Amid official recognition of esports, Japanese firms rush to cash in on booming market at home

by Junko Horiuchi

Kyodo

Konami Digital Entertainment Co. saw the Asian Games, the world’s second-largest multisport tournament after the Olympics, as a prime opportunity to boost demand for its game “Pro Evolution Soccer,” which was used in the Asiad’s competitive video gaming tournament.

In addition to firms in the gaming industry like Konami, an increasing number of other Japanese companies are making a belated entry into the lucrative esports market, in which 380 million people are estimated to watch livestreaming globally, generating potentially enormous revenues for advertisers, automakers and other businesses.

Promoters say esports is “universal” since it is open to people regardless of age, physical ability or gender, while people can also enjoy it by just watching the competition.

“I confirmed my conviction about the popularity of ‘Pro Evolution Soccer’ among the people of Indonesia and their high level of play,” Naoki Morita, Konami’s general manager of production, told a crowd of about 100 people who had gathered at an upscale shopping mall in Jakarta.

“The latest version of the game has been devised so that it will suit esports tournaments. I hope more of you will enjoy it,” Morita said, referring to the recently released 2019 version of “Pro Evolution Soccer.”

According to research company Newzoo, in 2018 the Asia-Pacific region is set to account for 53 percent of the 165 million people the firm defines as esports enthusiasts.

“Pro Evolution Soccer” was among the six titles that were used for the esports competition at the Asian Games, which was held as a demonstration event for the first time before it is included as a full medal event at the 2022 Asian Games in China.

Konami said it hopes to organize more esports tournaments using its titles, including the “Yu-Gi-Oh” trading card game and “Powerful Pro Baseball” series, and develop more games that are suited to esports tournaments.

Ilham Muhammad, 21, a hotel worker and avid fan of the soccer game since he was 12, said: “I came to the event to share knowledge about the game, build networks and see the skills of other players. ‘Pro Evolution Soccer’ is easy to play and such fun.”

“I also often watch esports tournaments online,” Muhammad added. He said he plays the game every day for two to three hours, and sometimes all day until he gets tired, at his friend’s house.

While esports is already popular in the United States, China, South Korea and other Asian countries, it is slowly gaining recognition in Japan, prompting businesses ranging from IT companies, automakers and communications firms to tap into the potentially lucrative market.

“The attention on esports has been growing fast since last year, and also in the stock market, with the spread of online games,” said Eiji Maeda, senior analyst at SMBC Nikko Securities Inc. “Many industries are setting their sights on the merchandise, licensing and advertising revenues of esports.”

“With the adoption of esports as a demonstration event at the Asian Games, it is also likely to draw interest from the public, who until now saw games as something for kids. The focus is now on whether games will be accepted as one type of culture in Japan,” he said.

For the first time in Japan, Toyota Motor Corp. in July sponsored an esports tournament for the game “Monster Strike” held at the Makuhari Messe convention center in Chiba Prefecture and offered its Corolla Sport hatchback, released the previous month, as a prize to the winner of the event.

Toyota said it hopes its involvement in the esports event will “expand channels to the younger generation, as the Corolla Sport vehicle targets customers in their 20s and 30s.” The automaker said it will continue to engage in esports by organizing events at its Corolla shops nationwide.

The Japan Esports Union, an entity set up in February this year to promote esports, also earned the sponsorship of six companies, including convenience store chain Lawson Inc., beverage-maker Suntory Holdings Ltd. and mobile phone operator KDDI Corp., for the first time in August.

KDDI said it made the decision to sponsor the organization given the increase in game players using smartphones, which will boost demand for high-speed, high-capacity communication networks.

According to data published by Gzbrain Inc., there were 49.22 million game players in the country in 2017, of which 18.55 million played on smartphones, 3.45 million on computers and 7.41 million on game consoles.

Smartphone advertising and marketing firm CyberZ Inc., which offers game streaming platform OpenRec.tv, organized with Avex Entertainment Inc. one of the biggest esports tournaments in Japan in June, with total prize money of ¥20 million.

The event attracted more than 35,000 spectators and was watched online by 970,240 people, CyberZ said.

“(Esports) connects with people around the world by streaming online,” said CyberZ CEO Takahiro Yamauchi.

“With the spread of smartphones, we expect to see more esports tournaments,” he said. “We want to make it not just a game tournament but like a music festival with cool lighting, celebrity performances and attractive presentation of the players.”

“We have an image that games are only for men, but by organizing an entertaining event we hope to diversify our fan base so that women and families with children are also included. We have already seen signs of it,” Yamauchi said.