team finland future watch report: 30 signals covering 3 markets in japan
TRANSCRIPT
30 Signals Covering3 Markets in Japan
Contact information
Organization MembersResearch and Consulting Division,Japan Research Institute
2-18-1 Higashi-gotanda, Shinagawa-kuTokyo 141-0022 JAPANPHONE:+81-3-6833-0900FAX:+81-3-6833-9480
Project LeaderKoji YAMAURA (Associate Senior Consultant)yamaurakoji@jricojp+81-3-6833-5369
AdviserHideyuki ASAKAWA (Senior Consultant)asakawahideyuki@jricojp+81-3-6833-2815
Project MembersYohei KOTAKE (Consultant)kotakeyohei@jricojp+81-3-6833-6333Yuki KUWABARA (Consultant)[email protected]+81-3-6833-6587
AssistantTakako IMAI (Assistant)[email protected]+81-3-6833-1562
Tekes – the Finnish Funding Agency for Innovation
Tekes is the main public funding organisation for research, development and innovation in Finland.Tekes funds wide-ranging innovation activities in research communities, industry and service sectorsand especially promotes cooperative and risk-intensive projects. Tekes’ current strategy puts strongemphasis on growth seeking SMEs.
2
S-1
Feed-in TariffScheme forRenewableEnergy
Message
The Feed-in Tariff Scheme forRenewable Energy plays an importantrole to promote the popularization ofrenewable energy in Japan, as self-sufficiency rate is low and there is someuncertainty about the possibility in theuse of nuclear energy.
Summary
Under the Feed-in tariff scheme forrenewable energy, the regional electricpower utilities required to purchase theelectricity generated by solar, wind,hydro, geothermal, and biomass powerat the fixed prices. Since the schemewas introduced in July 2012, thegeneration capacity has beenincreasing and reached 3.7 million kW(about 90% of the capacity is consist ofsolar energy). Hereafter, the balance ofthe popularization of renewable energyand increasing electricity rate should becarefully watched.
[A]Rating
This scheme is basis for popularizationof renewable energy and important as anational energy policy.
[A]Macro Viewpoint
[A]Consistency with policy trends· Self-sufficient rate is low in Japan and
popularization of renewable energy isimportant.
[B]Consistency with the technologytrends[B]Consistency with economic trends[A]Consistency with the social trends· The number of people who think they
should not use nuclear power hasincreased since the Fukushima crisisoccurred.
[B]Micro Viewpoint
[A]Market impact· The scheme promotes the investment in
renewable energy, especially in solarpower.
[B]Spirit of innovation[B]Uniqueness
[Figure] Feed-in Tariff Scheme for Renewable Energy
(Source)METI “the Guidebook of Feed-in Tariff”
3
S-2
ElectricPowerLiberalization
Message
The issue of electric power liberalizationis important because it has possibility tochange the structure of Japaneseelectricity market drastically.
Summary
As a part of introduction of competitionand deregulation in various fields,Japan’s government is moving towardsthe liberalization of the electricitymarket. After the Great East JapanEarthquake, a lot of new electricityretailers, often referred to as “powerproducers and suppliers,” have beenspawned (109 companies by now).
Hereafter, electricity retail market isplanned to be liberalized in 2016, andpower generation and transmission areplanned to be separated between 2018and 2020.
[A]Rating
This is an important issue becausethere is a possibility that the structure ofelectricity market which has been stablefor a long time will be drasticallychanged.
[A]Macro Viewpoint
[A]Consistency with policy trends· This issue is consistent with the policy
trend of the deregulation in variousfields.
[B]Consistency with the technologytrends[A]Consistency with economic trends· This issue is consistent with the trend of
introduction of competition in variousfields.
[B]Consistency with the social trends
[A]Micro Viewpoint
[AA]Market impact· The stable supply of electricity will be
secured.· The competition in the generation
market will promote efficiency andsuppress electricity bill increase.
· The business opportunity will beexpanded.
[B]Spirit of innovation[B]Uniqueness[Figure] The Entry Situation of new
electricity retailers
(Source) METI “Liberalization of the retail electricity market” (October 2013)
4
S-3
Leadershipin Standardi-zation ofSmart City
Message
The standardization of Smart City isimportant in the view of global spread oftechnology and reinforcement ofJapan’s competition in this market. Thepoint is that Japan, which is said to bepoor at standardization, is takinginitiative.
Summary
METI is strategically working on theglobal standardization of Japaneseinfrastructure industry in corporationwith public-private collaboration. Thenumber of proposals for ISO/IEC globalstandardization increased, and Thenumber of acceptances as ISO / IECsecretariat also increased to reachalmost the same level as UK andFrance. The increase of the budget forthe global standardization is expected toaccelerate such efforts.
[A]Rating
Japan started to take initiative in thestandardization process that promotesthe spread of the service, which isimportant from the point of view of bothmacroscopic view of the worldwidespread of the technology andmicroscopic view of reinforcement ofJapan’s competition in the market.
[A]Macro Viewpoint
[A]Consistency with policy trends· The theme is positioned as one of the
three pillars of the infrastructure strategyof Abenomics’ growth strategy.
[A]Consistency with the technologytrends· As the technologies have been
developed in the field of Smart City,standardization plays a key role forspread of the services.
[B]Consistency with economic trends[B]Consistency with the social trends
[A]Micro Viewpoint
[A]Market impact· The government aims to triple the
exports of infrastructure systems by2020.
[B]Spirit of innovation[A]Uniqueness· The government aims to cooperate with
emerging countries like ASEAN nationsand to make Japanese technologiesbecome de facto standard by utilizingODA.
[Figure] the number of acceptances ISO/IEC secretariat
(Source) METI “Efforts of international standardization to 2014”
[Figure] Japanese Proposals forInternational standardization
5
S-4
Developmentsin Smart Citybygovernmentsupports
Message
In Japan, many innovative projectsabout Smart City have receivedfinancial supports from the government.To commercialize the results of thoseprojects, government supports are stillneeded. Therefore, in order to predictthe Smart City future trends in Japan, itis necessary to understand theconcepts of the ministries and agencies.
Summary
In japan, many innovative projectsabout Smart City have receivedfinancial supports from the government.To commercialize the results of thoseprojects, government supports are stillneeded. Therefore, in order to predictthe Smart City future trends in Japan, itis necessary to understand theconcepts of the ministries and agencies.
[A]Rating
Concepts ministries and agencies thinkare policies themselves. Therefore, inorder to conduct Smart City Projects, itis necessary to understand theconcepts of ministries and agencies.
[A]Macro Viewpoint
[A]Consistency with policy trends· Concepts ministries and agencies think
are policies themselves.[A]Consistency with the technologytrends· Technical studies have been included
as a theme.[A]Consistency with economic trends· Job creation and revitalization of the
rural economy has been included as atheme.
[A]Consistency with the social trends· Resolution of regional issues has been
included as a theme.
[A]Micro Viewpoint
[A]Market impact· Market for Smart City industry in the
world is estimated at 4,000 trillion yen intotal by 2030.
[A]Spirit of innovation· Through the initiative of the government,
innovation is encouraged.[A]Uniqueness· Features of Smart City initiative in METI,
is that the transportation infrastructurehas been studied. It is not limited toenergy.
[Figure] Smart city concepts by Japan’sgovernment
(Source) The Japan Research Institute
Ministry Concept Year Goal
Construction of a system for managingoverall energy including - Electricity - Heat - Transportation
To solve problems by ICT - disaster risk reduction and disaster - Regional issues - Job creation and economic revitalization
MAFF Smart Village *** Building an integrated management systemfor renewable energy in units of local area
Cabinet Office Environment FutureCity
2011 Creation of best practices to overcome agingand environmental issues as an environment
MIC ICT Smart Town 2012
METI EV・PHV Town 2009 Widespread use of EV and PHV
METI Smart Community 2009
6
S-5
Next-GenerationEnergy andSocialSystemsDemonst-ration Project
Message
As “Next-Generation Energy and SocialSystems Demonstration Project”conducted by METI is regarded as themain project of the Japanesedemonstration project related to SmartCity, it is worth gathering information.
Summary
Concurrently, in Japan There are fourmajor demonstration tests of Smart Gridtechnologies: Yokohama in Kanagawa,Toyota in Aichi, Keihannna ScienceCity, and Kitakyushu in Fukuoka. Theseprojects are subsidized by METI asNext-Generation Energy and SocialSystems Demonstration Project. Thisproject is planned to last for 5 years till2015.
[A]Rating
The Next-Generation Energy and SocialSystems Demonstration Project in thefour regions are important because it isleading Japan’s Smart Citydemonstration.
[A]Macro Viewpoint
[A]Consistency with policy trends· This project is based on the national
growth strategy.[A]Consistency with the technologytrends· The technologies to implement smart
cities are developed.[A]Consistency with economic trends· The investment in Smart City is
accelerated.[B]Consistency with the social trends
[A]Micro Viewpoint
[A]Market impact· Some estimates suggest that by 2030
US$ 40 trillion must be invested inurban infrastructure worldwide to keeppace with urban population growth.
[A]Spirit of innovation· This project aims to export the
Japanese Smart City technology.[B]Uniqueness
[Figure] The factors required for demonstration project
(Source)METI ”Selection of Next-Generation Energy and Social System DemonstrationAreas”
* Ambition targets for energy savings and CO2 emissions reduction, andlarge-scale deployment of renewable energy* Establishment of an energy management system for each site of energyconsumption and at a regional level.* Establishment of a complementary relationship between regional energymanagement and large-scale networks.* Efficient use of energy in a transport system that includes next-generationvehicles and railways.* Participation of not only the local government but also energy-relatedcompanies, system manufacturers, and other users* Life style innovation etc.
7
S-6
CommunityEnergyManagementSystem
Message
As a part of the Kitakyushu SmartCommunity Creation Project, aCommunity Energy ManagementSystem (CEMS) was put into operationin April 2012 to manage energy supplyand demand in the community.Theystarted the trial adoption of dynamicpricing of electricity, which is pioneeringand remarkable in the world..
Summary
As a part of the Kitakyushu SmartCommunity Creation Project, a CEMSwas put into operation in April 2012 tomanage energy supply and demand inthe community. In addition tointroducing as many sources ofrenewable energy as possible, in orderto reduce CO2 emissions, the goal is tobalance supply and demand across theentire community and level the load,and ensure the quality of the powersupply.Smart meters have beeninstalled in 230 households and 70businesses to collect and transmitinformation. The base contract forelectricity demand has been increasedto 21MW.
[A]Rating
The trial adoption of dynamic pricing ofelectricity is pioneering and remarkablein the world.
[A]Macro Viewpoint
[A]Consistency with policy trends· This project is based on the national
policy.[A]Consistency with the technologytrends· EMS is essential technology for the
Smart City.[B]Consistency with economic trends[B]Consistency with the social trends
[A]Micro Viewpoint
[A]Market impact· The market of energy management
service will be created.[AA]Spirit of innovation· The project revealed that dynamic
pricing is statistically effective in energysaving for the first time in the world.
[B]Uniqueness
[Figure] CEMS in the Kitakyushu project
(Note) * “DR”: Demand Response.(Source)Fuji Electric
8
S-7
Success ofthe Demon-strationExperimentsof DemandResponse
Message
The demonstration experiments ofdemand response have shownsuccessful results and validation forcommercialization will take place as anext step.
Summary
Japan’s utilities have turned theirattention to demand-side managementas the industry continues to contendwith generation limits in the wake of theFukushima nuclear disaster in March2011. The government is alreadypushing building energy managementsystems out of the lab and into buildingstock. The OpenADR Alliance isworking with Waseda University on aresearch project for METI in cooperationwith a dozen of companies.
[B]Rating
Although there has been a lot oftechnology investment in the country, itis unclear where, how and whendemand response will play out in Japan.
[A]Macro Viewpoint
[A]Consistency with policy trends· Expert Committee on the Electricity
Power Systems Reform of METI refersto the importance of the use of demandresponse systems.
[A]Consistency with the technologytrends· International standardization is now
progressing and Japan is in line with it.[A]Consistency with economic trends· Introducing demand response system
prevent from economic loss due topower shortage.
[A]Consistency with the social trends· The system is consistent with the trend
that people are keen on energy saving
[B]Micro Viewpoint
[B]Market impact· It is uncertain if there is much room for
energy saving by use of demandresponse system because the Japanesehave long been energy conservationistsfrom cultural points.
[B]Spirit of innovation[B]Uniqueness
[Figure] Image of the demonstration experiment by Osaka gas
(Source)Osaka gas web page
9
S-8
Advancefrom testphase tocommercialphase
Message
Smart city is proceeding from test phaseto commercial phase, and the numberof such case will increase.
Summary
Smart city is proceeding from test phaseto commercial phase. In “Fujisawasustainable smart town” project inKanagawa-ken Fujisawa-shi which isone of the commercial phase projects, itis intended to build a city block withcommercial facilities, hospitals, andpublic facilities by investing 60 billionyen, with 3,000 people living.
The development of smart cities likeFujisawa will be accelerated hereafter.
[A]Rating
Smart city is proceeding from test phaseto commercial phase, and the numberof such case will increase.
[B]Macro Viewpoint
[A]Consistency with policy trends· The promotion of Smart City is
considered an important policy.[B]Consistency with the technologytrends[B]Consistency with economic trends[B]Consistency with the social trends
[A]Micro Viewpoint
[A]Market impact· 60 billion yen will be invested.[A]Spirit of innovation· It is coming to commercialized phase
with various innovations composed.[B]Uniqueness
[Figure] Fujisawa Sustainable smart town
(Source) Panasonic IR information
Participating companies RolePanasonic IntegratorAccenture PlanningORIX Mobility sharingNIHON SEKKEI Planning of installationSumitomo Mitsui Trust Bank Housing loansTOKYO GAS Home fuel cellPanaHome Sale of smart housesMitsui Fudosan Sale of smart housesMitsui & Co. Health care serviceNTT EAST Telecommunication platformDentsu Energy and Health care service
etc.
Summary of the project60 billion yen1,000houses(all smart houses)Solar panel in the public spacesShare service of electric car
10
S-9
Compositionof NikkeiSmart CityConsortium
Message
The Nikkei makes recommendations onrealization of Smart City by sharing andtransmitting information through their“Nikkei Smart City Consortium”.
Summary
The Nikkei started “Nikkei Smart CityConsortium” with the specialists ofenvironment, energy, and urbanproblems, municipalities and companies.The Nikkei makes recommendations onrealization of Smart City by sharing andtransmitting information through thesymposium, general meeting, andspecial web site.
[B]Rating
Although the consortium is important asa place to collect information, it is notsure that it drives the promotion ofSmart City in Japan.
[B]Macro Viewpoint
[A]Consistency with policy trends· The promotion of Smart City is an
important policy.[B]Consistency with the technologytrends[A]Consistency with economic trends· The cost to collect information is
reduced.[B]Consistency with the social trends
[B]Micro Viewpoint
[A]Market impact· Collected information motivates
companies.[B]Spirit of innovation[B]Uniqueness
[Figure] Image of the Nikkei Smart City Consortium.
(Source)the Nikkei Smart City Consortium web page
11
S-10
CommunityOrientedStand-byMObilityService(COSMOS)Consortium
Message
Consortium for the new market creationand community revitalization using anew vehicle of 1-2 seaters is formed byJRI.
Summary
Consortium for the new market creationand community revitalization using anew vehicle of 1-2 seaters is formed byJRI. The members of the consortiumare transportation equipmentmanufacturers, telecommunicationsequipment manufacturers,transportation operators, real estatedevelopers, general contractors,municipalities, and local communities.
At the consortium, the members aregoing to research the needs andconsider necessary law and technology.
[A]Rating
The consortium is important from thepoint of view of both macroscopic viewand microscopic view. But, there aremany items to consider because it hasjust been established.
[A]Macro Viewpoint
[A]Consistency with policy trends[A]Consistency with the technologytrends· It would make innovation to develop
one-seater electric car and smartphonetechnology.
[A]Consistency with economic trends· By increase of movement of residents,
the economy of the region is activated[A]Consistency with the social trends· The number of people which are difficult
to move the city due to reduction orabolition of public transport andincrease of the elderly and children.
[A]Micro Viewpoint
[A]Market impact· It is easier for company to attract
customers because residents are ableto come to the storefront more easily.
[A]Spirit of innovation· It is new regional transportation service
which contributes to the local activationby Activation of the traffic of residents.
[A]Uniqueness· Same mechanism does not exist.
[Figure] The news release about the COSMOS
(Source)JRI website
12
G-1Legalizationof CasinoGambling
Message
Legalization of Casino Gambling isgoing to be submitted during the currentDiet session, and Casino in Japan couldbe opened just before the Tokyo 2020Olympic Games.
According to Citi Research, Revenue ofJapanese Casino has the potential to be$ 15 billion of two times the Las Vegasrevenue. And it is expected to contributeto the economic growth of the country.
Summary
Diet members caucus for legalization ofCasino Gambling in Japan are going tosubmit legislation that would allowcasinos to operate in the country duringthe current Diet session, and they couldopen just before the Tokyo 2020Olympic Games. One of the Dietmember caucus’s top advisers is JapanPrime Minister Abe.
Legalization of Casino Gambling isexpected to contribute to the economicgrowth of the country.
Foreign companies associated CasinoGambling business are expected toenter the Japanese market.
[A]Rating
Legalization of Casino Gambling is veryimportant for the economic growth ofJapan because it could encouragebusiness investment and produce jobs.
[A]Macro Viewpoint
[A]Consistency with policy trends· Japan Prime Minister Abe is showing a
positive attitude to the legalization.[B]Consistency with the technologytrends[B]Consistency with economic trends[A]Consistency with the social trends· Holding of the Olympic Games and
Paralympic 2020 provides a criticalboost to the legalization of CasinoGambling in Japan.
[A]Micro Viewpoint
[A]Market impact· Investment for one Integrated Resort
including Casino is expected to be morethan 10 billion yen.
· Revenue of Japanese Casino has thepotential to be $ 15 billion of two timesthe Las Vegas revenue according to CitiResearch which is group companies ofCity Bank.
[B]Spirit of innovation[B]Uniqueness
[Figure] Revenue of Casino Gambling by country
(Source) The Japan Research Institute summarized from public information
5158
235
150
0
50
100
150
200
250
Singapore Las Vegas Macau Japan
USD Billion
13
G-2
TheRegulationsBanning"Complete
Message
Japanese government banned"complete gacha" which was the mostpopular billing system in social gameson July 2012. But the regulations did nothave a big impact on the businessperformance of social game operatorsand the prevention of high claim.
Summary
Japanese government banned"complete gacha" which was the mostpopular billing system in social gameson July 2012. Kompu gacha, or“complete gacha” is a monetizationmechanic in social games that heavilyincentivizes the practice of gacha —paying a small amount of money to getan item at random, similar to purchasingtoys from a vending machine.
The regulations did not have muchinfluence on the business performanceof social game operators and had littleeffect on the prevention of high claim.
If the number of trouble by social gameis more increased, additionalregulations may be imposed in thefuture.
[B]Rating
The regulations is not very importantbecause it had little effect on socialgame business in Japan.
[A]Macro Viewpoint
[A]Consistency with policy trends· Japanese government banned
"complete gacha"[B]Consistency with the technologytrends[B]Consistency with economic trends[A]Consistency with the social trends· Increase of trouble by social game.
[B]Micro Viewpoint
[B]Market impact· The impact of the regulations on social
game business in Japan is small.[B]Spirit of innovation[B]Uniqueness· In Europe and the United States, a
mechanism such as "Konpugacha"already has been regulated.
[Figure] Sales of DeNA’s Social game
(Source) The Japan Research Institute summarized from DeNA IR materials.
14
G-3
Trend of theJapaneseGameIndustry
Message
Home video game market in Japan isshrinking since 2008. On the otherhand, Mobile game market is growingrapidly for the last few years. Somemajor home video game makers haveentered the mobile game market. In thefuture, games geared smartphonegames and home video games will bereleased.
Summary
The Home video game market in Japanis shrinking since 2008. On the otherhand, Mobile game market such associal game and smartphone game isgrowing rapidly for the last few years.
Some major home video game makershave entered the mobile game marketand Some major mobile gamemanufacturers have entered the homevideo game market.
In the future, games geared smartphonegames and home video games will bereleased.
[A]Rating
The trend is very important because itmeans that the mmigration to mobilephone games from home games.
[A]Macro Viewpoint
[B]Consistency with policy trends[A]Consistency with the technologytrends· High performance of smartphones[B]Consistency with economic trends[A]Consistency with the social trends· Rapid diffusion of smartphones
[A]Micro Viewpoint
[A]Market impact· Mobile game market size and home
video game market size for 2012 isabout the same.
[B]Spirit of innovation[A]Uniqueness· It is unique to Japan to existing huge
social game market whose market sizeis 400 billion yen.
Market size of home video game （JPY 100 million）[Figure] Market size of smartphone games and home video game in Japan
Market size of smartphone games（JPY 100 million）
(Source) CESA “CESA Games White Paper”(each year) and YRI “The 2012 survey resultson social gaming market”(2013/10)
15
G->
The Rise ofSmartphoneGame
Message
Japanese smartphone game market in2012 is 128.5 billion yen and four timesas much as the previous year.Smartphone game market has thepotential to exceed the home videogame market in the future.
Summary
Japanese smartphone game market in2012 is 128.5 billion yen and four timesas much as the previous year. Themarket is expected to further increasebecause of improving the penetration ofsmart phones.
It the future, many overseassmartphone game makers are expectedto enter the market in Japan becausesmartphone is a universal platform. Onother hand, smartphone game makersin Japan will try to provide their gamesto foreign market.
[A]Rating
Smartphone game market has thepotential to exceed the home videogame market in the future.
[A]Macro Viewpoint
[B]Consistency with policy trends[A]Consistency with the technologytrends· High performance of smartphones[B]Consistency with economic trends[A]Consistency with the social trends· Rapid diffusion of smartphones
[A]Micro Viewpoint
[A]Market impact· Japanese smartphone game market is
expected to reach the scale of abouthalf of the home video game market thein two or three years.
[A]Spirit of innovation· There are smartphone game makers
such as “GungHo” which have growninto a global company.
[B]Uniqueness
[Figure] market size of smartphone game in japan
(Source) JOGA’s Online game market research report
0
200
400
600
800
1,000
1,200
1,400
2011年 2012年
USD 100 Million
4 times
16
G-5
The Drop inPerformanceof GREE
Message
Performance of GREE is deterioratingrapidly. It may show the decline ofsocial game for feature phones. Itencourages the change in direction ofthe mobile phone, smartphone gamemakers.
Summary
Net income of GREE July-Septemberperiod in 2013 was 2.4 billion, 73%year-on-year decline. And TheOperating income was 9.7 billion yen,38% year-on-year decline. Thecompany decreased sales and profit forthe first time after the listing.
The drop in performance of GREEshows the decline of social game forfeature phones. In the future, it will bemore important for mobile game makersto develop highly interesting game as“Pazudora” which “GungHo” provides.
[A]Rating
It is very important because itencourages the change in direction ofthe mobile phone, smartphone gamemakers.
[A]Macro Viewpoint
[B]Consistency with policy trends[A]Consistency with the technologytrends· Upgrading of mobile games and
increase in development costs of mobilegame.
[B]Consistency with economic trends[A]Consistency with the social trends· Rapid diffusion of smartphones
[A]Micro Viewpoint
[A]Market impact· The decline of huge social game market
in Japan has a high impact.[B]Spirit of innovation[A]Uniqueness· It is unique to Japan to existing huge
social game market whose market sizeis 400 billion yen.[Figure] Changes in operating income,
net income and sales of GREE
(Source) GREE IR materials
-5,000
0
5,000
10,000
15,000
20,000
25,000
30,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
1Q7-9
2Q10-12
3Q1-3
4Q4-6
1Q7-9
2Q10-12
3Q1-3
4Q4-6
1Q7-9
Sales Operating income Net income
JPY Million JPY Million
73% year-on-year decline
2011 2012 2013
17
G-6
TheDichotomization ofJapaneseGames
Message
There are only two types in Japanesegame market. One type is global gamewhich is aimed at global hit and anothertype is Japan-only game which isreleased only in Japan.
Summary
There are only two types in Japanesegame market. One type is global gamewhich is aimed at global hit and anothertype is Japan-only game which isreleased only in Japan. In the market,domestic games are very popular andforeign games which even become abig hit in the world are not popular.Japanese games meet the needs of“escapism”, on other hand foreigngames meet the needs of "self-realization". It is very difficult for Japan-only games to become a real hit in theworld because most of the games areproduced based on Japanese cartoonfilm and comic’s characters.
[B]Rating
It is not a huge change because it haslittle effect on Japanese game marketand Japanese game makers.
[B]Macro Viewpoint
[B]Consistency with policy trends[B]Consistency with the technologytrends[B]Consistency with economic trends[B]Consistency with the social trends
[B]Micro Viewpoint
[B]Market impact[B]Spirit of innovation[A]Uniqueness· Japanese games which meet the needs
of “escapism” are unique to Japan.
[Figure] The dichotomization of Japanese games
(Source) The Japan Research Institute
dichotomization
Japanese game market
Global Game* it is aimed atglobal hitex："Pokemon","BIO HAZARD","Final Fantasy"
Japan-only game* it is releasedonly in Japan* it is oftenproduced based onJapanese animeand manga
Global Popular Foreign Games
Global game market×
×
18
G-7
NewMovementunder theInfluence ofSocialGames onHome Video
Message
Some home video game makers inJapan started to introduce some newmovements to their home video games.In the future, Japanese game makerscould introduce various newmovements.
Summary
There are new movements under theinfluence of social games on homevideo game. For example, some homevideo games are sold only by Internetdelivery, New series of popular gamessuch as “Dragon Quest” and “FinalFantasy” changes from offline RPG toMMORPG, and Introduction of Free-to-play & micro transaction.
If home video game market in Japan isshrinking, Japanese game makers willintroduce various new movements.
[B]Rating
It is not very important because the newmovements are not introduced to mostof Japanese home video games.
[B]Macro Viewpoint
[B]Consistency with policy trends[B]Consistency with the technologytrends[B]Consistency with economic trends[B]Consistency with the social trends
[B]Micro Viewpoint
[B]Market impact· The New movements are not introduced
to most of Japanese home video games[B]Spirit of innovation[B]Uniqueness
[Figure] New series of “Dragon Quest”
(Source) SQUARE ENIX Website
[Figure] List of home video games which have micro transaction
(Source) SQUARE ENIX Website
Company Game ti ttle
Bandainamco ACE COMBAT INFINITY
Bandainamco JOJO'S BIZARRE ADVENTURE
Bandainamco One Piece
19
G-8
“GalapagosPhenomenon”of JapaneseHome VideoGame Market
Message
In Japanese home video game market,portable game machines are morepopular than stationary game machines.If this situation continues in the future,international competitiveness ofJapanese game may be reduced.
Summary
In Japanese home video game market,portable game machines such as“PSP”, “PS Vista” and “Nintendo DS”are more popular than stationary gamemachines such as for ”PS3” and “Xbox”.Result of game makers in Japan hadfocused on portable game machinesoftware, technical capabilities of themakers become inferior to ones offoreign makers, and the number ofJapanese games which become a bighit in the world decreased.
If this situation continues in the future,international competitiveness ofJapanese game may be reduced.
[A]Rating
It is important for Japan because Japanis aiming to increase exports ofJapanese contents.
[A]Macro Viewpoint
[A]Consistency with policy trends· “Cool Japan”：Promotion activities
overseas expansion and export ofJapanese content by the Government ofJapan
[A]Consistency with the technologytrends· Soaring development costs of software
for stationary game machines such as“PS3” or “Xbox”.
[B]Consistency with economic trends[B]Consistency with the social trends
[A]Micro Viewpoint
[A]Market impactIt has a big impact on internationalcompetitiveness of Japanese gameand Performance of Japanese gamemakers which provide stationary gamesoftware.
[A]Spirit of innovation· Viewed from another side, Japanese
game makers are more advanced ondevelopment of portable games.
[B]Uniqueness[Figure] 2009 game sales rankings ofJapan and the United StatesRank
Type of
Console
Ti tl e Type of
Consol e
Ti tl e
1 DSDragon Quest IX: Sentinels of
the Starry SkiesXBox Prototype
2 DSPokemon Heart Gold / SoulSilver
Wii Wii Fit
3 Wii New Super Mario Bros. Wii Wii EA Sports Active4 DS Tomodachi Collection Wii Wii Sports
5 PS3 Final Fantasy XIII XBox UFC Undisputed
6 Wii Wii Sports Resort XBox Red Faction : Guerrilla
7 Wii Wii Fit Plus Wii Tiger Woods PGA Tour 10
8 DSInazuma Eleven 2: Kyoui noShinryokusha (Fire/ Blizzard)
PS3 Prototype
9 Wii Monster Hunter 3 (Tri) PS3 UFC 2009 Undisputed
10 PSPMonster Hunter Portable 2nd
G (PSP the Best)XBox
Gohstbusters: The Video
Game11 DS Mario & Luigi RPG3!!! PS3 InFamous12 Wii WiiFit DS Pokemon Platinum Version
13 DSLayton Kyouju to Majin noFue
Wii Mario Kart Wii
14 DS Kingdom Hearts 358/2 Days XBox Tiger Woods PGA Tour15 PS3 Yakuza 3 Wii Punch Out
16 PS3 Resident Evil 5 (PS3) DS New Super Mario Brothers17 Wii Mario Kart Wii Wii Wii Play
18 PSP Phantasy Star Portable 2 DS Mario Kart DS19 DS Rhythm Tengoku Gold PS3 Red Faction: Guerrilla
20 DSPokemon Mystery DungeonSoranotankentai
PS3 Tiger Woods PGA Tour
Japan USA
(Note) * “blue cell ": it means that game software is for portable game machines.(Source) public information
20
G-9
The rise ofGungHoOnlineEntertainment
Message
GungHo Online Entertainment isextending the performance because ofa big hit of a smartphone game “Puzzle& Dragons”. And its overseasdevelopment is also progressingsmoothly. In the future, the number ofgame makers will increase, which makea big breakthrough by a big hit of onecontent.
Summary
GungHo Online Entertainment which issmartphone game makers andSubsidiary of Softbank extend theperformance because of a big hit of asmartphone game “Puzzle & Dragons”.Sales of interim results in June 2013was 10.4 times year on year to 74.6billion yen and the operating incomewas 44 times year on year to 45.1 billionyen. In both South Korea and NorthAmerica the software has beendownloaded more than 1 million, andoverseas development is progressingsmoothly.
If smartphones are more popularworldwide in the future, the number ofgame makers will increase, which willmake a big breakthrough by a big hit ofone piece of content such as GungHoOnline Entertainment.
[A]Rating
The rise of GungHo OnlineEntertainment encourages the growth ofJapanese smartphone game marketand leads to the global expansionJapanese game contents.
[B]Macro Viewpoint
[B]Consistency with policy trends[B]Consistency with the technologytrends[B]Consistency with economic trends[A]Consistency with the social trends· Rapid diffusion of smartphones
[A]Micro Viewpoint
[A]Market impact· It increases Penetration and awareness
of the smartphone games and thenumber of new entrants.
[A]Spirit of innovation· It has attracted attention in the world as
a case of rapid growth smartphonegame makers.
[B]Uniqueness
[Figure] Changes in operating income and sales of GungHo
(Source) GungHo IR materials
21
G-10
The Drop inPerformanceof Nintendo
Message
The performance of Nintendo hasdeteriorated since 2009 due to poorsales of its new machines and asignificant reduction of them. If poorsales of their game consoles continue,the company will have to change indirection.
Summary
The performance of Nintendo hasdeteriorated since 2009. Operatingincome was in the red for the secondconsecutive year in 2011 and2012.Sales of interim results in 2013was 2.5% year-on-year decline, andOperating income was in the red too.
Cause of poor performance is a poorsales "Nintendo 3DS" and "Wii U" and asignificant reduction of the twomachines.
If poor sales of their game consolescontinue, the foundation of the businessmodel of Nintendo will collapse and thecompany will have to change indirection.
[B]Rating
The drop in performance of Nintendowhich was on the victorious side inhome video game market shows thedecline of home video game machinemarket.
[B]Macro Viewpoint
[B]Consistency with policy trends[B]Consistency with the technologytrends[B]Consistency with economic trends[A]Consistency with the social trends· Rapid diffusion of smartphones
[B]Micro Viewpoint
[A]Market impact· It has a big impact on home video game
machine market.[B]Spirit of innovation[B]Uniqueness
[Figure] Changes in operating income and sales of Nintendo
-100,000
-50,000
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
halfyear
fullyear
halfyear
fullyear
halfyear
fullyear
halfyear
fullyear
halfyear
Sales Operating income
JPY Million JPY Million
Deficit has continued
2009 2012 20132010 2011
(Source) Nintendo IR materials
22
N-1
Abenomics
Message
Legalization of Casino Gambling isgoing to be submitted during the currentDiet session, and Casino in Japan couldbe opened just before the Tokyo 2020Olympic Games.
Summary
“Abenomics” refers to the economicpolicy of Abe Shinzo, the Prime Ministerof Japan. His aim was to revive thesluggish economy with "three arrows": amassive fiscal stimulus, moreaggressive monetary easing from theBank of Japan, and structural reforms toboost Japan's competitiveness.Although Almost a year has passedsince the Prime Minister voiced theeconomic policy, Analysts remaindivided over the success of Abenomics.
[A]Rating
Abenomics is the biggest issue for theAbe administration, and it has a bigpotential to change the Japaneseeconomy.
[A]Macro Viewpoint
[A]Consistency with policy trends· Abenomics is one of the important
policies itself.[B]Consistency with the technologytrends[A]Consistency with economic trends· As Japanese economy has been
stagnant for a long period of time, theeconomic reforms are highly required.
[A]Consistency with the social trends· Abenomics may become the way to
solve the social problems in Japan suchas the problems with the aging society,weakened competitiveness in the world.
[A]Micro Viewpoint
[A]Market impact· The policy will affect various markets
drastically.[A]Spirit of innovation· An important part of Abenomics' "Third
Arrow" includes policies intended tospur growth through entrepreneurshipand innovation.
[B]Uniqueness
[Figure] Details of “Abenomics”
(Source) BUSINESS INSIDER “THE TRUTH ABOUT ABENOMICS — The JapaneseEconomic Experiment That's Captivating The World”
23
N-2
GrowthStrategy(the 3rdArrow ofAbenomics)
Message
The third arrow of the Abenomics, agrowth strategy, includes structuralreforms such as deregulation andpublic-private support for key sectors.
Summary
The third arrow of Abenomics, a growthstrategy, aims at revitalizing industries,expanding global outreach, andbolstering innovation. Given that thenation’s potential for growth itself hasextremely weakened, it is very requiredto implement as quickly as possible thethird arrow of Abenomics to encourageprivate sector investments.
[A]Rating
The growth strategy includes structuralreforms such as deregulation andpublic-private support for key sectors. Itis not too much to say that the successof Abenomics is determined accordingto the results of the growth strategy.
[A]Macro Viewpoint
[A]Consistency with policy trends· The growth strategy is the important
policy itself.[B]Consistency with the technologytrends[A]Consistency with economic trends· Some industries need structural reform
to strengthen Japan’s industrialcompetitiveness as mentioned in thegrowth strategy.
[A]Consistency with the social trendsAbenomics and the growth strategymay become the way to solve thesocial problems in Japan such as theproblems with the aging society,weakened competitiveness in theworld.
[A]Micro Viewpoint
[A]Market impact· The policy to boost private investment
and to reform regulatory has big impacton various markets.
[A]Spirit of innovation· The ggrowth strategy includes policies
intended to spur growth throughentrepreneurship and innovation.
[B]Uniqueness
[Figure] Growth Strategy in Abenomics
(Source)nippon.com “Abenomics and the Government’s New Growth Strategy”
the New Growth StrategyPrivate sector revitalizationtax cuts to investment taxes, Increasing business startup/closure rate to around 10%, etc.Business environmentestablishment of national strategic special zones, lifting Japan’s ranking from 15th to 3rdplace among industrialized countries on the Ease of Doing Business Index, etc.Commerce and Globalizationraise of FTA ratio from current 19% to 70% (by 2018),number of foreign tourists visiting Japan: From 10 million in 2013 to 30 million by 2030, etc.Agriculture, forestry, and fisheriesValue of “sixth-order” industries: Tenfold increase to ¥10 trillion (2020), Exports ofagricultural, forestry, fisheries products, and foods: from ¥450 billion at present to ¥1trillion (2020), etc.Employment, women's issues, trainingPercentage of women in work (ages 25–44): Increase from 68% at present to 73% (2020),World university rankings: At least ten universities in the Top 100 within the next tenyears, etc.EnergyReform electricity supply systems: Create ¥16 trillion worth of new industry, newemployment, Commercial development of the marine resources, etc.Healthcare and medicinehealth and preventative medicine market: From ¥4 trillion at present to ¥10 trillion in
2020, Scale of medical market: From ¥12 trillion at present to ¥16 trillion (2020) , etc.
24
N-3
Sales taxRaise
Message
The sales tax rate was decided to beraised to 8 percent from the current 5percent next April as planned. The taxhike put Abenomics to the test.
Summary
Prime Minister Shinzo Abe has decidedto raise the sales tax rate to 8 percentfrom the current 5 percent next April asplanned. He decided that in order tomaintain confidence in the fiscal policyof Japan and establish a social securitysystem that is sustainable for futuregenerations.
[B]Rating
Sales tax raise is an important issuefrom the perspective of both restoringthe fiscal health and affecting theconsumption behavior.
[A]Macro Viewpoint
[A]Consistency with policy trends· Japan has to demonstrate a solid
commitment to making continuous andproactive effort to restore fiscal health tothe international community.
[B]Consistency with the technologytrends[C]Consistency with economic trends· The tax hike has a potential to thwart
the effort of the growth strategy ofAbenomics.
[A]Consistency with the social trends· The sales tax raise is required to
confirm financial resources for socialsecurity with Japan facing a rapidly-aging society.
[A]Micro Viewpoint
[A]Market impact· The decline in consumption due to a
decrease in disposable income couldhave negative impact on the markets.
[B]Spirit of innovation[B]Uniqueness
[Figure] Change in privateconsumption by sales-tax hike
(Source) THE WALL STREET JOURNAL “Japan’s Abe Seen Deferring Sales Tax DecisionUntil Around October”
25
N-4
TokyoOlympicGames
Message
Tokyo has been chosen by theInternational Olympic Committee to hostthe 2020 Summer Games. The OlympicGames will be an “explosive agent” forJapan’s economy.
Summary
Tokyo has been chosen by theInternational Olympic Committee to hostthe 2020 Summer Games. PrimeMinister Sinzo Abe claimed that 2020Olympic Games will be an “explosiveagent” for Japan’s economy. Tokyometropolitan government evaluates thepositive effect of 2020 Olympic Gamesto the Japanese economy at ¥ 2.96trillion for the period 2013-2020. It alsoestimates Olympic Games to create150,000 new jobs until 2020. Moreover,it expects at 8.5 million the number oftourists who will visit Japan for 2020Olympic Games.
[A]Rating
The Olympic Games will be an“explosive agent” for Japan’s economyand have good effects on wide range ofareas.
[A]Macro Viewpoint
[A]Consistency with policy trends· Tokyo Olympic Games will be an
“explosive agent” which assistsAbenomics and the growth of Japan’seconomy.
[B]Consistency with the technologytrends[A]Consistency with economic trends· Many people in Japan hope that the
Tokyo Olympics will have positiveeffects on the economy as they do notfeel that the economy is recovering fromthe prolonged slump.
[A]Consistency with the social trends· The 2020 Olympics will be organized in
a way it will contribute to disasterrecovery.
[A]Micro Viewpoint
[A]Market impact· Hosting the Olympics will have good
effects on a wide range of areas suchas infrastructure and tourism.
[A]Spirit of innovation· The technology for foreign tourism such
as digital signage and navigation withsmart phones would be developed.
[B]Uniqueness
[Figure] The plan for Tokyo Olympic Games 2020
(Source)Tokyo 2020 Bid Committee’s web page
26
N-5
Participationin TPP
Message
Prime Minister Shinzo Abe aims torevive the Japan’s sluggish economywith “three arrows”: a massive fiscalstimulus, more aggressive monetaryeasing from the Bank of Japan, andstructural reforms to boost Japan'scompetitiveness.
Summary
“Abenomics” refers to the economicpolicy of Abe Shinzo, the Prime Ministerof Japan. His aim was to revive thesluggish economy with "three arrows": amassive fiscal stimulus, moreaggressive monetary easing from theBank of Japan, and structural reforms toboost Japan's competitiveness.Although Almost a year has passedsince the Prime Minister voiced theeconomic policy, Analysts remaindivided over the success of Abenomics.
[B]Rating
The impact of TPP on Japan’s economywill be significant and the sense ofuncertainty about what it will be in thefuture is high.
[A]Macro Viewpoint
[A]Consistency with policy trends· The participation in TPP has an impact
not only on Japan’s economics but alsoon Japan’s foreign policy such as therelationship with the U.S.
[B]Consistency with the technologytrends[A]Consistency with economic trends· The government forecasts Japan’s
participation in the Trans-PacificPartnership to increase its real GDP by3.2 trillion yen, or 0.66% in its ratio toGDP (Cabinet Secretariat 2013).
[A]Consistency with the social trends· Japanese companies seek to their
growth in Asian emerging markets andthe participation in TPP will help them.
[B]Micro Viewpoint
[A]Market impact· There is a possibility that some markets
including the agriculture sector and thehealth care sector need to be reformed.
[B]Spirit of innovation[B]Uniqueness
[Figure] Economic partnership framework involving Japan
(Source) bilaterals.org “TPP declaration fuels other talks / European nations grow moreeager to reach trade deals with Japan”
27
N-6
Cool Japan
Message
Japan’s government promotes export of“cool Japan”, Japanese creativeproducts and culture, to all overt theworld.
Summary
The term “cool Japan” refers toJapanese products and culture whichare creative and has been accepted andis supported internationally. Theinvolved industries range widely fromfood to manga comics and fashion. Theministry of economy, Trade and Industrypromotes overseas advancement of aglobally appreciated “Cool Japan”brand, fostering creative industry,promotion of these industries in Japanand abroad, and other related initiativesfrom cross-industry and cross-government standpoints.
[A]Rating
The cool Japan project has potential toimprove national competitiveness.
[A]Macro Viewpoint
[A]Consistency with policy trends· The cool Japan policy was given status
as that of one of the important growthstrategies in the Abenomics.
[A]Consistency with the technologytrends· The development of Internet technology
helps Japanese contents expand allover the world.
[A]Consistency with economic trends· The importance of export promotion is
increasing as the domestic demand isdecreasing.
[A]Consistency with the social trends· Japanese culture is highly valued
abroad as well as in Japan.
[A]Micro Viewpoint
[A]Market impact· The cool Japan policy has a positive
impact on the creative industries andother surrounding markets.
[B]Spirit of innovation[A]Uniqueness· Japanese unique culture is highly
evaluated in the world.[Figure] The Image of Cool Japan
(Source) All Nippon Airways’ web page
28
N-7
SocialSecurity(Pension)
Message
Japan’s government has beenpromoted the comprehensive reform ofsocial security and tax as a response tothe extreme drop in the birthrate, ageingof society and the critical state of publicfinances.
Summary
It is said that Japan’s social securitysystem is too generous, and currentbenefit levels cannot realistically bemaintained. The system was createdwhen Japan enjoyed relatively highgrowth and aging was not yet a seriousproblem. Now that the situation haschanged, the government has beenpromoted the comprehensive reform ofsocial security and tax as a response tothe extreme drop in the birthrate, ageingof society and the critical state of publicfinances.
[A]Rating
The problem of the social security isgetting serious. Urgent action should betaken to maintain the system of thesocial security.
[A]Macro Viewpoint
[A]Consistency with policy trends· The reform of social security is
inevitable and must be included in theset of policies.
[B]Consistency with the technologytrends[A]Consistency with economic trends· Changes in the economic structure in
these days make it inevitable for thesystem of social security to be reformeddrastically.
[A]Consistency with the social trends· Current social security system cannot
realistically be maintained since thesociety is facing advancement of agingsociety with child birthrate falling.
[A]Micro Viewpoint
[A]Market impact· The reform of social security will have a
big impact on the health care industry.[B]Spirit of innovation[A]Uniqueness· The ageing of Japan is thought to
outweigh all other nations, as thecountry is purported to have the highestproportion of elderly citizens.
[Figure] Increase of social securityexpenditure
(Source) Ministry of Health, Labour and Welfare
29
N-8
AgingInfrastructure
Message
The problem of aging infrastructure isserious problem and innovativetechnologies (e.g. M2M, radar) shouldbe used to solve it.
Summary
A deadly Sasago tunnel collapse on abusy highway near Tokyo has led todoubts about the quality and safety ofJapan’s much vaunted, enormouslyexpensive infrastructure. Japan built amassive amount of infrastructure in thedecades following World War II, and thismeans that the number of facilities builtmore than 50 years ago will increase atan accelerated pace over the next 20years. In order to solve this seriousproblem, The government is compiling a"Basic Plan for Extending the ServiceLife of Infrastructure," in which the latesttechnologies to improve safety whileholding down costs will be utilized.
[A]Rating
The problem of aging infrastructure isserious problem and innovativetechnologies should be used to solve it.
[A]Macro Viewpoint
[A]Consistency with policy trends· This topic is mentioned in the growth
strategy of Abenomics.[A]Consistency with the technologytrends· The development of IT technology
makes it efficient to maintain andmonitor infrastructure.
[B]Consistency with economic trends[A]Consistency with the social trends· The problem of aging infrastructure is a
serious social problem.
[A]Micro Viewpoint
[A]Market impact· The plan for extending the Service life of
infrastructure will affect the constructionindustry.
[A]Spirit of innovation· The innovative IT technologies such as
M2M, sensor, and radar are related.[B]Uniqueness
[Figure] The percentage of over 50-year-old equipment
(Source) Ministry of Land, Infrastructure, Transport and Tourism
16 18
4030
6545
7
29
56
2012.March
2022
2032
Bridge Tunnel Harbors
30
N-9
OnlinePrivacyProblem
Message
Effective use of personal data andappropriate protection of privacy hasbecome serious problems as thesmartphones are rapidly spreading andthe big data technology is developing.
Summary
Effective use of personal data andappropriate protection of privacy hasbecome serious problems as thesmartphones are rapidly spreading andthe big data technology is developing.Japan’s government set up a committeewhich cut across ministries andagencies to consider how to utilizepersonal data.
[B]Rating
The privacy problem has impactspecifically on IT sectors.
[A]Macro Viewpoint
[A]Consistency with policy trends· The Prime Minister declared to promote
the utilization of IT and big data is oneof the key technologies of IT sector.
[A]Consistency with the technologytrends· Privacy rights of consumers would be
more threatened as IT technology hasbeen developed.
[B]Consistency with economic trends[A]Consistency with the social trends· The news related to privacy problem is
increasing.
[B]Micro Viewpoint
[A]Market impact· In the IT market, keeping the
appropriate balance between privacyprotection and data utilization is a veryimportant issue.
[B]Spirit of innovation[B]Uniqueness
[Figure] Frame work for personal data protection in Japan
(Source) Office of Personal Information Protection, Cabinet Office
31
N-10
OnlineSecurityIssues
Message
The serious risk surroundingcyberspace is increasing. Japan’sgovernment established “CybersecurityStrategy”, and MIC started “ACTIVE(Advanced Cyber Threats responseInitiatiVE)” project with privateenterprise such as NTT, KDDI.
Summary
As merger and integration ofcyberspace and real-space proceed, theserious risk surrounding cyberspace isincreasing. Information Security PolicyCouncil established “CybersecurityStrategy” as a new national strategy oncybersecurity in June 2013. Theobjectives include (1) Constriction of“Resilient” Cyberspace, (2) Constructionof “Vigorous” Cyberspace, and (3)Construction of “World-leading”Cyberspace.
[B]Rating
The online security issue has impactspecifically on IT sectors.
[A]Macro Viewpoint
[A]Consistency with policy trends· This is an important policy itself.[A]Consistency with the technologytrends· As information technology advances,
the security issue will be moreimportant.
[B]Consistency with economic trends[A]Consistency with the social trends· The security issue became a social
challenge. For example, the number ofthe smartphone malware is increasing.
[B]Micro Viewpoint
[A]Market impact· Online security thread will affect wide
range of markets such as IT sector.[B]Spirit of innovation[B]Uniqueness
[Figure] Image of ACTIVE project
1. List the URL of sites which spread malware.
2. Alert users who tend to access dangerous sites.
3. Warn administrators of dangerous sites to take proper measures.
(Source) Ministry of Internal Affairs and Communications