Game firms set sights on female market

By Naoko Fujimura, Yuki Yamaguchi, Kazuyo Sawa

Like many young Japanese women, Takako Suzuki says the first thing she does most days is think about her next boyfriend. Her choices: a cute millionaire, a butler or a samurai.

Whether playing the role of a teenager who fantasises about her five rich housemates or flirting with a civil war warrior, Suzuki says she can't get enough of "otome" Japanese romance games geared towards women.

Suzuki, who says she once played 10 different titles concurrently, buys credit from Gree to pamper her avatar with virtual clothes or shoes and buy tickets for additional game chapters.

"When I wake up in the morning, I play these games for a while before I really get up," said Suzuki, 28, an office worker. "I need to play otome games because I'm so stressed out by my nagging boss at work."

Suzuki and other female gamers are helping to reshape the US$10.6 billion ($12.8 billion) video game market in Japan, where the popularity of Gree's social network is luring developers typically focused on making titles for Sony and Nintendo.

Women will help sales of games played on social networks triple in the next five years, according to estimates by BNP Paribas in Tokyo.

"Developers must target women to expand their market instead of only focusing on men," said Toshihiro Nagahama, chief economist at Dai-ichi Life Research Institute in Tokyo.

"Dating games became a blockbuster category among women because characters in those games give them what they want from men in the real world."

The market for female-oriented games in Japan may reach 20 billion ($320 million) in five years from 6 billion last year, according to Hiroshi Yamashina, a Tokyo-based analyst at BNP Paribas.

Last year's sales accounted for 6 per cent of the overall Japanese industry.

Opportunities include turning graphic novels, called manga, into interactive games because female-oriented comics account for an estimated 70 per cent of Japan's 65 billion e-book market, Yamashina says.

That has benefited Gree, which runs and develops games for its Facebook-like service in Japan. Shares of the company, which says women make up more than 40 per cent of its users, have doubled in Tokyo trading this year, helping make it the best performer on the MSCI Asia Pacific Index.

President Yoshikazu Tanaka, 34, was Japan's richest bachelor in March with an estimated fortune of US$2.2 billion, according to Forbes magazine. His 49-per-cent stake in Gree is now worth US$3.4 billion based on current stock prices.

Tanaka, who pioneered social network gaming for mobile phones in 2007, set up Gree's first booth at last week's Tokyo Game Show next to the event's biggest participant - PlayStation-maker Sony.

Gree, which counts "otome" titles as its most popular gaming genre among women, displayed Darling wa Geinojin, in which users play the role of an aspiring artist, and the high school dating game Kimi to Naisho no Kyokara Kareshi, at the conference.

"Otome games are the hottest thing right now among women," said Keiichi Yoneshima, an analyst at Barclays Capital in Tokyo.

Nintendo, the world's largest maker of video game players, has fallen 51 per cent this year, while No 2 Sony, based in Tokyo, has dropped 48 per cent.

Kyoto-based Nintendo may be catching up. President Satoru Iwata said it would begin selling pink 3DS hand-held players in October to lure women and restore the "good" balance it had between female and male users. Sony sells its PSP players in six colours, including pink and white.

Increasing demand for female-oriented titles is part of the broader surge in the popularity of social-network games played on computers, phones and tablet PCs. While the games are typically free via web browsers, companies including Gree profit by selling virtual items or chapters of an interactive comic, the average user spending about 239 a month.

The social games market in Japan is expected to almost triple to 305 billion in 2013 from 107 billion last year.

By comparison, the software market for video game consoles and hand-held players shrank to 318 billion in 2010, down 12 per cent from 2007, according to Tokyo-based research firm Enterbrain.

Social networks are attracting developers including Konami, creator of the Metal Gear Solid series, which has about 10 million registered users for social games.

Capcom, publisher of the Resident Evil games, launched the Beeline Interactive brand in April to make social games on smartphones, including Apple's iPhone.

The game industry has "now gone to computers and smartphones or tablets, and social games are booming", said Edwin Merner, Tokyo-based president of Atlantis Investment Research, which manages US$3 billion in assets.

"Sony and Nintendo are not in this business much."

Nintendo and Sony are adding features to their products as social networks, phones and tablets become increasingly popular gaming platforms for free titles.

Nintendo is betting on 3D in its portable game player, while Sony is adding Wi-Fi and 3G functionality to its upcoming PlayStation Vita player.

Gree's Tanaka is pushing overseas expansion after buying Burlingame, California-based OpenFeint for US$104 million this year.

Gree aimed to generate as much as 80 per cent of its sales overseas in three years, compared with almost none now, and planned to have one billion users, he said last week.

While dating games and interactive manga may not be as popular overseas as they are in Japan, the concept of targeting women might succeed globally, said Tomoaki Kawasaki, an analyst at Cosmo Securities in Tokyo.

For Japanese women such as Suzuki, the hardest part of playing otome games is staying away. "I have to play them for 10 to 15 minutes before I can go to bed," she said.

- Bloomberg

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