A growing number of online operators are targeting Japan, attracted by the potential of converting some of the $38 billion in annual pachinko revenue to their sites, though cracking the market takes patience, meticulous attention to detail, and full immersion in the local culture.
Online gaming is illegal in Japan, although the regulations are not strictly enforced. Some operators are betting on the fact that once the country finally has casinos up and running, online regulation will follow suit.
“We’ve seen it in other countries. We might be wrong, but we really hope that will be the case,” said an executive from a recently launched an online operation in Japan, who wished to remain anonymous.
Figures for the current size of the market are hard to come by, although Robin Reed, CEO of operator Ichiban Ventures, told an SBC CasinoBeats conference panel that online casinos may be currently generating about $300 million annually.
Perhaps the most solid data comes from Gamesys Group, which owns brands such as Vera & John, the market leader in Japan, as well as Solid Gaming and Golden Hero.
In its annual report, the U.K.-listed group said that Asia B2C revenue, which forms the bulk of its income in the region was GBP 122.4 million last year. Japan is its largest market.
“With triple-digit growth in 2019, Japan has been a resounding success and continues its positive momentum and upwards trajectory,” it said in its annual report.
Still entering the market is notoriously difficult. The main ways through the door are through SEO and through the country’s existing super affiliates, as advertising on normal channels is not permitted.
Any adverts that are appearing tend to be on less mainstream sites and ones which are unlikely to improve the image of the industry amongst the general Japanese public.
One online operator, which offers games from all the major providers, took a big step last month when it began advertising on a small television channel, but only for its not-for-money gaming site, which has a different domain from the real money channel, but the same brand.
If you can convert a Japanese player onto your site, you are likely to have a highly loyal and valuable customer.
Andrea Bellezza, VP of EU and Asia Pacific at KaFe Rock, a Malta-based affiliate organization, told the CasinoBeats panel that he couldn’t put a figure on lifetime value for a player, but said it’s higher than the numbers being seen in the U.S.
“They are a bit harder to get and you need to put in a lot of effort, but it’s definitely worth it as the amount they spend is much higher than in Europe. They are one of the most valuable players in the world.”
Reed agreed, saying he had seen lifetime player values in excess of EU2,000 and that is likely to rise over time.
Still, anyone thinking they can attract and retain a Japanese player by a few localization tweaks to an international website is unlikely to be successful. The Japanese need meticulous attention to customer service and expect a unique proposition for their market.
Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.
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