Games overtake electrical sector in Japan

Japanese game companies now make more money then electronics companies. Will video games save the economy?

Games vs. electricals
Games vs. electricals Eurotechnology Japan
In a recent newsletter, Gerhard Fasol, head of Eurotechnology Japan, points out that the Japanese games sector is booming--with the combined net annual income of Japan's top nine game companies overtaking the combined net income of Japan's top 19 electrical giants.

Game companies such as Nintendo are thriving through the global recession while stalwarts such as Panasonic and Sony struggle (Sony's diversification and PlayStation sales haven't helped recently) with huge corporate hierarchies and a dearth of new "must have" products.

What's interesting about the growth of Japanese game play is that it's mainly on consoles and handhelds (with the Nintendo DSi blurring the line), whereas in the U.S. the growth is on mobile devices and online.

Online games grew 22 percent year over year in the U.S., while console game sales are expected to drop by as much as 20 percent year over year.

What happens next in Japan is still a mystery. Corporate behemoths have been slow to change and are severely weighed down by huge ranks of bureaucracy. The U.S. style of slash-and-burn economics isn't likely to fit for most of the Japanese electronics manufacturers, so they'll be forced to make changes in some manner that works for them. Sooner or later it will be very painful.

In the meantime game companies and software that enhances existing experiences, like doing even more with mobile phones, will have the upper hand on electronic sales for the foreseeable future.

Follow me on Twitter @daveofdoom.

About the author

Dave Rosenberg has more than 15 years of technology and marketing experience that spans from Bell Labs to startup IPOs to open-source and cloud software companies. He is CEO and founder of Nodeable, co-founder of MuleSoft, and managing director for Hardy Way. He is an adviser to DataStax, IT Database, and Puppet Labs.

 

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