Nikolas Sargeant
Japan has been at the forefront of video game development ever since the 1980s when companies like Nintendo and Sega first pioneered the concept of the dedicated game console. Along with those consoles, Japan also introduced some entirely new game genres, such as the platform game Super Mario Brother, the fighting games Street Fighter and Tekken, and the puzzle game Tetris. It’s the Japanese who created some of the most iconic video game characters too, such as Sonic The Hedgehog, Pac-Man, and Pikachu.
In recent years, other countries have emerged at the forefront of the industry, with titles like Fortnite and Grand Theft Auto becoming some of the most iconic games of our times. But Japan is still a major player, and it’s rapidly taking the lead in an entirely new category of Web3 games.
A Growing Enthusiasm For Web3 Gaming
Some of the most famous Japanese gaming companies have emerged to embrace the concept of Web3 games, also known as blockchain games or play-to-earn games. Web3 adds an entirely new dimension to video games by making it possible for players to own their characters and items and earn rewards for their progress. With blockchain games, things like game characters, skins, buildings, weapons and other items are represented by NFTs, which can be traded freely on decentralized marketplaces in a peer-to-peer way. Blockchain games also incorporate cryptocurrencies, which are paid out to players as a reward for beating their opponents or completing various challenges and tasks.
Japan’s blockchain gaming industry is moving fast, and there has been lots going on over the past year:
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For instance, Sega announced in September 2022 that it’s partnering with double jump.tokyo to develop a new, blockchain-based version of its popular Sangokushi Taisen franchise. It’s said that the new game will be hosted on the Oasys Network, a blockchain that’s dedicated to Web3 games. It comes after Sega announced its first NFT project in April of that year, though it later canceled that plan.
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The financial institution SBI Group partnered with a Web3 firm called Smartapp, and in early 2023 it debuted the SBINFT Marketplace. SBINFT grew quickly to become one of the most popular NFT marketplaces in Japan, not only because of its focus on game NFTs, but also digital art. In June, SBINFT said that it too is also partnering with Oasys, enabling it to support every NFT that exists on that chain. Then in November, it announced that it’s rebranding its marketplace to focus on gaming NFTs specifically.
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In March 2022, Square Enix announced it was bringing the Dungeon Siege RPG game to The Sandbox metaverse, and the following May it announced plans to focus on AI, cloud gaming and blockchain. One month later, it revealed it would bundle the sale of its new Final Fantasy VII collectibles with Polkadot-based NFTs, before announcing in September that it had become an official validator of the Oasys network. Finally, in November, the company unveiled an upcoming game called Symbiogenesis that leverages blockchain technology.
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Another crypto player, called GREE, has said it is partnering with Avalanche blockchain developer Ava Labs to create a series of blockchain games for that network. GREE previously signed up as a validator of Avalanche, and it has been validating transactions on Oasys since July 2022.
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Konami, creator of legendary game franchises like Metal Gear Solid and Silent Hill, said last year it plans to recruit a wide talent pool to create new gaming experiences for Web3 and the metaverse. At the time, it said it aims to create a “unique distribution platform” based on the blockchain. There hasn’t been any news since then, but in January it celebrated the 35th anniversary of its Castlevania franchise with its first NFT collection.
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Bandai Namco is aiming to develop a network of virtual hubs that will act as a “framework for connecting with fans” of games such as Gundam and Dragon Ball. It then became a validator of Oasys the following month.
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Last but not least, Capcom, creator of the hit Street Fighter franchise, launched its first Street Fighter NFT collection on the WAX blockchain way back in 2021. Though it hasn’t announced any plans for blockchain games yet, it’s clearly paying attention.
There are a number of interconnected forces at play helping to accelerate this momentum. For one, there’s Japan’s unique cultural ethos around gaming and innovation, and adding to that is the Japanese government’s progressive stance towards the broader Web3 industry, which it sees as pivotal to the nation’s future economy. The developer and business communities in Japan have a strong appetite for partnerships and collaborations, and this enthusiasm is proving attractive to international players as well, further boosting the country’s blockchain gaming sector.
Cultural Compatibility
The Japanese way of life is one of the main reasons why blockchain games have found such fertile ground in the country. Japan’s novel cultural identity acts as a catalyst for the emergence of new trends and innovation, giving the nation a significant boost. For instance, Japan is the leader in the character-nurturing phenomenon that began with games such as Pokemon and Tamagotchi, and these concepts are perfect for marrying with the fundamentals of blockchain.
Japan also has a deeply ingrained subculture known as “Poikatsu” where people can earn rewards for the positive things they do every day. This idea fits perfectly with the concept of “play-to-earn” that has emerged as a key element of blockchain gaming. In addition, the Japanese love to “own” their game characters, which is why Pokemon and Tamagotchi were able to achieve such enormous popularity in the country. This fits with another idea that’s central to Web3 games, where NFTs can progressively become more valuable as the player racks up various achievements.
These cultural distinctions help to boost the appeal of blockchain gaming, and are one of the main reasons why play-to-earn and NFTs have become so popular there.
Government Support
Japan’s government has been more proactive than most when it comes to encouraging the growth of Web3 and blockchain, creating a policy that outlines a forward-thinking vision that has given further impetus to play-to-earn games. It has been very supportive of the Web3 industry and its development.
Japan’s prime minister Fumio Kishida, stressed the important role blockchain technology will play in the future of Japan’s economy. His government has created a dedicated Web3 project team that has emphasized how video games will be a key element in the growth of the sector.
With its strong government backing for Web3, Japan has become a hub that has attracted numerous talented video game developers from Asian countries such as China and South Korea. The country is already one of the world’s biggest markets for video games, and its willingness to embrace Web3 ideals makes it especially attractive for blockchain game developers, who have found an enthusiastic audience among Japanese gamers.
An Emerging Force
Japan is one of the top markets for video games and home to some of the most talented developers in the industry. It has a unique culture that fits neatly with many of the principles of Web3, and that, combined with its willingness to innovate and embrace new technologies has made it one of the world’s most fertile grounds for blockchain games.
Japan is looking increasingly likely to emerge as one of the world’s foremost leaders in Web3 gaming, as a result of its distinct cultural compatibility with the movement. Add to this its already-vibrant gaming ecosystem, its progressive regulatory outlook and its innovative spirit, and it’s clear that Japan will play an important role in shaping future blockchain gaming trends.
