Japanese Entertainment Industry Challenges the Chinese Market

Recently the Chinese government is beginning to push the growth of the Chinese entertainment industry. Anime, manga, and games are fortes of Japan, with China'€™s youth population of 500 million, China is becoming an attractive market for the Japanese entertainment industry, but it's not going to be easy.

Exhibition Held by Government-related Agency

The "National Anime, Manga, Game Industry Promotion Center" was established last year with backing of the Chinese Ministry of Culture. The promotion center’s four main functions are the development of human resources, the study and development of contents, the promotion of the industry, and international exchange opportunities. Many measures have been taken to promote the industry, such as the invitation of the lecturers from Japan, the construction of the exhibition centers, and establishment the departments in the universities, etc.

Result of these efforts can already be seen, as the "2nd Chinese International Anime, Manga, Game Exposition" was held between June 29th to July 3rd in Shanghai. The expo was held to demonstrate the posture of the Chinese government both to people from inside and outside of the country. In a hall 15,000 square meters wide, 89 booths comprised of enterprises from China, Japan, South Korea, and North America were lined up. The focus was on arcade machines, one of the reasons being the deregulation of the restriction on installation arcades in March. SEGA and KONAMI occupied a especially large space. Children gathered around the machines and were absorbed by games like "Mushi King".

Japanese games still hold superiority over others due to their refinement, their ideas, etc. The chief of the secretariat of the center, Don So Koh praised Japanese games. "I inspected the game arcades in Japan, they were wonderful. I believe if we grow it soundly in China, the games will be useful in improving the character and the mind. We are currently waiting for the advance of Japanese firms"

Strict Restriction is a Difficult Problem

The Chinese anime, manga, game markets would grow by 40 billion yuan (1.2 billion dollars), if the character industry is included, the market scale would increase to 1,000 billion yuan (3 billion dollars) in the future. It could become a treasure mountain for the Japanese industry, but there are some problems.

One of them is the severity of Chinese restriction. For example, in the case of importing TV anime, in order to promote the domestic industry, the only foreign anime that was permitted to be broadcasted was "The Prince of Tennis" for the past three years. The broadcasting time zone is also limited, and the Chinese TV stations are required to allocate 60 percent of their broadcasting time to Chinese animation. In the game market, the import of console and portable game equipments are not permitted. The current mainstream games are online games played via the internet. The installation of arcade game is being allowed experimentally while under observation at three places, include Shanghai. If the Chinese government changes its policy, all previous efforts would be blown away in one night.

Moreover, obtaining a grant is too difficult, since the jurisdictions of the governmental offices are too complicated. In addition, the risk of piracy has always existed although restrictions have been increased. Many firms were indecisive on how to participate in the exhibition.

Creating a Sound Image

Under this situation, SEGA invested 2.4 billion yen and established a joint enterprise with a major department store in Shanghai.

In May, a large-scale amusement park, "Prayer's Arena," opened throughout the two floors of this department store in downtown Shanghai. It's a maximum scale amusement arcade in China complete with t250 of the newest gaming machines. SEGA insisted on making a better image to wipe out the decayed image on arcade games.

A spokesperson of SEGA said, "SEGA has a record of changing the decayed image on arcade games after spending 25 years in Japan, we must fulfill the expectation here [in China] too". Moreover, SEGA helped push the study and promotion of games in China in general. Despite its risk, SEGA has paced its way to a full-blown advance into this huge market.

A board member of ASATSU.DK.Inc, Nagai Toshio, has 30 years of experience on doing business in China, including his promotion of "The Prince of Tennis". He said, "China has a huge population, and the Chinese characters in its language is similar to Japanese. China will most definitely become an important market for the Japanese industry; however, the restriction placed by the Chinese government is severe. If we focus on just the commercial side of things, we will not succeed. If we recognize elements such as politics, culture, and others, and work together with partners over here, we will get a chance at succeeding. We will need to spend a lot of time on this project, since this is a huge market, but we must set precedence as the pioneers.

Translated by T. Ohara