Crypto Games in Japan
Japan is the most profitable gaming market in the world per user, with the total primary sales of My Crypto Heroes reaching 16,000 ETH.
Key Takeaways
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Japan’s strong foundation in gaming makes it a perfect location for blockchain-based game development.
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Popular crypto games in Japan include My Crypto Heroes, Captain Tsubasa RIVALS, and Crypto Spells. Social app Line has also revealed five “Gamer First” NFT games to be released in 2023.
Japan is one of the most active gaming markets in the world. Most people in the world are quite familiar with the Japanese gaming industry due to the popularity of PlayStation and Nintendo. Beyond its traditional gaming market, Japan is also becoming known for its rapidly growing crypto gaming industry.
On top of having a gaming industry with a global reach, Japan is actually also the most profitable gaming market in the world per user. The Japanese love games and they are willing to pay for them. This means that the Japanese market is particularly lucrative because users are willing to pay for games.
If you're interested in learning more about the Japanese crypto market, you can access the full report here: Crypto in Japan: Main Sectors, Industry Trends, and Future Prospects.
The Potential of Blockchain Games in Japan
Crypto games, also known as blockchain games, use blockchain technology and cryptocurrencies to create a more secure and transparent gaming experience.
Here, players can have true ownership of their in-game assets, and all steps, including transactions and exchanges, are recorded on the blockchain. This can create a more transparent and dynamic gaming economy, where players can earn real value for their time and effort spent in the game.
In November 2018, My Crypto Heroes, a crypto-RPG battler, was launched on the Ethereum blockchain, becoming Japan's first "big" homegrown crypto game. It was ranked #1 in the world in terms of trading volume and DAUs after its release. As of January 1, 2023, the total primary sales have reached 16,000 ETH.
Several key players in the Japanese gaming market are actively involved in the crypto space, including top listed mobile players such as Line, which revealed five "Gamer First" NFT games to be released in 2023, and MIXI, which joined Oasys Blockchain as a validator in April this year. There are also several crypto-native companies in Japan, such as Double Jump and CryptoGames.
In conclusion, there are 3 key features of the Japanese crypto game industry:
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Strong foundation: The Japanese game industry has a long and rich history of traditional games, which provides a strong foundation for the development of crypto games using blockchain technology.
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High potential: Japanese gamers are known for their willingness to pay for high-quality games, making the crypto game market in Japan highly lucrative.
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Mobile-focused: Mobile gaming is more popular in Japan than PC or console gaming, which has led many game companies to prioritize the development of mobile games that incorporate cryptocurrency and blockchain technology.
Overview of Three Popular Games in Japan
In this section, we’ll look at three popular crypto games in Japan, as well as their successes and challenges.
My Crypto Heroes
Source: MCH Verse & My Crypto Heroes🎮🏝 (@mycryptoheroes) / Twitter
My Crypto Heroes (MCH) is an NFT game that originated in Japan that was developed by double jump.tokyo. Utilizing the in-game token named GUM as the cornerstone of its economy, it has achieved one of the world's largest user bases and transaction volumes since its launch in November 2018, yielding actual economic benefits to some players.
The gameplay primarily involves collecting and nurturing historical heroes, and using them in battles in dungeons (referred to as nodes in the game). These heroes and items exist partly as NFTs, which can be traded between players.
From an economic perspective, the following elements constitute the main economic cycle of MCH:
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Quests: Players battle with their heroes and can earn EXP for heroes, materials for crafting, and items (replica extensions) as rewards for victories.
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PVP (Player versus Player) Duels: Players can earn ranking points and items by participating in duels, which can later be traded in the marketplace.
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Marketplace: Players can buy and sell items and heroes they own. These transactions use the in-game currency, GUM.
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Land activities: Players belong to virtual nations called "Lands" and engage in collective activities. Activities within the Land increase the value of the nation, resulting in dividends (GUM).
Source: MCH Active User
Based on user metrics provided by Footprint Analytics, while My Crypto Heroes has not consistently maintained a high level of active users, it has experienced significant spikes in user activity. Although these spikes may appear unrelated to a steady growth of the user base, after several cycles, the game has managed to attract a cohort of users who engage with it on a consistent basis.
Recently, the development team has expanded beyond their initial game development capabilities and has initiated the MCH Verse – a Layer 2 optimistic rollup on the gaming-specific Layer 1 blockchain Oasys. This strategic move leverages the unlimited scalability of the technology to enhance user experience and connectivity within the Verse.
While many mobile crypto games tend to minimize on-chain resource usage, opting to develop as much off-chain as possible to avoid complex on-chain features, MCH continues to lead in the Japanese crypto gaming market. It is swiftly adopting and incorporating ready-to-use technologies to improve the gaming experience.
Captain Tsubasa – RIVALS
Source: キャプテン翼 -RIVALS- (@TsubasaRivalsJA) / Twitter
Captain Tsubasa – RIVALS is a crypto-based game inspired by the globally renowned Japanese Anime series “Captain Tsubasa”, which hasover 70 million copies in circulation worldwide, and over 70K followers on Twitter globally. Leveraging the long-standing popularity and huge fan base of its anime series, this game combines interesting football themed game mechanics with unique in-game economy utilizing dual token systems.
There are two types of token in Captain Tsubasa – Rivals: TSUBSAUT and TSUGT, which are the utility token and governance token underpinning its game-economy respectively. In a fashion pioneered by Axie Infinity, segregating the reward system and governance system enables the game to take better control of the in-game economy and the actual velocity of the user, effectively limiting the volatility of USD denominated value of reward.
Source: Captain Tsubasa Token Price
However, since the introduction of TSUBASAUT, its value, denominated in dollars, has been in steady decline, potentially due to its unlimited emission and primary use for player profit-taking. The operating company implemented a Balancer system aiming to stabilize the price of TSUBASAUT within a certain range, but there has been little visible impact at time of writing.
This challenge hase been observed in other blockchain games like Axie Infinity and STEPN. It's critical for potential players to understand how "Captain Tsubasa – RIVALS" can maintain long-term user liquidity before making a purchase and starting gameplay.
Conversely, the governance token TSUGT has remained stable since its introduction. With a limited supply and in-game utility directly linked to vital gameplay functions like leveling up, its dynamics seem healthier. The team, investors, and advisors hold a total of 37% of the token supply, which will be released after a 12-month cliff, sustaining a natural supply/demand balance until that unlock occurs. This setup is expected to contribute to a stable token ecosystem.
Despite its dual-token powered system though, the game system is quite simple in that each player with 3 different character cards would compare the numbers they have, repeat it 3 rounds, and decide the winner. Players need to be strategic enough in which order they use the numbers.
In fact, the game has received criticism because of its simplicity, as they simply compare the numbers, and users cannot play a game without NFTs.
In spite of its struggles, Captain Tsubasa – Rivals illustrate the potential of IP in Japan and the intersection between NFTs, IPs, and gaming.
Crypto Spells
Source: クリプトスペルズ（クリスペ）日本語公式 (@crypto_spells) / Twitter
Crypto Spells is a longstanding NFT-powered strategic trading card game, introduced in 2019 by Crypto Games. With gameplay closely resembling that of Hearthstone and Gods Unchained, the game offers a low entry barrier for those new to the crypto world, thanks to its in-app wallet feature (iOS, Android).
Crypto Spells employs its Verse L2 system, TCG Verse (Trading Card Game Verse), on Oasys L1, similar to My Crypto Heroes, aiming to expand the crypto-native gaming system. They recently launched a new series, "NFTWars", allowing anyone with a verified NFT collection to create their own playable card. By encompassing a larger NFT holder base and enabling players to earn some OAS (Oasys native token), the ecosystem has the potential to extend beyond Japan and to a global audience.
In Crypto Spells, players engage in duels using decks of 30 cards, with a limit of two copies of the same card per deck. Players also add three skills to their decks, diversifying strategies and increasing competitiveness. By playing, players accumulate battle points which can be used to mint new cards, offering the chance to acquire rare NFT cards.
Source: Crypto Spells Total User
Crypto Spells experienced a significant growth in total user numbers from the fourth quarter of 2021.
Source: Crypto Spells Active User
However, when looking at active user metrics, the game appears to have struggled in sustaining growth momentum. Despite attracting new users, the growth in active users has been limited. This situation might change as the game starts integrating players more closely into their Verse system, potentially stimulating user engagement and activity.
Fueled by Japan's robust gaming culture foundation, both official and unofficial (community-led) tournaments are regularly held, both offline and online, extending the fan base beyond the crypto community. The game revolves around strategic execution of player skills, positioning Crypto Spells as an ideal gaming-centric ecosystem. Winners will receive rare NFTs, which can be traded on the secondary marketplace.
Conclusion: From Console to Crypto
The Japanese gaming industry is transitioning from traditional console games to the growing world of crypto gaming. The Japanese market is particularly lucrative because people are willing to pay for high-quality games. Although the Japanese crypto game business is still in its infancy, it has a solid foundation and significant potential.
To attract more players, project teams must continue to work hard to adapt to the rules of the crypto world and attract more players through engaging games and other marketing strategies.
This is part 2 of a 3 part series on crypto in Japan.
Part 1: Crypto in Japan: Industry Trends and Future Prospects
Part 3: NFTs in Japan: Key Projects and Features
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