State Of The Japanese Eroge Market



The games press often covers the mainstream games market in Japan, but rarely does anyone ask about other segments of the "otaku" industry — visual novels, manga, doujinshi and so on. The truth is, the market for each of these products is shrinking, which has been a cause for concern for their respective publishers in recent years. As a result, most companies are playing it safe, scaling back creativity and taking advantage of tried and true methods of generating revenue.


The visual novel and eroge market is no exception to this phenomenon and considering it is a niche segment of the games market even in Japan, we very much wanted to know what’s on the minds of the people at the forefront of this industry. Recently, I caught up with a marketing distributor (hereby referred to as Distributor A) that works with various visual novel publishers, to get a better feel for the state of the eroge market in Japan. The catch was, I was asked to refrain from publishing the names of specific games and publishers that this distributor’s firm works with to avoid risking any controversy with their clients, in exchange for a surprisingly frank interview.


Let’s begin. Could you tell me a little bit about your company and what your role is? You’ve said that it’s a marketing distributor for various visual novel publishers — what does that entail?


Distributor A: We manage the stock of their games and ship them out whenever we receive orders from the retail stores.


That is only the boring distributor side of our task, and most of our time is dedicated to closely interacting with the stores, and making sure that the titles we are selling are properly promoted. We send them basic things like posters and fliers, to thick panels that hang from the wall that we sometimes build by hand. One of the important responsibilities we have is to be a middleman to borrow space at the stores to hold promotional events.




So, something that’s interesting about being part of the marketing initiative is that you need to gauge demand for different products beforehand and also how to best promote them. Do you guys play a role in market research or is that left to a different team?


Hmm, yes we do follow the news and understand what’s popular out there to an extent. But first of all, it is the game company’s decision on what kind of game they want to create. Of course, since it’s a business, they have to come up with contents that would sell to get the project started, but also at the same time, the originality of the staff comes into play. Our job is, no matter what kind of genre or category their game is, we try to secure a location at physical stores, or the Internet at times, to get it as much exposure as it needs.


Second of all, we work in the niche world of adult bishoujo games and visual novels. Sometimes, a game will be popular enough to get an anime spin-off or console ports, but that’s only like the tip of the iceberg. There are dozens of games coming out every month. Even though there are always new fans that get into bishoujo games after watching an anime series or something, we are generally working with a limited number of customers who make actual purchases. It’s actually difficult to catch the eyes of people in this flooded market.


It would be simple if the game had an unequaled appealing artist, or the game company or staff have a successful history, but other games become one of many, no matter how great of a story or content they may have. Because of this reason, it may be difficult just to get someone to play a demo. The only person who really knows how good the game is, is its creator, and it may even be crucial to ask a store staff at the end of the line to consciously promote the game, when it’s not even out yet. That’s why we actually have to go back and rely on visual things like promotional videos, posters, store extras, and events.




You said that the market is flooded but also that there are a limited number of customers actually making purchases. Do you think this leads to a tendency on the part of developers to make the same kind of game over and over again because there’s a higher chance of selling product this way? For instance, it seems like we’re seeing a lot of moe style games these days…


Yes, I see the developers making the same kind of game over and over, because that’s actually what the consumer wants and what sells. One game developer we work with is well known for their school adventure title. Now, they have been releasing many versions and expansions for this series. However, if you were a fan of any series, wouldn’t you want to enjoy the same characters and world setting rather than putting in the effort to move on to a completely newer series, and risking not enjoying it? (This is called "hitting a landmine" in eroge purchase lingo)


But its not like some companies aren’t trying other things out. For example, some companies are trying out different genres within the bishoujo game market, such as a RPG-styled adventure games. Even though people put in quite an effort to develop and promote these games, the demand for known franchises is still much greater.


The word “moe” is pretty broad, but it is a necessary element in an h-game that sells. You can even say that a game didn’t sell because it wasn’t moe enough! Enjoying a fun time with the characters during an awesome story could be one type of moe, but some people prefer titles where they put forth a certain fetish (such as younger sister, childhood friend, etc.) before anything, and that’s moe to them. Nevertheless, it’s certain that the ones with the prettiest art style have an advantage.


One factor you can’t forget in the h-game market is that the games are expensive. A normal full price of a game goes for 8,800 yen (that’s 9,240 yen with tax included). That’s over 100 U.S. dollars with today’s exchange rate. That’s why the consumers can only purchase a limited number of games each month, even making use of the second-hand market. Not to mention, these games take time to beat. Recently, it’s not uncommon to see developers making smaller games that come out at a faster pace, too — sometimes in increments of 3 months. It may sound weird, but in this industry, unless the game is superbly good and receives perfect reviews afterwards, the number of pre-orders determine the value and life of a title, because that’s the only time we can actually borrow the space to promote the game at the stores and media.




It’s interesting that you mention price and time as two factors that might deter people from playing these games more. These are issues faced by the more "mainstream" section of the industry as well. In fact, cheaper and shorter episodic content is something a lot of publishers in the West are experimenting with. Is this something eroge publishers in Japan are interested in exploring, going forward?


Generally, cheaper and smaller games don’t help the industry. The developers and the stores are able to stay in business thanks to the profit margin between the retail price and production cost. If they lowered the price, they’d need to sell as many units in order to compensate for that price. At the same time, it means they will no longer be able to put in the effort to produce a high-quality game.


For example, a big sale event might make a consumer happy at the time, but once they get used to the lower price point, it would be difficult to sell something at the original price. You can go from an expensive price to a cheap price, but not the other way around. I think it’s like that in any industry, but that’s one of the things that we need to keep an eye out for, as someone that stands between the developer and the store.


So, if reducing prices and making smaller games isn’t an option in your opinion, what can you do in order to expand the audience for the genre? Japan isn’t reproducing at a very high rate. In this situation, when the existing market is so saturated, what measures do you think can be taken to help make the niche more profitable? Are the publishers you’ve worked with thinking of long-term plans in this regard?


Actually, I personally think this industry has reached its limit in terms of the consumer fan base. We’ve done everything in terms of marketing, and now companies are simply eating into each other’s profits, in which case its maximum size will never grow bigger. Not to mention, the same customer base is usually also a fan of console games and anime. The developers’ goal is still to make a good and attractive game, but now they are putting in more effort than ever to keep the fans they gained entertained as long as possible, so they will be interested enough to try out their future titles.

Ishaan Sahdev
Ishaan specializes in game design/sales analysis. He's the former managing editor of Siliconera and wrote the book "The Legend of Zelda - A Complete Development History". He also used to moonlight as a professional manga editor. These days, his day job has nothing to do with games, but the two inform each other nonetheless.