Chuo University Speech(Nov 25th, 2011)
"The Structural Transformation of the Game Industry"


II. Overview of the Game Industry

Now let me talk about the overview of the game industry, first in terms of its size and how it is structured, and then explain about how innovations were spurred and business models were transformed as the industry underwent evolution. Lastly, I will talk about our vision in light of such environment.


Please take a look at slide 9. This illustrates the changes witnessed in the game industry. The computer games were introduced to the market in the late 70s. The diagram shows the global market size in a chronological order. The definition of "game" is broadening, so this does not include everything. Yet, having said that, the market is much larger than how the media perceives it. The Hollywood or the Japanese cinema industry sounds gigantic, and being exposed to television everyday, the TV market also seems huge. However, they are much smaller compared to the game industry. The game market today is roughly 8 to 10 trillion yen. The reason for the wide range is because talking about some specific numbers is not relevant due to the currency fluctuation. Of course, being big doesn’t necessarily make us important, but I just wanted to say that given the size, gaming industry might offer you interesting challenges as a place for work or as a research subject. Let me put the market size in context. The aggregate sales of iPhones since 2007, recorded roughly 140 million units. With Steve Jobs glorified as God, Apple's business is going through the roof. At the same time, the sales of Nintendo DS are also around 140 million units. iPad was considered to be a revolutionary tablet PC or evolution of PC, but the unit sold is around 40 million. Earlier I mentioned 140 million units for Nintendo DS; for PSP, the sales figure is 70 million and for the game consoles, unit sold is over 50 million respectively for PS3 and XBox 360, and over 80 million for Wii. There you have it. iPad and iPhone are one type of device category, but prior to these Apple products, game devices were the only hardware which had such a big volume as a single device category. Obviously we’ve seen the boom of the cell phones, but they come in different SKUs. We don't expect any single device to be dominant in the market going forward, but if you try to capture the market size, that is how influential the industry is.

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