Japan's mobile application market is huge and said to have unique characteristics. In a presentation at last month’s Casual Connect Seattle, a convention for the casual gaming industry, the application analytics provider AppAnnie presented a wealth of data about the application markets in many different countries. We investigate these data to get a global perspective on the specific characteristics of the Japanese application market.
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High Projected Profitability

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In a comparison of iOS games, the average revenue per download in Japan is a whopping $1.90, far higher than in any other country analyzed; it is almost three times more than the corresponding average revenue in the USA and 27 times more than China’s. It is evident that the Japanese application market is extremely profitable.

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Moreover, a comparison of revenues for each country’s top-grossing game shows that Japan has risen to the #2 spot in this category, just behind the US. Market penetration of smartphones in the US is 44%, higher than in Japan, and its population is 2.5 times as large. These advantages are mitigated, however, by the extremely high average revenue per download in Japan. Additionally, the average number of applications downloaded per user is 41 in Japan, compared to only 29 for US users.


Market Scope with Growth Potential

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In countries where revenues of game applications are on the rise, Japan is 5th overall in the iOS category, with 123% revenue growth, and 3rd for Android with 163%. Except for Japan, none of the other top 10 countries in revenue growth also have one of the top 10 largest mobile application markets. Japan’s market, which boasts an already solid market scope along with potential for growth, presents a very attractive opportunity.


The ever-popular iPhone and the also-lucrative Android

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When sales and download numbers by OS are considered, the iPhone has a significant market presence in Japan, compared to the US and the UK (red sections in the top pie chart). However, the iOS market becomes even more impressive when we look at its revenue share relative to Android/iOS: a favorable ratio of 1.25 in the US, 0.97 in the UK, and, most strikingly, 1.41 in Japan (upper illustration). In Japan, the average number of applications downloaded is only 20 for Android compared to 80 for iOS, a figure that must have a significant influence on the shape of the mobile application market.

Generally, download sales for Android are considered more difficult to increase than those for iOS. The ratio of Android download share versus revenue share (Revenue/Download) compared between the US, the UK, and Japan reveals a much closer correlation between increased downloads and increased revenue in Japan: the Japanese ratio is 0.80, compared to 0.69 for the other two nations. Taking into consideration the projected sales figured for iOS applications, it should be easier to increase revenue from Android application sales in Japan than in the US or UK.

Japan’s mobile application market is one of the largest in the world; combined with its impressive growth potential, the prospects for further advancement is strong. The unusually profitable nature of the Japanese market for Android applications is another notable point in its favor. Moving forward, as the global market for mobile apps grows larger and larger, the advancing Japanese market is poised for even greater success.





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About the Author
Wataru Tanaka is the chief editor of Social Game Report and writes about mobile social gaming. He works at Mynet Japan, a social game developer. His vision is to create worldwide network and enhance the industry, take it to the next level where everyone can enjoy communicating each other through games.