The Japanese cultural industries and the domestic market

3.4 The Japanese cultural industries and the domestic market

The size of the Japanese cultural industries is impressive. In 2011, the domestic market was worth $US192.8 billion (¥15.4 trillion), amounting to approximately 5.7 per cent of the world market. It was only preceded by the US with a market estimated at $US463.9 billion (¥37 trillion) (PwC⁴⁷, 2012: 49). However, in Japan, the content industries represent only 2 per cent of the GDP (Gross Domestic Product). It differs from the US where they represent 5 per cent and the worldwide average of 3 per cent. Therefore, according to the DCAJ, the Japanese content industries have still some potential for further growth (2009: 36).

Source: DCAJ, 2013: 36.

3.4.1 The Japanese anime market

In 1917, the first anime, called Imokawa Mukuzō Genkanban no Maki (Mukuzō Imokawa, the Doorman) was screened in cinemas. The first anime feature movie, Momotarō Umino Shimpei (Momotarō’s Divine Sea Warriors) was released in 1945. With the rapid development of television after the end of the Second World War, anime began to be broadcasted as TV programme. In 1961, Tezuka founded Mushi Production which pioneered TV animation in Japan. This studio and another one, Tōei Animation, established anime as a massive mainstream industry (Hu, 2010: 83-103). In the 1960s, anime explored new genres and themes. In the 1970s, the cooperation with toy companies, record firms, publishers, investment sources and distribution deepened.

Nowadays, anime are consumed not only via television and cinemas, but also through the Internet, mobile phones and tablets. They are adapted into video games as well (Poitras, 2008: 49). Pokémon and Digimon were a hit among children of all ages. Pokémon was aired on TV in almost seventy countries around the world. Children aged between four and twelve years old represented 40 per cent of the audience (Sugiura, 2008: 133). Neon Genesis Evangelion and Miyazaki’s feature anime became famous among young and adult audiences.

The Japanese anime market based on the sales of anime studios increased significantly between 2002 and 2005. The peak of the anime market was reached in 2005 with ¥223.2 billion of sales. After that year, the sales dropped until 2009 (¥145.7 billion) (AJA, 2014: 3). In addition to the global financial crisis which started in 2008, a crisis of overproduction took place in 2005 (Roland Kelts Interview, 27/03/2014). Since 2009, the market has improved, but it is still below the peak of 2005 (AJA, 2014: 3). A structural challenge that the Japanese anime industry will face in the future is the rapid aging of the Japanese population. Indeed, the expected sharp decrease in the number of young people will highly likely reduce the consumers of anime and the number of animators. This casts doubt on the idea that the domestic market is sufficient for this sector (Roland Kelts Interview, 27/03/2014).

3.4.2 The Japanese video games market

The Japanese video games market is more important than the market for movies. Video games were first developed in the US at the same time as computers. At the beginning of the 1970s, Japan began to develop arcade games. Japanese developers created successful games and characters such as Pac-Man (Namco) and Donkey Kong (Nintendo). In 1983-4, the American video games market faced a devastating crash. Western developers, weakened by the crash, preferred focusing on the PC market. Japanese companies kept producing video games not only for consoles but also for arcades. They came to dominate the market in the 1980s and 1990s. In 1989, Nintendo, for the first time, commercialized a portable console, the Gameboy. This company still dominates the portable console market nowadays. In 1995, Sony entered the console market with the PlayStation. In 2001, it was the turn of Microsoft with the Xbox. The same year, Sega decided to stop the production of the Dreamcast (Otmazgin, 2013: 66-7).

The two figures below describe the evolution of the Japanese video games market between 1996 and 2012. The collapse of the software sales, in other words video games, is spectacular, from ¥583.3 billion in 1997 to ¥314.1 billion in 2005. Even if the sales of software increased between 2005 and 2006, 2007 and 2008 as well as between 2009 and 2010, they fell to ¥293.2 billion in 2012. Therefore, between 1997 and 2012, the sales of video games sharply dropped 50 per cent (CESA, 2013: 205).

The evolution of the sales of consoles follows the commercialization of new consoles. For example, in 2001, the sales amounted to ¥244.9 billion. The new consoles of Nintendo, the home one (Gamecube) and the portable one (Game Boy Advance) were released that year. The previous year, Sony had released the PlayStation 2. It is certainly not an accident that the peak of hardware sales in 2007 occurred just after the launch of the PlayStation 3 in November 2006 and the Wii one month after. In 2012, Sony and Nintendo accounted for 96.9 per cent of the sales of home consoles. The same year, Nintendo dominated the sales of consoles with a share of 66.9 per cent, the only sales of Nintendo 3DS representing 51.7 per cent. Sony dominated the market of home consoles with 16.3 per cent (PlayStation 3 16.1 per cent and PlayStation 2 0.2 per cent). However, its share of the sales of home consoles was more important in 2011 with 23.8 per cent. PlayStation 3 sales represented 23.2 per cent and PlayStation 2 0.6 per cent (CESA, 2013: 105).

If we aggregate the sales of hardware and software, they reached their peak in 1997. From 1997 to 2004, the market contracted sharply. The sales decreased from ¥758.2 billion to their lowest amount, ¥436.2 billion. Whilst it is true that the market grew to ¥711.4 billion in 2007, it decreased from 2007 to 2012, amounting to ¥485.7 billion (CESA, 2013: 205). Since the commercialization of the Wii U in December 2012 and the PlayStation 4 in February 2014, the former has been more successful than the latter, respectively selling 2.47 million units and 1.6 million units (D'Angelo, 2015). In September 2015, Sony announced a reduction of the price of the PlayStation 4, from ¥39,980 to ¥34,980⁵⁰, in other words a reduction of ¥5,000. In this way, Sony hopes to boost the sales of its console in the domestic market (Famitsū, 2015b).
Figure 3. The Japanese video games market (1)
Source: CESA, 2013: 205.
Figure 3. The Japanese video games market (2)
Source: DCAJ, 2013: 233; CESA, 2013: 205.

The arcade video games⁵¹ market steadily rose from ¥760 billion (¥605.5 billion for games sales and ¥154.5 billion for the sales of machines and instruments) in 2002 until its peak in 2006, amounting to ¥926.3 billion (¥702.9 for games sales and ¥223.4 billion for the sales of machines and instruments). Even if the market reduced from 2006 to 2011, the arcade video games market remained more important in 2011 than the video games market. The former was worth ¥672.3 billion versus ¥501.9 billion for the latter (DCAJ, 2013: 233).

The sector of video games that has experienced the fastest growth since the mid-2000s has unquestionably been online games⁵². The figure below testifies to this rapid development. Between 2013 and 2014, they rose 13 per cent, amounting to ¥788.6 billion. Home games software and hardware were estimated at ¥403.9 billion. In total, the Japanese video games market was worth around ¥1.2 trillion in 2014, online games representing 65.8 per cent of the total market (Famitsū, 2015a). The structure of the video games market has thus dramatically changed. It has diversified with the sector of online games being the dominant sector of the market. The share of home video games (hardware and software) is expected to continue to decrease in the future. Online games are the future of the video games industry (CESA Official Interview, 31/03/2014).

Figure 3. The Japanese video games market (3)

Legend: online games, home games software, home games hardware. Unit: ¥100 million

Source: Famitsū, 2015a.
The growth of mobile games⁵³ has been spectacular since 2010 as demonstrated by the figure below. Between 2010 and 2014, sales in this sector multiplied by seven. In 2014, it increased 18 per cent compared to the previous year, amounting to ¥715.4 billion (Famitsū, 2015a). This rapid growth reflects the development of the Internet, new devices to play games (smartphones and tablets) as well as the popularity of Social Networking Service (SNS), for example Mobage, Mixi, GREE and so on (DCAJ, 2013: 120 and 125; CESA Official Interview, 31/03/2014).
Figure 3. The Japanese mobile games market

Unit: ¥100 million

Source: Famitsū, 2015a.

3.4.3 The Japanese manga market

Manga are one of the most widespread mediums of popular culture in Japan. Manga appeared in the 1920s, but it was in the 1960s that such comic books began to emerge as a mainstream industry. Manga have diversified into various genres in order to target different age and social groups. They deal with a very large array of themes, ranging from fantasy, history, religion to horror and supernatural. They also include humour, politics, sports, science-fiction and war (Bryce and Davis, 2010). In contrast to Western countries, manga are read not only by children and teenagers, buts as well by adults. Numerous genres of manga exist: shōnen⁵⁴ (young boys), shōjo (young girls), seinen (young male adults), josei (young female adults), yaoi⁵⁵ (boy-love stories) and so on (Bryce and Davis, 2010). Tezuka contributed to the rise of the manga industry. He was a prolific author creating seven hundred manga series, for example Astro Boy, Kimba the White Lion, Hi no Tori (Phoenix) and Black Jack. His titanic production contributed to establish manga as a respectable reading for all age groups in Japan (Patten, 2004: 198). Nagai Gō’s works (more than fifty manga stories) also contributed to establishing manga as one of the most popular forms of Japanese popular culture (Otmazgin, 2013: 67).

The sales of manga can be divided into two categories: manga magazines and manga books. The peak of manga magazines sales was in 1995, amounting to ¥335.7 billion. Nevertheless, since 1995, their sales have fallen dramatically. They only accounted for ¥156.4 billion in 2012, so a collapse of approximately 53 per cent compared to the sales in 1995. The situation of the sales of manga books is different. Indeed, they increased from ¥219.1 billion in 1992 to ¥260.2 billion in 2005, the peak of manga books sales. It was also in 2005 that, for the first time, the sales of manga books exceeded the sales of manga magazines. This situation has continued until now. It is also since 2005 that the sales of manga books have steadily decreased. In 2012, they represented ¥220.2 billion, almost the same figure than in 1992. Putting together both sales, the best year of Japanese manga market sales was in 1995 for a total of ¥586.4 billion. Yet, since 1995, the combined sales have massively fallen. In 2012, they were worth ¥376.6 billion, that is to say a fall of nearly 36 per cent. Indisputably, since 1995, the sales of manga have been ailing (All Japan Magazine and Book Publishers’ and Editors’ Association, 2008: 218-9).
Figure 3. The Japanese manga market (1)
Source: All Japan Magazine and Book Publishers’ and Editors’ Association, 2008: 218-9.
Figure 3. The Japanese manga market (2)
Source: DCAJ, 2013: 76.
The massive decline in the sales of manga magazines results from a change of reader behaviour. They no longer purchase manga magazines that contain works that do not interest them much and prefer buying manga books presenting stories that attract their attention. Furthermore, manga have lost a part of their attraction. Lastly, the emergence of electronic manga have transformed the consumption of manga (Sasaki Toshiharu and Wakabayashi Hideki Interview, 30/04/2014). Whilst the sales of paper-based manga have significantly dropped, the consumption of electronic manga has risen in the last ten years. This trend is linked to the emergence of smartphones and tablets that constitute new platforms for the reading of manga. Facing this situation, publishers are editing more electronic manga than before. If the sales of paper-based and electronical manga are combined, the sales of manga are on the rise (Sasaki Toshiharu and Wakabayashi Hideki Interview, 30/04/2014).

In 2011, for the first time, the electronic manga market contracted. It amounted to ¥49.2 billion, a slight decrease of 0.8 per cent compared to 2010. Such decrease was mainly due to the fall of 12 per cent of the sales for mobile phones (All Japan Magazine and Book Publishers’ and Editors’ Association, 2013: 240-1). In 2011, the sales of electronic manga for mobile phones represented 82 per cent of overall sales of electronic manga. Publishers were taken by surprise by the sharp transition between feature phones and smartphones as a platform to read electronic manga (DCAJ, 2013: 78).

In 2012, the market of electronic manga grew from ¥49.2 billion to ¥57.4 billion, an increase of ¥8.2 billion. As proof that publishers adapted electronic manga for smartphones and tablets, the sales on both platforms skyrocketed by ¥20.3 billion. Yet, even if electronic manga expand in the future, it does not mean that these sales will compensate for the fall in the paper-based manga market. Indeed, they have to face the harsh competition of other leisure activities on smartphones and tablets such as mobile games or listening to music (DCAJ, 2013: 78).