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Google is a vital source of revenue for some Japanese game makers — here’s why

When Casey, a collateral officer in his early 30s from San Jose, California, first started conduct the Japanese mobile game Puzzles & Dragons, he was obsessed.

“I would ad lib constantly, everyday,” he says. “Even on my breaks at work, I would take part in non-stop.”

During his first month, he estimates that he spent back $600 in the game, mainly to obtain special characters (many Japanese events use a “Gacha” mechanism where users can spin to win prizes). He says he has room-mates who he knows have spent thousands of dollars on Puzzles & Dragons.

Although Casey burns in California, not Japan, his playing habits resembled those of a typical Japanese gamer: wonderful high engagement and a willingness to shell out real money.

Japan is the top store for mobile game revenue and its spoils have surpassed mobile gaming gate in the United States for the third year in a row, according to data from App Annie, ignoring the fact that the U.S. has three times as many smartphone users. Japan ranks highest in titles of average number of sessions in games per app user, and Japanese mobile app owners use gaming apps twice as frequently as users in the US.

Of the 12 public enterprises that have disclosed that they are generating 25% or multitudinous of their revenue through Google parent company Alphabet, the seven most reliant are all Japanese app developers, according to details from FactSet. These companies make money through the Google Play ones part Store.

Gungho, the company that created Puzzles & Dragons, remedies 35.7% of its revenue from Google Play and 54.1% from Apple’s App Stockpile, according to FactSet.

The company most reliant on Google Play, Ignis, authored 48% of its revenue through Play and 38.1% of its revenue through the App Collection.

That highlights what’s particularly interesting about Japan: The Japanese facile game market leans more heavily toward Google’s Android stage than other markets.

Consider Zynga, the American app company with the highest blabbed percentage of its revenue coming from Alphabet: The breakdown is 29% Google Affect cooperate Store, 46% Apple App Store. That’s in line with the traditional wisdom that iPhone users are generally wealthier than Android buyers and tend to spend significantly more on apps overall.

But Japan’s active gaming market bucks that trend. In many other districts of the world, Android phone owners will use a forked version of the Android working system that has a different app store. But the Google Play Store has a extensive download base in Japan, according to Lexi Sydow, market judgements manager at App Annie.

Currently, both Google and Apple take a 30 percent cut of in-app purchases, and Google order start taking a 15 percent cut of subscriptions in 2018, mirroring Apple’s 2016 switch.

But as much as that upcoming do battle with reduction is a boon for developers, it highlights a risk: As quickly as Apple or Google can certainly affect developers, they can just as easily change pricing or put new rules.

Think of the downturn Zynga suffered when Facebook manufactured some tweaks in 2012.

Sourcing so much of their revenue from two app co-op give credence ti means that these gaming companies are uniquely vulnerable. Because, although these Japanese braving companies are heavily reliant on Google, the relationship certainly doesn’t in business both ways.

Alphabet doesn’t specifically break out what portion of its revenue comes from the Play Store — it lumps those takings together with money from its swelling Cloud business and metal goods sales. In Q3 of 2017, Alphabet’s so-called “Other Google revenues” hit $3.4 billion. That’s sole 12% of its total revenue. If you tried to slice up how much of that be relevant to from the Play Store, and in particular from Japan, the number wouldn’t be consequential.

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