Kin in Japan
Last month, following the Kin/Unity announcement, we travelled to the Unite Event in Tokyo to explore the gaming community, meet potential partners, and research business opportunities. But the trip to Japan didn’t simply involve a 12 hour flight (with a layover), it also involved a considerable amount of research and planning in terms of understanding the market and its unique needs. What follows is the story of how we got to Japan (metaphorically) and some fun things we learned once we were there (literally). And, we even put together a little video from the trip — but we’ll save that for the end.
The research & planning process
The research and planning process included both broad based research with regard to Kin and gaming, as well as what is unique about the Japanese market. In order to put together a value proposition for mobile game developers, I worked together with our strategy, partnership, and research teams to map the opportunities and challenges. We started with developer interviews and desk research, but quickly recognized that research would need to be an ongoing effort embedded in the product lifecycle and that our meetings with potential partners would offer many of the answers we were looking for.
Here are some of the initial questions and research topics we raised:
- The developer: What are gaming developers monetization and user retention pains? What are the competitors offering in terms of monetization or retention features (We looked at both crypto solution and classic monetisation solutions)? Can we enable game developers to create the greatest value for their users? How can developer create value for gamers? What is valuable for gamers? Can the developer reward power users in the game community outside of the game?
- The experience: What is the experience we offer? Is it Kin branded? Is it customizable? Does it include in-game materials? Is it purely payments service or does it include a UI? Where in the flow can Kin help (user acquisition, retention, engagement, monetisation)? Should we target social & multi-player games? Can we offer users to share value? Create P2P based on interest/friendships ?
- The users: Who are the users? How do the different personas interact in the app? At what stage of the game do we want users to get exposed to Kin? What type of user should be exposed (new, non paying, paying etc)? How often can user interact with Kin? What does the journey look like?
- The technology: What differentiates crypto from virtual currency? Is joining the Kin ecosystem enough of a value proposition (‘Readymade Ecosystem’)? What’s the benefit of using Kin over existing virtual currency (Kin has real value, Kin can be used across platforms/in other digital services, Kin is crypto — users might engage more. Kin can unlock new gaming experience. Kin can facilitate PvP experiences. Kin can be used for social interaction).
A few Initial research findings
- People spend 43% of their mobile app time on games
- Time spent on mobile gaming apps is increasing every year. The amount of time spent on mobile gaming apps increased from 32% of the total time on spent on smartphones in 2014 to 43% by the beginning of 2017.
- From 2016 to 2017, time spent on mobile gaming apps increased by 15%. In the U.S., an average adult will spend approximately 23 minutes per day playing games on a mobile app.
- U.S. gamers play an average of 3.6 mobile games per month, and 1.3 games on a daily basis.
- The number of mobile game players worldwide reached ~2.1 billion last year (and expected to reach 2.7 by 2021)
- Games drive 75% and 90% of the total App Store and Google Play revenue, respectively.
- The app discoverability issue has yet to be solved — Getting featured by the App Store/Google Play is still the only tried-and-true path to success.
- 53% of developers don’t even think about a monetization strategy before a mobile game is already “late in development.”
Some insights Into market growth
- Games represented nearly 80% of total worldwide consumer spend for combined iOS App Store and Google Play in 2017, while accounting for roughly 35% of total worldwide downloads.
- Rapid growth in a few key markets, most notably China, Japan and South Korea, helped fuel mobile gaming’s ascent in 2017. Although all regions experienced growth, over 60% of mobile game spending in 2017 occurred in Asia-Pacific, a region that continued to gain share
- With a clear majority of revenue from the top PvP mobile games coming from Asia-Pacific, it will be interesting to see if PvP titles can significantly increase their popularity in North America and Western Europe in 2018
Why we think Japan, gaming, and Kin are a winning combination
While we understood we had numerous open questions and much to learn from our in person meetings, we did arrive at a working hypothesis as to why Kin would be a good fit for gaming in Japan. We broke it down this way:
- What’s the challenge? Unlock new in-game engagement and monetization opportunities
- What’s the opportunity? Kin is in a unique position to offer a low barrier entry-point for blockchain technology, allowing app developers and digital services access to an entire ecosystem with new user experiences and revenue streams by rewarding developers for enabling Kin transactions
- What’s the value proposition? Drive revenue by Increasing engagement & retention without the game experience. Access to Kin’s fair and decentralized rewards ecosystem.
So then why Japan? Well, there are a few key points that make it such a natural fit:
- Mobile gaming revenue in Japan has grown by approximately 35% year on year, surpassing the US for three years in a row.
- Japanese gamers are a highly engaged, highly monetizable audience
- Japan is positioning itself as a leader in fin-tech and payments innovation — source
- Tokyo Metro Government is positioning itself as the best place to invest in and build blockchain and crypto projects. Most recently, running a fully funded accelerator program for businesses building in blockchain — source
- Japan is the first to offer a regulatory framework for digital currency exchanges — source
- In April, Japan was the first country to recognize virtual currencies, explicitly citing Bitcoin, as legal tender — source; source
- Japanese market is leader in Bitcoin holdings (source) with Japanese exchanges working to add more exposure to alt-coins.
What We Learned From Our Trip
I will be writing a comprehensive follow up post about the the Kin value proposition that for gaming that evolved from the trip (stay tuned), but I thought I’d first share some initial reflections on the experience itself, in terms of a few, occasionally hard learned, pointers for anyone who may be heading to Japan for the first time.
- Don’t offer your hand for a handshake and when in doubt — bow
- When entering a meeting room — always sit on the opposite side of your hosts (don’t mix companies — each company takes one side of the table).
- Business card exchange is a big thing. Hold the cards in both hands, with your name facing your partner. Say your name, bow and exchange. Don’t put the card in your pocket, always have a cardholder with you.
- When meeting partners they’ll walk you to the lift or see you out. They’ll wait until lift door shuts. They’ll keep bowing until it shuts. Bow back. Don’t stop.
- Be aware of the time — they will never note the time but it doesn’t mean they are free to continue. Notice the time the meeting is supposed to end, and if you’d like to continue , ask if they are free to allow the meeting to run over.
More reflections and product insights are on their way, but in the meantime if you want to see more, Check out this video, by Doron Barsky:
