Despite a small population of just 127 million, Japan is one of the top mobile advertising markets worldwide. The country is not only home to some of the most prominent mobile publishers but also a mobile gaming hub with highly-engaged local gamers. With the consistent growth of mobile ad spending over the years, this island country is certainly the rising sun of the mobile advertising industry.
The ‘Whale’ Mobile Population in Japan
In Japan, mobile advertising has steadily gained ground. According to eMarketer, mobile ad spending in Japan increased by 25% in 2018, reaching $8 billion.1 Mobile ad spending on the Smaato platform shows a similar trend, with an average growth of 39% quarter-over-quarter for the past two years.
There is still huge room for growth in Japan. While smartphone penetration of 18-to-34-year-olds is remarkably high at 94%, penetration of the overall population is relatively low compared to other developed markets. This is due to Japan’s aging population — more than 25% of Japan’s residents are over the age of 65.2
Those aged 50 years and older, a whopping 40% of the country, widely use feature phones with limited internet access.3
This makes Japan’s smartphone penetration lag behind many of its counterparts in APAC. However, it is expected to continue growing, reaching 76 million by 2022.4
Japan is a hub for mobile app development. With a tradition of building high-quality technology, Japanese publishers feature prominently among the top-grossing apps. Based on the combined revenue earned from paid downloads and in-app purchases on the iOS App Store and Google Play Store in 2017, four of the top ten earners belonged to publishers based in Japan.5
The level of engagement of Japan’s mobile users may account for much of this success. The Japanese represent one of the most active media audiences who regularly multitask throughout their day. More than half of this country’s residents use a smartphone while watching TV.6
The number of apps installed per smartphone in Japan, an impressive 102 apps on average, is second only to China
Japanese mobile consumers are not only highly engaged but also willing to give out real money. In-app shopping is becoming increasingly popular with a 65% surge in Amazon app usage on Prime Day.8
In regards to customer spending, these users are the top spenders in Google Play and the third-highest in the iOS App Store.9
The Kingdom of RPG Mobile Gaming
Typical city life in Japan is spent killing time during long bus and train commutes with fun mobile games. So, it should come as no surprise that the Japanese are avid mobile gamers. Japan ranks the highest in terms of the average number of mobile gaming sessions per player.10 In spite of its comparatively small population, Japan’s mobile gamers also spend more money in-game than any other country. Average consumer spending in mobile games in Japan is 1.5X higher than in North America and 2.5X higher than in Western Europe.11 Advertisers are catching onto this trend and investing in grabbing these users’ attention. On the Smaato platform, the number of mobile gaming app ad impressions from users in Japan increased 1.1X from Q2 to Q3 2018.
The mobile gaming market in Japan is also unlike any other. Role-playing games (RPGs) are the most popular gaming genre in Japan, and they tend to dominate the charts of the most-downloaded apps. A unique feature of many of these mobile RPGs is a monetization mechanism known as “gacha
” — a term that describes how capsule toys are dispensed by Japanese vending machines. To roll a gacha
, players have to spend in-game currency. This virtual luck-based mechanism triggers gamers’ urge to unlock new characters and collect bonus items. With the largest number of active users, RPGs are the money-making machines of the Japanese mobile gaming market.12
With its high levels of user engagement and in-app spending, Japan presents a compelling and growing opportunity for mobile publishers and advertisers alike. The country’s influence in the global app economy is expected to grow in the years to come. And while its language barriers can make it a market that is difficult to navigate, a global opportunity remains. Through the help of trusted partners and localization, foreign publishers and advertisers can also reap the harvest in the Land of the Rising Sun.
1eMarketer, 2018 | 2Pew Research Center, 2017 | 3IndexMundi, 2018 | 4eMarketer, 2018 | 5App Annie, 2018 | 6Macromill, 2017 |7App Annie, 2018 |8App Annie, 2017 |9App Annie, 2018 | 10App Annie, 2017 | 11New Zoo, 2018 | 12App Annie, 2017