In 2022 Japan ranked as the third largest video game market in the world, behind China and the United States. By the time of that ranking, the money had already left the living room.
Mobile is now the centre of gravity. Mobile game revenue in Japan was projected to reach $16.77 billion in 2024, driven by gacha games and by RPGs such as Pokémon and Final Fantasy on smartphones. Players spend around $150 a year on games, according to one estimate, and the overall market was put at about $28 billion for 2024. Another tally puts it near $26.3 billion, with subscriptions such as Xbox Game Pass and Nintendo Switch Online helping to push it there. The figures differ, but they point the same way. Even PC gaming has grown, reaching $1.61 billion by 2023.
From Space Invaders to the Famicom
Taito released Space Invaders in 1978, the first Japanese video game to win wide fame abroad. Capcom’s Street Fighter II followed in 1991 and had sold 53 million units worldwide by December 2023. Nintendo launched the Family Computer, known overseas as the NES, in 1983. It carried Super Mario Bros., Duck Hunt and Dragon Quest, and sold more than 60 million units over its life.
Sony joined in 1994 with the PlayStation. Discs replaced cartridges, graphics improved, and Final Fantasy VII arrived on it. Dragon Quest had started the JRPG trend in Japan back in 1986, and the genre still sells: Final Fantasy 7 Rebirth and Dragon Quest III HD-2D Remake both came out in 2024. Super Mario Party Jamboree was Japan’s bestselling console game that year.
Arcades shrink, esports grow
Arcades have not kept up. Revenue fell to around $4.1 billion (470 billion yen) by 2013, as phones and handhelds took over. Sega held about 60% of the arcade market in 2007.
Esports is a bright spot. Events scheduled for 2025 include EVO Japan, Tokyo eSports Festa and PARA eSports, which features Pokémon, Street Fighter II, Valorant, League of Legends and Tekken. In VR, the gaming market reached $1.79 billion in 2024 and could hit about $4.38 billion by 2033, with Sony hardware leading the growth.
