While the rise of smartphone game apps helped to expand the Japanese video game market as a whole, it is also thought to contribute to the long-term decline of other parts of the industry, such as classical handheld and home consoles. Compared to consoles, smartphone game applications profit from a high potential user base, as consumers do not need to buy specific hardware to play games. Games are usually free to play, but often feature the possibility of in-game purchases for additional content, such as items or characters. This type of monetization was pioneered by companies like DeNA and GREE in the mid-2000s and has since become a staple of the mobile gaming market. As Apple is the leading brand among mobile devices in Japan, the Apple App Store is of high importance to publishers. Among genres, puzzle, action, simulation and role playing games enjoy high popularity in Japan.
Accompanying the growth of the mobile game market is a shift towards online distribution. Video games constitute the main driver behind the rise of content distributed online in Japan, making up more than two thirds of consumer expenditure on online content. On the mobile gaming market, domestic companies like CyberAgent, Mixi, GungHo Online Entertainment and the aforementioned DeNA and GREE still play a dominant role, with the majority of recent best-selling titles coming from Japanese companies. As recent news reports have pointed out, however, foreign companies, especially from China and South Korea, are making inroads into the Japanese market.
