By Dr. Serkan Toto – On Japan's Game Industry

Japan’s Blockchain Gaming Industry: A Primer


Even before establishing my consultancy Kantan Games, I have been active in the Japanese game industry since around 2008 – and a lot has happened since that time.

Now, here is what I believe is one of the first comprehensive overviews in English on Japan’s blockchain gaming industry (note: nothing below is legal or investment advice).

Japan’s Cryptocurrency Industry – Very Quick Summary

For brevity, I will refrain from going into details about Japan’s general crypto market, but some key bullet points are:

  • Early on, the Japanese government embraced crypto as the possible next frontier in global finance, a field the country lost to other Asian territories over the last decades
  • Following a string of hacking-related and other incidents that shook the public, the government has started regulating the market harder
  • On the top end, residents need to pay 55% tax on crypto gains if their annual income including the gains exceeds 40 million yen (US$335,000)
  • The number of exchanges legally active in Japan is very small (Coinbase operates here under a joint venture with local mega bank MUFG)
  • The number of coins that are government-approved for trading hovers around 40 (Enjin was the only gaming-related one for a long time and was just followed by DEAPcoin)
  • Still, the Japan Virtual and Crypto Assets Exchange Association says Japan boasted a roughly $1 trillion crypto trading volume through local exchanges in 2021
  • Startups and established companies are entering the crypto market at a rapid clip, targeting a range of different segments: NFTs, marketplaces, gaming, payments, etc.
  • At the same time, corporate Japan is also increasingly looking at the space, i.e. the local mega banks, insurance companies or traditional manufacturers

Japan’s Blockchain Gaming Industry: Start And Size Today

It is difficult to pinpoint an exact date, but I believe there is a broad consensus Japan’s blockchain gaming industry started in 2018, a year after the release of CryptoKitties.

In November 2018, crypto RPG battler My Crypto Heroes launched on the Ethereum blockchain, Japan’s first “big” homegrown crypto game (other Japanese titles such as Crypt-Oink deserve honorable mentions as they came out earlier that year).

Sizing the Japanese blockchain gaming market proves to be more difficult, but there are some pointers.

The Japanese gaming market is the third largest in the world, at US$22.1 billion according to Newzoo – or roughly 13% of the global total.

Combine that with a rich history in gaming, the aforementioned US$1 trillion in yearly crypto-trading volume, the world’s eleventh biggest population (at 126 million), the world’s No. 3 economy, a gamer audience of around 53 million people (as estimated by local market research firm Kadokawa Game Linkage) – and you land at what probably can evolve into a significantly scaled blockchain game market in the near future.

Legal Matters Around Blockchain Gaming In Japan

I have no legal background, so I always recommend to DYOR and get professional support – no legal advice here.

Crypto is generally legal in Japan (as opposed to some other Asian territories), and Japan’s Payment Services Act and Fund Settlement Law was changed as early as 2016 to establish cryptocurrencies as legal tender for payment.

For blockchain game companies, operating studios in Japan under local laws means dealing with grey areas that can complicate or simplify their business, depending on each company’s situation and appetite for risk.

For instance, some “traditional” game companies might struggle to properly integrate their crypto-related financial numbers into their books – especially the publicly traded ones.

Another murky area is gacha (known as loot boxes in the West), the by far most lucrative monetization technique used in Japanese mobile games.

My understanding is that the consensus in Japan currently seems to be that if the item inside the box can be sold off for financial gain, the underlying gacha system is considered to constitute gambling – which is illegal in Japan.

In traditional mobile gaming, Japan has a history not only with problematic gacha but also with “virtual items” (not NFTs) being sold illegally off-platform, which is why authorities here are more alert to these particular topics than elsewhere.

Main Blockchain Game Companies In Japan

Generally speaking, I believe that clearer and softer regulation would lead to a more vibrant blockchain game industry in Japan – especially given the aforementioned background of the country as a massive gaming and early crypto hub.

Right now, Japan’s blockchain gaming landscape is still growing and generally consists of:

  • Established mobile game companies going into crypto (public and private)
  • Established video game companies going into crypto (all public)
  • Crypto-first game studios (startups or relatively new companies)
  • Foreign crypto game studios targeting the Japanese market “remotely”

For brevity reasons, I cannot list all companies and cannot go into details as to how each of these companies engage in crypto, NFT, metaverse or the blockchain – but typical activities include investments, partnerships with crypto-only companies, game development, NFT offerings etc.

Starting with the first category, the top listed mobile players engaged in crypto, NFT or the blockchain in general include powerhouses such as mixi, CyberAgent, LINE (now part of Z Holdings) or Nexon (from Korea but headquartered and listed in Japan).

Smaller listed mobile game companies active in this area include gumi (perhaps Japan’s most prolific crypto-focused developer), Mobile Factory (which started pivoting towards crypto a few years ago), Ateam and KLab (both just announced an entry into the market), Aeria, Drecom or AltPlus.

There is also an increasing number of private mobile game companies in Japan looking at the crypto space, also because the competition in their traditional market has become very harsh over the years.

The video game studios belonging to the second category are significantly more prominent outside Japan, and as such, their announcements about entering the world of blockchain gaming alone already created a lot of publicity in the West.

In that category, the main mentions include Bandai Namco, Square Enix, Konami, Capcom and Sega Sammy.

In other words, in Japan’s top tier of video game companies, only Koei Tecmo, Nintendo and Sony are still missing in this list.

In the mid- to low tier, most studios are still relatively hesitant when it comes to any crypto-related activities.

The main players in the third category (“crypto-first studios”) include gumi subsidiary double, CryptoGames, early players such as Platinum Egg, BOBG (just launched) or Japanese-led Digital Entertainment Asset (both incorporated in Singapore).

In terms of the last category of foreign crypto game studios targeting Japan, one particularly successful player is The Sandbox with its eponymous metaverse (part of Hong Kong-based blockchain industry powerhouse Animoca Brands).

Main Blockchain Games Made In Japan

At this point in time, Japan is still waiting for a homegrown blockchain game to become a true global hit.

The titles listed below were somewhat popular a while ago in Japan and elsewhere, but the vast majority of their users have moved on by now unfortunately:

  • The aforementioned battler My Crypto Heroes (by double
  • Card battler Contract Servant (by Axel Mark)
  • RPG PolkaFantasy (by FantasyTech)
  • Trading card game CryptoSpells (by CryptoGames)

Going forward, there can be no doubt that the more established game developers will create games specifically designed for the blockchain, with Square Enix bringing its classic RPG franchise Dungeon Siege to The Sandbox soon as one example.

In Japan, too, we are still only in the very early days of blockchain gaming.

Get in touch over Email (serkan @, LinkedIn, or Twitter.

About the author

Dr. Serkan Toto

I am the CEO & Founder of Tokyo-based Kantan Games Inc., an independent consultancy focused on Japan’s game industry.

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By Dr. Serkan Toto – On Japan's Game Industry