 10 billion
yen at the peak
 In home console game case, more than 2 million
packages are sold every month.
▶ Revenue source: Gacha by Gachi-zei
 Gachi-zei: Serious? players

61. Example of Gachi-zei
Are you the Gachi-zei of
Puzzle & Dragons? I'm
putting my life on Puzzle &
Dragons. If you’re Gachi-
zei, reply by 10th. If no
reply, I will resolve
friendship with you. It is
sorry, I am serious.
In Pazzle & Dragons, a player can send a message only once to a friend.

62. Gung-ho's Sales & Operating income
(1 billion yen)
0
20
40
60
80
100
120
140
160
180
2011 2012 2013 2014 2015 2016
Sales Operating income
Release Puzzle & Dragons
in 2012
Puzzle &Dragons
related sales
88.6% of the total (2015)

63. Why so profitable?
Service as a game
Package Games Item charge games
Demand
Price=Willing to Pay
0
Sales
Demand
Price=Willing to Pay
0
Sales

64. Technology development image
(handheld device)
Total
Performance
1999 2000 2004 2008 2011
Mobilephone
Smartphone
Handheld
Console

65. Total Summary
Inter market competition

66. Arcade
Home
Console
PC
the 1980's to
the early 1990's
Graphics
Performance
Computational capacity
Data size
Arcade
Home
Console
PC
Graphics
Performance
The late 1990‘s
to the early 2000's
Computational capacity
Data size
Arcade
Home
Console
PC
Graphics
Performance
Current Situation
Computational capacity
Data size
Convergence of performance
Today there is little performance difference
among platforms.

67. Home Console VS PC
Inter-market competition
Handheld Console VS Smartphone
VS
VS

68. Digital Convergence
▶ PC merges…
 TV
 Video Recorder
 Audio equipment
 Word processor (in Japan)
 Phone
▶ Smartphone merges…
 PDA (Personal Data
Assistance)
 Music Player
 Digital camera
 Video Camera
 Watch
Game dedicated console is the last resort!

69. What kind of demand is still existing for
game consoles?
1. Parents whose children are too young to have a
mobile phone
2. Manias who are not satisfied by smartphone games
3. People with low operating skills on PCs and
smartphones
4. A person trying to use it for entertainment at a
party

70. Today’s Summary (1)
1. The Japanese video game industry became
conservative due to the successful home
game market, and failed to enter the
emerging market such as online game
market.
2. As computer performance rose, the
difference in the artwork preference
became clear. This is why Japan could not
get the position in the growing European
and North American markets.

71. Today’s Summary (2)
3. Japan is now behind the West in terms of
technology.
People with project management or
advanced design skills necessary for large-
scale development were inadequate.
There are few universities teaching game
development in the Japan. Also, Japan
have relied on spontaneous genius such as
hacker boys. As a result, few people in
video game industry receive advanced
education up to graduate level.

72. Today’s Summary (3)
4. From these results, the Japanese gaming
industry flowed to easier way, social games
/ smartphone games where the technical
value is not so much needed, high value is
given to animation-like pictures.
Some companies have gained high profits,
but there are also many moral problems.

73. My Impression throughout the history of
the Japanese game industry
▶ The story of the fall of Japan.
▶ To me, the Japanese gaming industry and
the US automobile industry seem to overlap.
 It was respected as No.1 in the world.
 However, it could not adapt to changes in the
environment.

74. Game Over
I appreciate getting into my poor Eng”r”ish

75. Appendix
Price Discrimination
Why is item-based game high profit?

76. How to gain more profit from a game
▶ Roughly two ways
 Increase new users
 Increase customer unit expence
▶ Increasing new users is very difficult
 New title can not sell well
 Even sequels reduced sales
 Budget of advertising is very limited
→ There is no way to raise the unit expence per customer

77. Product characteristics of video game
▶ Situation is a kind of Monopolistic Competition
▶ Preference is very strong
 Some users do not need it even for free
→ There is no simple price competition
▶ Consumers have royalties on game titles
 Even if raising the price, quite a few consumers follow
▶ Each user has a "reasonable" line & purchase a game if
price is cheaper than his/her price line

78. Demand curve in video game
▶ Demand curve
 "Distribution of latent
consumers in order of
maximum payable amount"
▶ Purpose of the game
company
 Make profits under this
environment
 Maximize if possible
Number of people
(demand)
Maximum amount
consumer can pay
0

79. Package game business:
Large opportunity cost
▶ Sell to all at the same price
 Large loss profit
▶ Loss profit: 2 kinds
 He bought higher price...
 Hatched in blue
 If cheaper, it was sold ...
 Hatched in red
Sales
Maximum amount
consumer can pay
0
Part where sales
can not be collected
Number of people
(demand)

80. Price Discrimination Strategy
▶ Increase sales by presenting individual prices for
each customer
 High price for customers who pay even for high prices
 Low price for customers who do not buy at a low price
▶ Price Discrimination in Package game:3 kinds
 DLC (Download Contents)
 Limited Edition
 Low price edition
 Low price edition is also a competitor for the second-hand
game package

81. Price Discrimination Strategy
in Package Game
Number of people
(demand)
Maximum
amount to pay
Sales
DLC
Number of people
(demand)
Maximum
amount to pay
Normal
Edition
Limited
Edition
Number of people
(demand)
Maximum
amount to pay
First
Version Low
Price
Version
(1)Download Contents (2)Limited Edition (3)Low Price Version

82. Characteristics of Social Games
▶ Sell “Service” rather than the package
 Sell play experience and convenience during play
 While consumers are playing, it is a revenue opportunity
▶ Small price discrimination is possible because
minimum charging unit is small
 10000 yen from those who can pay 10000 yen
 100 yen from people who want to try only 100 yen

83. Price Discrimination Strategy
in Social Games
▶ Very small charge unit
→ Depending on the direction, it
is possible to have the upper limit
be paid by himself / herself
→ Possible to make all of the
triangle's area into sales
Sales
Number of people
(demand)
Maximum
amount to pay
0

84. Summary:
item-charging business model
1. Basic charge free: attracting a large number of
potential customers
2. Price discrimination much more finely than package
3. the core of the business moves
1. Payment: Consideration for game experience
2. From Package to Service: Game as a Service

85. Expansion of maximum amount
by 'directing‘?
▶ Design that allows players feel
comfortable / enjoyable by
charging
▶ Developer's remarks at CEDEC
to design game difficulty if a
player charge monthly…
 5000 yen:
he/she feels “I am strong!”
 30000 yen: Almost invincible Number of people
(demand)
Maximum amount
consumer can pay
0
Increase payment more
than reasonable behavior
with various directing

86. Gacha and Prospect Theory(1)
▶ In the knowledge of behavioral economics, especially
“Prospect Theory”, human behavior in item-charged
game can be explained to some extent
1. Humans do not calculate the loss by "the total amount
of loss (gain)" but "difference from reference point"
→ By collecting 300 yen each time, shift the reference
point every time. Feeling "just 300 yen put out" → finally
to 100,000 yen.

87. Gacha and Prospect Theory(2)
2. Evaluation of gain/loss: As it goes away from the
reference point ...
 Gain: the growth rate of plus evaluation weakens (decreases)
 Loss: Increase in negative rating growth (gradual increase)
→ Since the sense of repulsion strengthens when
expenditure per turn becomes expensive, it keeps it cheap
(about 100 yen to 300 yen)

88. Gacha and Prospect Theory(3)
3. For phenomena with small probability, humans tend
to estimate the occurrence probability excessively. In
other words, in response to the phenomenon of
"nearly 100%" it responds excessively to "not 100%"
and responds excessively to "little probability"
phenomenon "probability is not zero“.
→ The user is more likely to think that "Rare item may
be hit by Gacha" more than the actual probability

89. Slides not used due to time

90. The prehistory of Japanese video game industry (1)
▶ First video game in lab
 OXO on EDSAC in UK
▶ Industrial games were born in the U.S.
 Arcade: Computer Space(1971), PONG(1972)
 Console: Magnabox Odyssey(1972) ,
Atari VCS (1977, later called Atari 2600)
Magnabox Odyssey Atari Video Computer SystemOXO on EDSAC
(emulation on MAC OS) Photo: Wikipedia (EN, JP)

91. The prehistory of Japanese video game industry (2)
▶ Two markets collapse
 Crash of 1977: market crash for consoles using PONG chip
 AY-3-8500 (General Instruments)
 Crash of 1983: called “Atari Shock” in Japan
 Large stocks were buried in New Mexico's desert.
=>Japan becomes a leader in the game industry.
http://americanhistory.si.edu/blog/landfill-smithsonian-collections-et-extra-terrestrial-atari-2600-game

92. Elemecha
▶ Generic term for electromechanical
playthings
 Elemeca with electric + mechanical
▶ MiniDrive (1959)
 Kansai Seiki Seisakusho Co., Ltd.
 Established in many department store
rooftops
▶ Kansai Seiki Seisakusho Co., Ltd.
 No.1 company at the time
 Could not adapt to computerization
Source：http://www.ne.jp/asahi/cvs/odyssey/creators/kasco/2p.html

93. Slides not used in 2D era

94. Arcade (1) Crisis
▶ Fuzoku Eigyou-hou (Amusement Business Act,1984)
 Gambling machine problem
 Youth delinquency problem
▶ Sharp decline in market size
 Family computer (1983)
 Amusement Business Act (1984)

95. Arcade Operation Sales (Billion JPY)
Source: Leisure White Paper 1993 Edition
450 457 479
408
340 326 349
402
474
561 600
0
100
200
300
400
500
600
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992

96. Social reputation at the time
Police White Paper (1984)
May 17, 1979 Asahi Shimbun
Conscience
shot down
Juveniledelinquency
Adultsalsogowrong

97. Arcade (2) Recovery
▶ Image Recovery through Leisurelandization
 Taikan Game (Bodily Sensation Game)
 Sega: Hang On (1985), Outrun (1986), After Burner (1987)
 Crane Game: UFO Catcher (Sega, 1985)
 Street Fighter II (Capcom, 1991)
▶ Active innovation
 FM sounds, 3D Graphics, large cabinet

98. Hang On & UFO Catcher （1985）
Source：http://sega.co.jp/about/history/

99. Why PC games shrinked?
▶ Various reasons
 Sluggish PC diffusion
 Around 10%
 Rental and illegal copy
 Low performance & Higher
price
▶ Only adult games grew.
11.7
9.7
11.6
10.6
11.5 12.2 11.9
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
1987198819891990199119921993
PC penetration rate

100. PC platform
8bit Hobby PC 16bit PCGaming PC
PC-8801
(NEC)
X1
(Sharp)
FM-7
(Fujitsu)
PC-9801
(NEC)
(Various companies)
During 1983~1987
During 1988~1992
Lose market Share
De facto standard in PC
X68000(Sharp)
FM-TOWNS(Fujitsu)
De facto in 8bit
New generation

101. Games for 8 bit PC: PC-8801mk2 SR
Ys2(1988)
Disappear in Okhotsk(1984)
HYDLIDE(1984)
Source：Project EGG
http://www.amusement-center.com/project/egg/index.shtml

102. Games for PC-9801VM
Software and Hard story(1988)
DAIVA: LIGHT OF KARI YUGA
(1988)
CYBERNETIC Hi-SCHOOL III
Aim for the Top GunBuster （1990）
Early games were the same as PC-88, but there were many games with beautiful
screens. Among them, simulation games and visual novel games are unique to 98.
In later years, the majority to be released became bishoujo (or R-18) games.
Source：Project EGG http://www.amusement-center.com/project/egg/index.shtml

103. Sales Ranking March 1985
Title Company Genre
1
Lode Runner Sony, Softpro,
Systemsoft
ACT
2 The Fire Crystal BPS RPG
3 Baseball crazy Hudson ACT
4 VOLGUARD dB-SOFT ACT
5 Plasma line Tecno-SOFT ACT
6 LEGENDS OF
STARARTHUR III
T&E SOFT ADV
7 The Black Onyx BPS RPG
8 Professional Mah-Jongg Chanoir TBL
9 Chack'n Pop Nicodem-Carry ACT
10 Tiny Xevious DEMPA ACT
Foreign title
Arcade game transplant In game magazine Beep March 1985

104. Summary of PC games
▶ The influence from overseas was limited.
 Users wanted to play action games like Space Invaders.
 A lot of arcade game hit titles in Japan were transported.
 Few titles were ported and hit.
 Exception: Lode Runner ?
 RPGs were too difficult for direct transplant, necessary to
localize => ARPG such as HYDLIDE and Ys series.
▶ PC-98VM (1985) had become de facto standard
 Technological innovation stagnated for nearly 10 years
 Because of the software compatibility

105. Non Adult PC Game Market (billion yen)
9
11.1
12.9
14.5 15.6
19.5
15.8
17.2 17
0
2
4
6
8
10
12
14
16
18
20
1985 1986 1987 1988 1989 1990 1991 1992 1993
Market size of PC Games is
only 1/20 of Console games

106. PC-9801 Series
▶ Originally for office use
 Digital 8 color
 No sound: Beep only
▶ Game Use: VM(1985) and later
 640*400, analog 16 colors
 Reference model as PC-9801 series
▶ Since the 1990s, PC game companies
withdrew one after another and PC
game market shrinked.
 Only adult games released
Source：http://121ware.com/navigate/learn/pcmuseum/index.html

107. Arcade
(Sega System16)
Home Console
(Family Computer)
PC
(PC-9801VM)
Graphic
Solution
320×224 256×240 640×400
Dedicated CRT
Colors 4096 colors 25 in 52 colors 16 in 4096 colors
Sprite Function Up to 128 in
screen
Scale possible
Up to 64 in screen
Up to 8 in line
No Sprite Function
Well-played
game genre
Action & Table
Genre satisfied
with short playtime
Compromise of
arcade and PC,
but close to arcade
SLG,ADV,RPG
Genre playing for
a long time
Play Time Extremely short
(1 play 3 minutes)
Compromise of
arcade and PC
Long time
(Using floppy disk)
Sales Form Coin Operation
(100 JPY/play)
Package Sales
(About 5,000 JPY)
Package Sales
(Up to 10,000
JPY)
Platform
innovation
speed
Very fast Significant
innovation once in a
few years
Stagnation for
game technology

108. Slide not used in 3D era

109. Modularization in game development
Hardware
Hardware
Game Application
Hardware
Game Application
OS,Driver,
Middleware
Dawn 80's - first half of 1990's Late 90's - Currently

110. Programing environment
Source: "Survey research on advanced technology development of digital content production", 2010
Virtualization
Hardware Time
Hardware
Hardware
Hardware
HardwareAssembler
Assembler
Assembler
AssemblerC language
+ Library
C++
Objective
System
C++
Objective
System
Game
Engine
Middleware
80s 90s Late 90s~00s Late 00s~2010

111. Large scale development
0 50 100 150 200 250
DQ1
DQ2
DQ3
DQ4
DQ5
DQ6
DQ7
DQ8
Scenario Game Design Graphics
Music & Sound Programmer Engineer
Other development Staff Test Play QA
Sales promotion

112. 53.4
67.2
76.3
85.3 92 97
107.6104.4
97.3
86
3.6
4
3.5
3.3
3.1
2.9
2.5 2.2
1.7
1.1
1.4 6 12.9
36.7
0
20
40
60
80
100
120
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Package Sales Operation service sales
data from Digital content white paper
Market Scale of PC Online Games
(Billions JPY)
Source: JOGA Online Game Market Research Report Yearly Version from 2005-2014
Digital content white paper from 2001 to 2004

113. Monthly average sales
per online game billing player (yen)
2004 2005 2006 2007
Flat-rate billing game 1437 1338 1554 1223
Item Charging
Avatar Charging
4278 4438 4385 4676
Source: "Online Game Market Statistics Report 2007"

114. Billing form of online game
(including non-PC)
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
2004 2005 2006 2007 2008 2009 2010 2011 2012
Item Charge Free download
Source: "JOGA (Japan Online Game Association) Online Game Market Research Report 2013"

115. Slide not used in
Smartphone era

116. Market Size(billion yen)
0 200 400 600 800 1000
2012
2013
Home Console Arcade(Video Game+Music Game)
PC Online Mobile Phone
Smart Phone

117. Mobilephone game (including avatar) and
social game market trend (billion yen)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Social Games 0.5 6 15.7 44.7 138.9207.8
ordinaly Mobile Phone Game 9 20.1 27 41.2 58.9 74.8 84.8 86.9 88.4 82.2 57
0
50
100
150
200
250
300

118. Regulation on “Complete Gacha”
▶ Complete Gacha
 By assigning all the rare items specified in Gacha, players
can get special items
 Each rare item appearance probability: low
 Usually less than 1%
 Some enthusiasts tried Complete Gacha and expended
hundreds thousands yen.
▶ Consumer Agency announces the view that "Complete
Gacha violates premium display law“
 Not regulate gacha itself

119. From “Pay to Win” to “Free to Play”
▶ Traditional Social Game: Competition → billing
 Fight with ranking fee and direct interpersonal battle
 “Pay to Win” model
▶ Recent: Free to Play
 Focus on individual achievement & few interaction with friends
 Elimination of competing factors
▶ Play with no charge, with confidence
 The same system as past Social game (stamina system), but play
enough with no charge
 It does not change that Gacha is at the core of business

120. Kantai Collection (2013)
▶ PC Browser Game
(Android version 2016)
▶ Game Design not to act
“Pay to Win”
 There is no "pay only" or
"superior person limited"
that makes game play
advantageous
 "Gacha"-like behavior is
very difficult
 Game design to play as
almost standalone http://www.dmm.com/netgame/feature/kancolle.html

121. Loot Box problem
▶ Paying a loot box is a kind of gamble?
▶ Stance of economic policy corresponds to the loot
box problem
 UK, US, and Japan: no gamble
 Lessez-faire & self responsibility
 Continental Europe: gamble
 Paternalism

122. Game Design Trend in Online Games
Acting
Interacting
Player World
Kancolle
Puzzle &
Dragons
MMORPG
Social
Game
Casual
Game
Late 90's - Early 00's
Late 00’s
Early 10’s
The era goes around?
Pokémon
GO?
Using Bartle’s 4 categories
AchieversKillers
Socializers Explorers

123. Reference
▶ https://www.irasutoya.com/
▶ Wikipedia JP/EN
 Photos of Game Console
 Logos of game companies