Japan and Korean Gaming Market Forecast

The gaming industries in Japan and South Korea, collectively referred to by Niko Partners as the East Asia market, are experiencing a period of contraction. According to the firm’s latest research, 2025 will mark the second consecutive year of decline. Despite this downward trend, long-term projections suggest gradual recovery and moderate growth toward the end of the decade.

Market Performance and Outlook

In 2024, Japan and South Korea generated a combined total of 29.1 billion dollars in gaming revenue, representing a 3.1 percent decline year-over-year. The downturn is expected to continue in 2025, with the market projected to shrink to 28.5 billion dollars, a further 2.3 percent decrease. Niko Partners attributes this decline to external factors such as fluctuations in local currency exchange rates against the dollar, as well as a broader cooling of the global games industry.

Although the short-term outlook remains negative, Niko Partners forecasts that the market will reach 30.3 billion dollars by 2029. This projection is supported by an estimated compound annual growth rate of 0.8 percent. The research indicates that while 2025 may be another challenging year for both countries, steady progress is expected over the longer term.

Japan and Korean Gaming Market Forecast

Player Base and Spending Patterns

The East Asian player base is expected to expand modestly despite the revenue decline. In 2025, the number of players across Japan and South Korea is forecast to rise by 1.3 percent to 98.4 million. By 2029, the total player base is projected to reach 101.7 million, supported by a compound annual growth rate of 0.9 percent.

Average revenue per user (ARPU) differs notably between the two markets. Japanese players are expected to generate an ARPU of 21.82 dollars, while South Korean players will account for a higher ARPU of 30.77 dollars. South Korea holds the highest ARPU among all Asian gaming markets included in Niko Partners’ research, reflecting stronger spending tendencies compared to Japan.

Japan and Korean Gaming Market Forecast

Consumer Preferences and Cultural Influences

Survey findings from more than one thousand players in both Japan and South Korea provide insights into regional preferences and purchase motivations. In Japan, 67.8 percent of respondents indicated a preference for anime-style games, highlighting the continued cultural relevance of this genre. The leading motivations for making purchases are to increase enjoyment, cited by 51 percent of players, and to accelerate progress within games, mentioned by 30 percent.

Additionally, 46.6 percent of Japanese players reported watching game streams and related content. In South Korea, responses reflect a focus on cultural accuracy and high localization standards. Hardcore players expressed dissatisfaction with games that include inaccurate cultural references, poor translations, or stereotypical character designs. Esports continues to play an important role in the South Korean market, with 24.4 percent of men watching tournaments.

Female participation is lower, with only 11.4 percent of women following esports events. In addition, 37.8 percent of South Korean players consume streaming and game-related content. Across both countries, players remain less likely than their regional counterparts to make purchases through web shops, suggesting that in-game purchase methods continue to dominate spending behavior.

Japan and Korean Gaming Market Forecast

Marketing Developments and Tools

The study also highlights recent developments in marketing tools within the gaming industry. MY.GAMES has introduced AdsAdvisor, a platform that was previously used internally for several years and is now publicly available. AdsAdvisor functions as an integrated solution for marketing operations, including creative management, predictive modeling, and business performance analysis. The tool is designed to streamline campaign execution and support publishers and developers in optimizing their marketing strategies.

Japan and Korean Gaming Market Forecast

Long-Term Perspective

While Japan and South Korea are expected to see another year of decline in 2025, the broader outlook points toward gradual stabilization and growth. Rising player numbers, higher spending levels in South Korea, and the popularity of anime-style games in Japan are anticipated to drive market recovery. By 2029, the combined markets of East Asia are projected to return to growth, reaffirming their long-term importance in the global games industry.