According to the latest report from AppsFlyer, the average in-app purchase conversion rate in Japan is 3.5% while the app retention rate is double that of China and Indonesia.
Titled “The State of Gaming App Marketing 2018“, the report findings are based on 2.1 billion non-organic installs from 5,500 applications throughout 2018, breaking gaming apps down into four major categories: Midcore & Strategy, Casual, Hyper Casual, and Casino.
“The keitai culture is embedded in Japanese society given the ubiquity of mobile phones and growing smartphone penetration,” said Ronen Mense, president & MD, APAC at AppsFlyer. “Specifically, mobile gaming is a huge force in Japan and AppsFlyer’s data shows that both in iOS and Android, the most loyal users globally are in Japan, where the average retention rate in 2017 was 40% higher than in other top markets globally.”
Mense observed that Japanese gamers are also increasingly migrating from console to handheld devices and many gaming publishers have integrated game mechanics similar to loot boxes, known in Japan as gacha.
“Lastly, the answer also lies in the fact that Japanese mobile users usually do not like to be interrupted or disturbed while playing, and tend to pursue the quality of the overall user experience,” said Mense. “For this reason, game developers tend to develop games which are not mainly monetized by ads, but rather by in-app purchases.”
The report notes that localization is a challenge in both China and Japan, adding that as the third largest consumer market, Japan represents a huge opportunity for mobile marketers after China and the US. According to Mense, the complexity of Japanese as a language is something app marketers have to master to successfully engage with their target audience.
“Erroneous use can be considered disrespectful and adversely affect how the app resonates with its audience,” said Mense.
“Using the mobile gaming market as an example, gamers have always been used to experience video games in their native language, thus the localization of in-game instructions is key, while even in-game content can be customized to replicate the look and feel of the manga genre to appeal to users.”
Mense noted that the presence of many famous animation characters within a game can play a role in attracting downloads and retention in the country, adding that many games are including them as part of the game or overall user experience. The report found that Japan, Germany, the US, and the UK have the best retention rate, with the day 30 rate at double that of Brazil, China, and Indonesia.
Mense believes that the propensity of in-app purchases leads to this, with so much invested in the game playing a role in retaining it over a longer period of time. Monster Strike, a client of AppsFlyer, recently crossed $7.2 billion in revenue and became the highest earning app of all time, primarily due to its Japanese fanbase.
“On the other hand, for Japanese and foreign developers alike, this also translates in much lower chances to create Japan’s next [big hit games], a challenge shared [by] marketers from the moment they need to activate campaigns within a very competitive landscape,” concluded Mense.