Recently, Ottawa hosted a seminar called “Doing Business in Japan” where President and COO of Capcom Interactive, Midori Yuasa, gave a lecture entitled â€œMobile Gaming - Challenge and Reward in North America and Japan.” Although we were unable to attend the seminar, we got in touch with Yuasa shortly after to discuss Japanese versus North American mobile content.
QuicklyBored: For those who didn’t get a chance to see your speech at the seminar, could you outline the major differences between the North American and Japanese mobile content markets?
Midori Yuasa: My key point was that Japan has a more open distribution system because the carriers have taken strong leadership roles in Japan. Originally, when the carriers planned the mobile content distribution business in Japan, all three carriers identified the business as a pseudo internet business model. They decided not to control their own proxy, and opted to open up their network to anybody and that the strategy was to take a small commission just like a credit company does with any retail business.
Companies like NTTDocomo, which is the biggest wireless carrier in Japan, are becoming behind the scenes. They provide a platform, distribution solutions, but the content is going to be provided by the service provider or experts who have knowledge of the entertainment business or content distribution business. So that’s the Japanese way of distributing mobile content. On the other hand, in North America, they took very heavy control. They wanted to control the traffic and what kind of content people can distribute. They also set the criteria of who can distribute content. They take very active roles in the publishing business while the Japanese open up the platform, letting anybody distribute. The US carriers almost act like publishers and they dictate what a publisher like us can or cannot distribute. Technically, they also assure the quality on behalf of us because it’s a service branded under the carriers name. In Japan, the content is serviced with the Capcom name. The carriers have to control the quality and as a result they control the business value chain a lot more taking significant revenue off of this content.
QB: Why is it that the Japanese mobile content industry generates more revenue than its American counterpart? Is that because Japanese people have committed to mobile content more than Americans or is it more about the business model of how the Japanese are accessing the content?
MY: I think it’s a combination of both. Some say the Japanese are 5 years ahead of the North American market. That means people are pretty well educated. At the beginning of the mobile content business in Japan, Japanese wireless carriers took very strong leadership roles in educating consumers about what they can do with their phones besides talking. They spent a lot of advertising money and did a lot of grassroots marketing to really educate consumers. So people in Japan, whether you’re old or young, male or female, know pretty much what they can do with the phone and they actually use it. So that’s one thing that’s pushing up the entire business volume in Japan.
QB: How do Japanese customers know what content to download? Are they accessing the content in the same way as North Americans?
MY: There are tons of mobile content related magazines in Japan. If you walk into a bookstore, in the magazine section, you’ll find at least 30-40 different types of magazines every month. They feature different kinds of mobile content. If you’re reading the magazine there will be a promotional page where you get directions to try and purchase the content. Obviously, you can also go to the carrier’s deck to browse. The browser for Japanese phones is much more dynamic. With WAP 2.0 you’re not looking at text based promotional material. You can see the actual animation, screenshots, video and you have the flash plugin too so you can pretty much do anything. There are also TV commercials.