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Japanese Video Games

A Model for International Popular Medias?

Written by: Kaze Kiri FX

5/20/03

Introduction: A Brief History of the U.S. Video Game Market

The marketing of Japanese-developed video games in the U.S. is distinctly different from that for other forms of Japanese popular media. No other form of popular media from Japan has managed to attain comparable market penetration in the U.S. While anime and manga are shelved in separate specialty sections in video and comic stores and labeled specifically as "Japanese," Japanese video games are allowed to sit on store shelves side-by-side with games made in America or any other country. They are usually not labeled as "Japanese" or marketed under the platform of being "Japanese" as anime and manga almost invariably are; and most consumers who buy the games don't bother to question where each individual game was developed; it isn't an issue for most consumers. The market for Japanese games is, of course, also very different from the market for other forms of Japanese media like music and movies because those products seldom even make it to store shelves in the U.S. What is it that makes the market for Japanese video games so different? The reasons for this are largely historical, so I will begin with a brief history of video games in the U.S.

In the early 1980's, the home console video game market was owned by American video game companies like Atari, Activision, and Coleco. At this time, there were a small number of Japanese video games by companies like Namco and Nintendo, but they were available exclusively as stand-alone machines at video arcades, and home console versions of these games were made by American companies. The market for Japanese home console games had not yet come into existence. In 1983, however, the home video game market crashed and Atari lost over $539 million in one year.¹ Home video games were then considered to be a dead market.

Nintendo's Famicom System

Though things weren't going well in the U.S., in 1985 the Japan-based company Nintendo released a system called "Family Computer" or "Famicom" in Japan. The system and the Japanese game software available for it sold well. Soon after, Nintendo decided to market the system in the U.S. under the name "Nintendo Entertainment System" or "NES," and the system managed to single-handedly revive the home video game market in the U.S. The American home console market, which had been under Atari's control up to that point, was in the hands of Japanese companies from then on.

At first, all of the software available for the system in the U.S. was developed by Japanese companies due to the fact that it had already been available in Japan for about a year before the U.S. release, but American² game developers wanted a home platform for which to develop their games as well, and the NES was basically the only platform available. Nintendo immediately began to license American companies to make games for the NES upon its U.S. release, and we began to see a good number of American and non-Japanese games available for the platform in the later half of the 1980's. American game developers were making money by selling their games, and Nintendo was making money by licensing them. It was nearly impossible for other companies to compete because of Nintendo of America's exclusivity clause that disallowed their licensed companies to make games for any other console. Because of this, Sega had a difficult time penetrating the U.S. market after the release of their Sega Master System in 1986 which only managed to succeed in Europe - a fact which can probably be largely attributed to the lack of Nintendo's exclusivity clause there.

American consumers thought little of buying systems and games from a company with a name like "Nintendo". After all, even though Atari is an American company, their name also comes from a Japanese word. The majority of American consumers gave little thought to the fact that what they were consuming was a form of Japanese media. Americans were already used to buying other types of electronics from Japanese companies, so why not video games as well? However, in the case of video games Americans were no longer just buying Japanese hardware as they do when purchasing stereos and television sets. This time, they were also consuming the Japanese media that went with the hardware. In other words, Americans generally weren't buying Japanese movies to watch on their Japanese VCR's or Japanese CD's to play on their Japanese CD players, but they were buying Japanese game software to play on their Japanese video game consoles.

Other Japanese companies such as Sega and NEC soon followed Nintendo's lead and released their own home-gaming consoles in the U.S. A few like the Atari Jaguar and Lynx were also released by non-Japanese companies, but since the release of the NES, no non-Japanese console managed any significant market penetration until Microsoft finally released their Xbox console in 2001.

The Japanese companies didn't just dominate in the hardware category. Until somewhere around the late 1990's, Japanese game software also dominated American shelves. In the 1980's, most games had very little textual content in the games, so it was relatively easy for Japanese game developers to start a U.S. branch, translate the text in their already successful Japanese software to English and sell it in the U.S., though this became more difficult later when the number of voice and text-heavy games increased. This is one of the reasons why the number of Japanese games released in the U.S. eventually began to decrease.

For reasons that I will discuss later in a later section³, it was difficult for American companies to develop their own games for the Japanese systems and compete against the slew of Japanese games. Some U.S.-based game development companies would even buy the rights to translate and sell Japanese games in the U.S. because it was more economically efficient than developing entirely new American games on their own. Unlike Japanese companies, American companies had little opportunity to market their software in Japan, thus Japanese companies had the advantage of being able to use Japan as a primary market before translating the games for sale in secondary markets like the U.S., Europe, etc. Most American game developers chose to stick to the PC game market where there was no competition from Japanese companies, which is mostly due to the fact that PC architecture standards in Japan were different from those in the U.S. until Japanese computer manufacturers had little choice but to change to the U.S.'s architecture standards in the late 1990's.

Since the release of the NES, the percentage of American-developed console games on the shelves has been gradually increasing. It was sometime around the late 1990's when this percentage finally grew to be over half. Due to a general growth of the U.S. video game market and a small decline in Japan⁴, the ratio of Japanese to American-made console games on U.S. shelves continues to drop even today. It would be fair enough to say that American companies have now 'taken back' their home console game market, though the majority of the hardware is still Japanese. Japan is still a sort of "Hollywood of video games" to many American game enthusiasts because most of the 'really big' games and franchises are still developed there.

In this editorial, I will discuss the impact that the Japanese dominance of the American home video game market has made on the way Americans purchase and play video games. Why is this important? Well, just think what the world would be like if anime had been an integral part of American animation all along, or if a large number of the popular movies in the U.S. were Japanese films and you will get some idea of what has happened in the video game market. Since neither of these things has happened, it can be understood why the video game market is different from the market for anime or movies. It would certainly be difficult or infeasible to repeat the circumstances under which Japanese video games were introduced into the U.S. and apply them to another form of media. Now that I have explained the history behind these unique circumstances, I will continue to describe their long-lasting consequences.

Click one of the following links to continue to the other sections of this editorial:

2. Japanese vs. American Video Games - Do Cultural Differences Exist in Game Production?

3. Assimilation of Japanese 'Otherness' into the U.S. Market

4. Orientalism: When Exotic or Japanese-looking Imagery is Used to Sell Games in the U.S.

5. American Games in Japan: The Other Side

6. The Asian Video Game Market: Not Profitable Enough?

7. Conclusion

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