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H1 2020 in Review: 5 Insights into the Japanese Mobile Gaming Market
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The Japanese market carries major weight for mobile game developers and publishers worldwide:

  • Mobile gaming accounts for around 1/3 of Japan’s mobile revenue share.

  • Japan is the third-largest mobile game market in the world.

  • Mobile gaming occupies 47% of the time Japanese users spend using apps.

In July 2019, the Japanese market welcomed the Pangle, a platform offering valuable resources for monetization and user acquisition. Since then, the platform has grown rapidly, even amid the unusual circumstances of early 2020. Here's what Pangle experienced in the Japanese mobile gaming market during H1 2020:

1. Mobile ad engagement soared, with more users tending to tap on ads.
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Ad engagement increased significantly during this period. In particular, ad CTR rose steadily, peaking in March. Although April saw a slight decrease, a relatively high level was still maintained overall. From H2 2019 to H1 2020, average CTR on Pangle increased by a solid 2%.

Engagement drives not only UA, but also monetization. Higher engagement leads to higher eCPM and more revenue, and also indicates better in-app ad experience.

2. Pangle's SOV in mobile gaming experienced robust growth, with the Sudoku game category growing fastest on Pangle.
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Mobile game MAU reached by Pangle increased massively, growing by 211% from H2 2019 to H1 2020.

The Sudoku game category grew especially fast. As number puzzles, Sudoku games naturally appeal to puzzle-loving Japanese mobile users, and this appeal may have been enhanced as more people stayed home in H1 2020. Sudoku games also appeal to developers, as they require relatively little investment.

3. eCPM improved for Japanese mobile games on Pangle.
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eCPM for games on Pangle increased steadily, reaching a minor peak in March. Compared to H2 2019, the eCPM for rewarded video ads and interstitial video ads was 18% higher in H1 2020.

4. The most profitable game categories in terms of ad monetization were Action, Idle, and Hyper-casual.
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Many Action and Idle games successfully adopted hybrid monetization models in H1 2020. These models employ both in-app purchases and in-app ads, maximizing revenue from both paying and non-paying players.

The Hyper-casual category has always been the strongest in ad-driven monetization, and its monetization capabilities continued to expand in H1 2020.

5. Rewarded video ads performed best in the SLG, Hyper-casual, and Action categories.
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Rewarded video ads maintained their strong performance in the Hyper-casual category. Meanwhile, SLG and Action games, which have traditionally relied on IAP-based monetization, used more rewarded video ads to enhance both game profitability and player experience. Thanks to high ARPU and long player lifecycles, SLG and Action games stand to earn much more revenue through rewarded video ads.

What trends do we foresee for the second half of 2020?
  • As ad-driven revenue streams continue to grow, we expect in-app ads to become at least as important as in-app purchases for mobile games.

  • To tap into their full monetization potential, IAP-based games will be incorporating more ads - especially rewarded video ads, which monetize non-paying players and encourage more IAPs. Because rewarded video ads are always optional to watch, they allow apps to maintain strong user experience.

  • In the short term, demand for online services will continue to be strong. As a result, opportunities for growth will continue proliferating in mobile gaming, entertainment, and content services.