You could say the metaverse started with gaming and is highly reliant on technology. Some of the biggest game brands call Japan home. Additionally, the country is known to be a tech leader in the world. This is why the metaverse has incredible potential in this region.
In fact, there have been notable integrations of the metaverse in various industries and segments in Japan. But this is still new, and the future remains unpredictable. So, explore this entry as it will cover the outlook of the Japanese markets for Metaverse.
What Is The Metaverse?
The word ‘metaverse’ is frequently thrown around in conversations, articles, and reports. It has become increasingly popular with the transition of Facebook into Meta. You will find thousands of articles and videos trying to dumb the phrase down for easy understanding, but they all agree on one thing: the metaverse is a new world.
The metaverse is not one thing but a collective hyper-realistic and visual environment that immerses its users through technology. People can live and interact with each other through customized 3D avatars. Right now, the metaverse is disconnected. Platforms that offer entry into the metaverse are separate from each other. For example, Fortnite and Roblox are separate, but the goal is to centralize. The objective is to make the metaverse a single entity with different platforms, the same way there are multiple websites on the internet.
Upon hearing this description, most people believe that the metaverse is all about gaming. But it is much broader. In the same way, Google is not the internet, neither is VR gaming the metaverse.
It is a world where you can trade, buy or sell goods and services, interact, and more; think of your online personas coming to life on a 3D platform and being able to interact with other personas. It is why many have called the metaverse a world inside our current reality.
Why does The Metaverse Matter To Businesses?
Any improvement or change in technology and the internet will affect how businesses run, and consumers behave. Online shopping and retailing seemed impossible a few years back, but now companies run efficiently without stores or offices while buyers find it impractical to visit physical stores.
The metaverse is important to businesses trying to reach their audiences. If your audience is aged 15 to 30 years old, they have or are transitioning out of social media to the metaverse.
A good example of this is when in 2020, Fortnite hosted rapper Travis Scott for a concert in the game. It was a spectacle that perfectly glimpsed the metaverse. It was witnessed by millions of virtual attendees connecting from all over the world.
Similarly, Nike launched a virtual world inside Roblox, a popular video game. According to Nike’s Chief Executive and President Jack Donahoe, during a Q3 earnings call, the virtual world has received over 7 million visitors.
The metaverse has been in the works, meaning businesses must catch up and create new ways to interact with users in these virtual worlds. It is necessary to remain relevant in this changing space.
The Metaverse In Japan
Considering the metaverse relies heavily on improving technology, you would expect technologically forward and developed countries would be front of the lines in anticipation of the virtual world.
Surprisingly, surveys show that the popularity of the metaverse is higher in emergent nations than in high-income counties. Countries like China, India, Peru, and Saudi Arabia are more open and excited about engaging with extended reality.
However, the metaverse is yet to be popular in countries like Japan, Canada, and Great Britain. Based on this data alone, it seems that the Japanese community is a blue ocean where anyone with the capability to market the metaverse will potentially make good profit. Think of Japan as an untapped market with endless potential for the metaverse considering the country’s technological forwardness. Foreign countries can easily penetrate the Japanese market with the right metaverse product and marketing strategy.
It comes as a shock to many that Japan is yet to be immersed in the metaverse but this can be explained by the industries and platforms most likely to offer access to the metaverse.
Not every industry will change with the adoption of the metaverse. In fact, experts predict that five main industries will transform because of the metaverse. But we will only discuss gaming and ecommerce as they have made significant progress in the metaverse:
Games have already proven themselves leaders in the metaverse with multiple concepts like 3D avatars and building worlds. Companies like Epic and Roblox Corporation lead in immersive online games with Fortnite and Roblox.
Data shows that metaverse in the gaming market is expected to reach US$ 40 Billion by 2030 with the dominating region being the US. So, is the gaming culture on these platforms as prevalent in Japan as we assume? According to 2021 data from Roblox, Japan was not even in the of users with the most engagement time in Roblox. But this can probably be explained by the age group distribution in Japan’s population.
Studies show that Japan has one of the world’s largest populations of senior citizens. Additionally, most of the population is above 30. And, they make up the primary consumer market for any product, including the internet.
Therefore, they contribute to many internet personas on social media and other platforms. But as mentioned before, people between the age of 15 and 30 are more likely to be in the metaverse than any other age group. These are the Gen Z and Millenials. So, while the young Japanese population may be interested and are participating in games like Fortnite, their contribution as creators can barely match up to the country’s overall population. This could explain why even though Nintendo and similar game makers come from Japan, their sales are more prevalent in the Americas.
Shopping in the metaverse is one of the expected excitements of its development. Online shopping is huge, dramatically increasing during the pandemic. Many brands have found ways to get in on it.
For example, Amazon launched Room Decorator, an AR shopping tool that lets you see what furniture will look like in your home. Warby Parker also has a similar virtual try-on app which lets you try on their frames before purchasing them.
So how will the Japanese market respond to the ecommerce metaverse development? Japan is had an ecommerce revenue of US$128.3 billion in 2021. It is the third largest ecommerce market, ahead of the US and UK. And the market is predicted to increase at the global growth rate of 6% in the coming years.
Considering Japan’s readiness for the metaverse characterized by technological forwardness, and online shopping, it is easy to see how metaverse ecommerce will be adopted by this market. Japan has great potential for metaverse ecommerce.
So, What Does Japan’s Metaverse Look Like?
Japanese companies are investing in the metaverse. In fact, there have been notable steps in the past few years, with the most significant being:
— Hakuhodo Virtual Ads
One of the best ways for companies to make an impact on the metaverse is by making consumers engage with their content. From personalized content to convenient services in the metaverse, as they play or build. Users need something to engage with, and ads are the quickest way.
Tokyo Ad agency Hakuhodo DY Holdings will proudly become the first company to sell metaverse advertising in Japan. The company plans to sell in-game ads in virtual worlds in Roblox.
There is still limited information on this, so it is anyone’s guess how it will go. But there is potential for the company to make a lot of money. In addition, Hakuhodo DY Holdings is not the only company seeing the potential in Japan metaverse.
— Metaverse courses At The University of Tokyo
The University of Tokyo or Todai will offer multiple courses later in 2022 to a range of people to understand the fundamentals of the metaverse. This new project aims to address the shortage of personnel with the skills to keep up with the new technology.
The programs will be directed to junior and senior high-school students, plus those already in the workforce. This is in line with the age distribution of people interested in the metaverse or participating in it.
The courses will be under Todai’s Faculty of Engineering and engineering-related graduate schools rather than being an independent faculty.
The program plans to target more female students as they are poorly represented in engineering programs at the university.
It is also worth noting that this is not the first time the university has ventured into the metaverse. In January, the university president Teruo Fujii gave a lecture and online orientation for incoming students.
The Future Of Japan Metaverse
The market outlook on Japan’s metaverse does not end there. More plans are rooted in various industries to incorporate the platform to improve users’ lives or create new ways of doing things:
— H2L’s real-life plan
A Sony-backed startup, H2L is planning to deliver real-life pain to users in the metaverse. The Japanese company has built a product that comes with an armband that users can wear as they enter the virtual world.
The band detects human muscle flexing, enabling the avatar in virtual worlds to copy the user’s movements. The detection will also allow users to feel the presence and weight of objects. The goal of this technology is to enable the virtual space to turn into a real world.
The technology uses electrical stimulation to mimic sensations and control the arm muscles. Emi Tamaki, chief executive and co-founder of the Tokyo-based company, expects the product to have multiple applications, not just for playing games.
— STYLY’s Real-World Metaverse
STYLY is a cloud-based XR platform from Psychic VR Lab. It has supported VR and augmented reality (AR) for a while, and they plan to update their platform later in 2022 to allow users to integrate mixed reality or MR in the urban community.
The feature will allow STYLY to take 3D mapping data of cities. The artists can then use the data for visual applications like putting artwork on the side of buildings. The company’s plans so far support six Japanese cities; Tokyo, Osaka, Kyoto, Sapporo, Fukuoka, and Nagoya.
The CEO of Psychic VR Lab, Masahiro Yamaguchi, said they plan to develop STYLY as an operating system for the metaverse.
It is worth noting that these are not the only plans of the metaverse in Japan. Doctors in Japan are exploring ways to reach Hikikomori (social recluses) in the virtual setting. Other companies are creating 3D anime avatars, which should receive a good response given the anime culture in the country. There is no shortage of metaverse integration in Japan.
Japan And Cryptocurrency
The metaverse and cryptocurrency go hand in hand; after all, virtual reality needs virtual money. The evolution of the metaverse will impact the way authorities will develop cryptocurrency.
There is much evidence that suggests Japan is open to cryptocurrency. In fact, the number of merchants accepting cryptocurrency in Japan as a mode of payment has increased significantly since 2018.
In addition, Japan recently passed a milestone law that seeks to protect crypto investors. Such efforts show that crypto will be a key part of business processes, including sales and marketing. Regarding the metaverse:
The cryptocurrency market has been on hold for a while since investors are cautious in making investments after the meltdown. But companies like Mars4 are thriving thanks to their play-to-earn project.
Mars4 is a metaverse game that has been gaining sales in Japan. They collaborated with key opinion leaders such as Daisuke and Crypto Train to engage the Japanese market.
In the game, users purchase a piece of Mars Land, and they will have to grow and transform their land to increase their chances of survival.
—Sandbox’s SAND Token
Since May 2022, the SAND token has been listed and available in Japan through Coincheck. It is the first metaverse cryptocurrency available for purchase by Japanese citizens. This is a huge milestone since Japan has strict regulations on cryptocurrency.
The collaboration with Coincheck, A Tokyo-based Japanese cryptocurrency, certainly made things easier, and now Japanese people can purchase the currency when visiting platforms in the multiverse.
The virtual world has created an interest among consumers globally. Japan is a blue ocean. The lucrative Japanese markets hold potential for metaverse companies to make a profit.
The lucrative nature of the market will thrive in the coming years since Japan is a leader in technology. It will also enhance through educational programs, shopping, pop culture, and games.
Based on the progress, with foreign companies targeting the market and local organizations getting their piece of the metaverse, it is possible that Japan could soon outdo the top countries.
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Irep Inc. is an award-winning global digital marketing agency based in the San Francisco Bay Area. Our headquarters are in Tokyo and our network spans more than 20 countries. In Japan, we are ranked No. 1 for performance-based marketing. We also offer highly specialized market entry, as well as integrated marketing and localization services. Since 1997, our data-driven solutions have effectively led our diverse international clientele to continuous success in Japan, Asia, and beyond.