The Big Thing in Japan: Mobile SNS and Games

If you have traveled in Japan to a big city like Tokyo, you will find that everyone is text messaging or playing games. Japan’s mobile phone penetration rate is about 87.7 percent. Considering there are minors and seniors as a denominator, the market perspective penetration rate must be over 100 percent.

According to the Telecommunication Carriers Association, there are 122.4 million mobile subscribers as of August 2011, dominated by three carriers: Docomo (58.8 million), AU (33.5 million) and Softbank (26.6 million) that make up 97.1 percent of the market.

TCA also said 97.2 percent of phones in Japan have 3G or higher Internet connection. About half of the new phones sold are smartphones (45.5 percent) in this second quarter of 2011; Android accounts for 2.7 million and iPhone, 990,000. In short, everyone has phones that can access to SNS easily and the smartphone market is growing rapidly in Japan.

In this big mobile phone sector, two SNS platform providers Gree and Mobage are dominating the market. They represent SNS businesses that differ from others outside of Japan. They are virtual (members do not use real name or real identities) and social interaction happens inside of the virtual gaming world.

• Gree counts 123.6 million members worldwide. It released more than 6,500 smartphone applications, makes 18.4 billion JPY quarterly by selling virtual items for games, and 2.8 billion JPY quarterly sales from advertisement within their SNS.
• Mobage counts 29.7 million members (an increase of 9.78 million in 12 months), makes 31.1 billion JPY every quarter from its SNS business.

According to CNN, Facebook projects US$600 million virtual currency sales in the next 12 months with 800 million users. In contrast, Gree and Mobage are projected to make US$2.6 billion virtual currency sales in the next 12 months with 126 million users. The mobile SNS is highly monetised in Japan.

As most of my articles are related to search, I try to look for a connection between mobile SNS and search in Japan. However, the nature of the business models prohibits having a real life social impact hence almost no impact in search. What happens in Japan’s mobile SNS stays within mobile SNS, inside of its well monetised platforms.

Other SNS like Mixi, Facebook, and Google+ also are growing along with smartphone sales. In my next article, I will write and focus on other SNS that have impact with real life interactions.