Instead, he locates the core of the problem in Japan itself, pointing to its aging population and shrinking market, licensing agreements that keep profits out of creators’ hands, and the reluctance of conservative companies to embrace new ideas. Futatsugi says the most serious threat to Japan’s video game industry is not from China. “There aren’t any companies in Japan that will give us the money to make the kinds of games we want to make,” he said, adding that “Chinese companies are the ones that most recognize our company’s value.” It doesn’t hurt that he is allowed to keep 100 percent of the intellectual property from the venture. In 2021, he received a substantial investment from NetEase, giving him more freedom to express himself artistically. Futatsugi, the Japanese game developer, has been among the beneficiaries as Chinese companies look overseas.
MiHoYo declined multiple interview requests, citing its executives’ busy schedules. A new freeze on domestic game releases has further accelerated the shift. Many studios once focused only on China turned their eyes overseas, where releases were far easier. A watershed came in 2018, when the government temporarily cut off the approval process for releasing games domestically. Now, about one-third of the top 100 mobile games in Japan come from China.įor years, China’s video game industry was largely cut off from the world because of government bans on consoles and strict censorship. Only four years ago, Japanese developers held a monopoly on the top games in Japan, said Daniel Ahmad, a senior analyst at Niko Partners, a video game research firm. It is one of several Chinese games that have broken through - the others on a smaller scale - in the Japanese market. This inducement to gamble has drawn complaints from both players and regulators in Japan and China, but miHoYo has allayed those fears by making it entirely possible to play the game without spending a dime. Players win rewards through a lottery system, and the odds of getting the best ones - many of which are available only for a limited time - are vanishingly small. The concept is known as gacha, a Japanese word that describes the country’s beloved capsule toys.
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Genshin is free to play, but it has generated a dragon’s hoard of revenue through another concept from Japanese games: charging players for the chance to win new characters and powerful equipment.
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