The biggest mistakes AAA studios make when entering Japan
Western publishers routinely waste millions trying to crack the Japanese market by treating it as an afterthought.
Written by
Colin Bell
When a major Western publisher spent $15 million marketing their latest AAA title in Japan last year, they projected first-month sales of 500,000 units. They sold just 38,000. This catastrophic underperformance isn't an anomaly—it's a pattern we've seen repeatedly as Western studios attempt to crack the Japanese market.
Through our work with dozens of publishers and developers, Carter Gaming Lab has identified the seven most costly mistakes AAA studios make when trying to enter Japan. Understanding these pitfalls could save your company millions in wasted marketing spend and lost revenue opportunities.
1. Treating Japan as an Afterthought
The Mistake: Developing a game for Western markets first, then adding Japanese localization as a final step.
The Reality: By the time localization begins, core design decisions have been locked in that may fundamentally clash with Japanese player expectations.
"We frequently see games where critical systems—UI flow, control schemes, progression mechanics—are designed with Western players in mind and can't be meaningfully adjusted during localization," explains Colin Bell, Project Manager at Carter Gaming Lab. "These elements often create friction that perfect translation can't fix."
The Solution: Integrate Japanese cultural considerations into the design process from the concept stage, not just during localization.
Impact: Games designed with cross-cultural awareness from the start typically achieve 3-5x better performance in Japan with minimal additional development cost.
2. Misunderstanding Market Size and Value
The Mistake: Viewing Japan as a "small market" that doesn't justify significant adaptation investment.
The Reality: Japan remains the world's third-largest gaming market and a disproportionately valuable one for certain genres.
"We often hear executives say they're focusing on 'larger markets' like China and the US," notes Alejandro Lopez, Senior Account Manager at Carter Gaming Lab. "But this overlooks both Japan's direct market value and its influence throughout Asia."
By the Numbers:
Japan's gaming market reached $21.9 billion in 2024
Japanese gamers show higher monetization rates than US players across most genres
Successful Japanese launches often "halo" into South Korea and other Asian markets
The Solution: Properly value both the direct market opportunity and strategic importance of Japan.
3. Relying on Translation Alone
The Mistake: Believing that high-quality text and voice translation equals effective localization.
The Reality: Language is just the surface layer of cultural adaptation.
"Perfect translation of a culturally disconnected experience is still a disconnected experience," explains Ryoga Tsubaki, Project Coordinator at Carter Gaming Lab. "We've seen games with flawless Japanese that still failed because the underlying game systems didn't align with player expectations."
Beyond Translation:
Control schemes: Button mapping conventions differ significantly between markets
UI presentation: Japanese players typically prefer higher information density
Feedback systems: Different expectations for visual and audio reinforcement
Content pacing: Tutorial length, story delivery, and gameplay introduction timing
The Solution: Complement linguistic translation with systematic cultural adaptation.
4. Misreading Audience Preferences
The Mistake: Assuming Japanese players want the same features and experiences as Western players.
The Reality: Japanese gaming culture has evolved with different priorities and preferences.
"Western publishers often emphasize features that simply don't resonate with Japanese audiences," says Shoun Kawano, professionally licensed gamer and researcher at Carter Gaming Lab. "Things like vast open worlds, branching narrative choices, or complex character customization often test poorly with Japanese players who may prefer more guided experiences."
Key Preference Differences:
Progression systems: Japanese players typically prefer more structured, predictable advancement
Social features: Collaborative competition often tests better than direct competition
Character design: Stylization priorities differ significantly from Western markets
Risk/reward balance: Different tolerance for punishing mechanics depending on presentation
The Solution: Test core gameplay concepts with Japanese players before full development.
The Path Forward
For AAA studios serious about succeeding in Japan, Carter Gaming Lab recommends a five-step approach:
Integrate cultural consideration from concept stage: Include Japanese market perspectives when core mechanics are being defined.
Test early and iteratively: Don't wait until localization to get Japanese player feedback.
Adapt systems, not just content: Be willing to modify gameplay elements, not just translations and art assets.
Develop market-specific marketing: Create positioning and creative specifically for Japanese sensibilities.
Localize your analytics: Ensure you're measuring what matters to Japanese players, not just applying global KPIs.
"Japan remains the gaming center of the world," concludes Lopez. "For studios willing to invest in understanding its unique gaming culture, it offers not just significant direct revenue but valuable insights that can strengthen games globally."
For more information on how cultural testing can help your game succeed in Japan, contact Carter Gaming Lab.
