Does Japan‘s Economic Edge Lead to a Better Gaming Experience Compared to China?

When Capcom released the highly anticipated "Monster Hunter Rise" on Nintendo Switch last year, initial sales figures showed a striking difference in demand between two of Asia‘s biggest gaming markets. In Japan, physical sales topped 1 million units within just 3 weeks – a new record for the popular creature-slaying franchise. Yet in China, the game saw more muted reception, moving only around 35,000 units both physically and digitally according to market trackers.

What explains this huge gap for one of the year‘s biggest releases? A major factor lies in the economic discrepancies between Japan and China‘s gaming markets – disparities that influence everything from spending power, industry priorities, and even gameplay preferences. While Japan maintains a per capita GDP 4x greater than China along with higher wages, does this economic edge create tangible advantages for gamers?

Japan vs China Gaming Market Sizes

There’s no doubt Japan punches far above its weight class gaming-wise compared to China‘s massive 1.4 billion population. With only 126 million people, Japan managed to generate 60% more gaming revenue compared to China in 2021 ($19.4 billion vs $12.4 billion) [1]. Japan has a long console and arcade gaming history along with many legendary game creators like Nintendo, Sega, Capcom and Konami.

Console and PC gaming remains dominant in Japan, representing 70% of game revenue compared to China’s more mobile-centric spend (59% mobile) [2]. This shows up in ownership rates too – where over 20% Japanese households own a next-gen console vs just around 2% in China [3]. Unsurprisingly, Japan has the world‘s biggest arcade gaming scene, with televised pro leagues dedicated to arcade fighters like Street Fighter attracting millions of viewers. The disparity extends to professional gaming as well, where Japan boasts a much more developed esports infrastructure and pro players able to earn comfortable salaries through competitions, sponsorships and celebrity status.

Economic Edge Enables Superior Gaming Experience

With a per capita GDP exceeding $40,000, your average Japanese gamer simply has more discretionary income allowing bigger budgets for purchasing gaming hardware and software. The average annual gaming spend per capita sat at $140 vs just around $10 for Chinese gamers in 2021 [1]. Let‘s analyze how this economic advantage manifests in superior gaming experiences:

More Access to Cutting-Edge Gaming Gear

Owning the PS5, Xbox Series X or an elite-tier gaming PC remains a luxury for most Chinese gamers due to high prices driven by import costs. But Japanese salaries enabling more affordability help drive higher adoption rates. For example, at Japan game stores, you‘ll see shelves stocked with the latest console releases and GPUs often sold-out elsewhere in the world.

Higher Quality & Budget Games

Developers tend to optimize their game design and pricing based on the target market. So the gaming palate of Japanese gamers along with their greater willingness to pay enables games with bigger production budgets, less aggressive monetization tactics and fairer progression systems. This pays off in deeper gameplay, finely tuned balance, and longer-term enjoyment compared to many of China‘s popular F2P mobile titles riddled with frustrating progression walls or pay-to-win advantages.

More Support & Investment in Pro Gaming

Japan‘s esports scene stands much more mature through many years of organic growth driven by engaged, hardcore fans. Top professional Street Fighter or Super Smash Bros. Ultimate players participate in niche local circuits all the way up to televised grand prix attracting multi-million dollar prize pools and sponsorships. The economic support enables fuller-time pro careers. China by comparison only recently began investing in esports but its scene remains heavily fragmented. Only a tiny fraction of pros can secure salaries and many still struggle balancing gaming with school or jobs.

China‘s Gaming Market Charging Ahead

Yet we’d be remiss not to acknowledge China’s videogame market represents massive potential given its sheer size and rapid economic expansion. While starting from a lower baseline, it has rather quickly emerged into the world’s biggest gaming market. From 2015-2020, China’s game revenue ballooned at compound annual growth of 23% – rocketing it up from #10 to #1 globally [4].

Domestic game developers like Tencent and NetEase raked in billions focusing on F2P mobile titles tailored specifically for Chinese gamers. Even Japan‘s console giants like Nintendo and Sony have now entered joint ventures to launch Switch and PlayStation China to get a piece of this burgeoning market. As spending power and console/PC penetration continues rising across China’s massive population, expect the gaming market growth to outpace most countries.

Closing the Gap in the Future?

Could China’s breakneck economic momentum result in gaming spending power achieving parity with Japanese gamers someday? Given China’s blistering pace of growth, perhaps we shouldn’t bet against this possibility over the long-term.

As average salaries and consumption power increases, this could expand the addressable audience exponentially for console gaming and esports. After all, think what a tiny fraction boosting gaming wallet share across 0.5% of China’s population would achieve in raw revenue terms.

The market trajectories point towards continued uptrends in spending power and user segmentation where high-end Chinese gamers start to resemble the profile of Japanese counterparts, even if broader per capita metrics remain behind global averages. This presents exciting opportunities for publishers seeking growth and game creators hoping to leverage unique cultural insights across both countries.

The console vs mobile preference dichotomy will also be interesting to watch over the next decade. Will improving connectivity and digital distribution open more Chinese gamers up to AAA gaming staples popular in Japan like Monster Hunter? Or will preferences largely remain split given how ingrained and accessible mobile gaming already is?

One thing seems clear – with China’s vast population and growing economic might, it seems only a matter of time before its gaming market sits on par or even surpasses Japan’s established foothold. The potential for growth makes China a key audience that can no longer be ignored.

  1. NewZoo 2021 Global Games Market per Region
  2. Niko Partners 2021 Asia Gaming Report
  3. Forbes 2022 Console Penetration Study
  4. South China Morning Post “Growth of Gaming Market”

Similar Posts