How Video Games Saved Japan

How Video Games Saved Japan

Video games are a key export of Japanese culture binding individuals from across the world over a love of the art but did you know that Beyond just being a cultural export that video games played a pivotal role in the rebound of Japan’s economy without the industry the nation

Would have been lost in stagnation without the Innovation income and soft power brought by the gaming industry video games are a fantastic way to have a good time and unwind but for Japan it’s bigger than that it’s a means of of economic survival today on Poseidon films we will be going over the

Incredible true story of how video games saved Japan’s economy to understand the current state of the Japanese economic Miracle we need to go back following World War I 2 Japan was primarily agrarian with its industrial infrastructure decimated the government led by Visionary leaders like shuru Yoshida partnered with the private

Sector to ignite a period of rapid industrialization investments in education bolstered a skilled Workforce and technological innovation became the Cornerstone of Japan’s Resurgence the automotive and electronics Industries in particular became global leaders epitomizing Japan’s economic Revival by the 1960s and 1970s Japan’s economy was growing at an unprecedented rate earning

It the title of the post-war Miracle it was a golden era with Japan’s GDP soaring propelling the nation to the world’s second largest economy in the background of this amazing growth a new industry began innovating a small company you may have heard of called Sega introduced an electronic-based game called Periscope in

1966 the game instantly had major success and other companies began to look at the idea of this new industry as a potential profit driver the release of pong by American company Atari helped popularize the gaming Pastime in the United States which help helped open up potential profit zones for the Japanese

Industry it was during this first phase of the gaming craze that another iconic company joined the fry Nintendo began to develop electronic toys and early versions of video game products the’ 70s saw the industry continue to grow but its next major jump in popularity came

Near the end of the decade in 1978 with the release of Japanese developed Space Invaders this game was an absolute Smash Hit and solidified the ability for game Production Studios to continuously generate Revenue Beyond just one or two popular titles Pacman Galaxia and other iconic titles caused a gold rush into

Gaming suddenly everyone whether attached to the industry’s roots or not was trying to grab a slice of the pie this led to a huge decrease in quality of video games and consoles culminating with the video game Crash of 1983 North America’s gaming industry was nearly wiped out out in this crash but

The Japanese Market with more time to have matured managed to make it through without the same level of Destruction I know with the popularity of video games now it can be easy to think that calling this a video game Crash could be hyperbolic but revenue for video games

Dropped 97% over this period in the year of 1983 Gaming revenue was 3.2 billion that is a solid chunk of change dropped to barely over 100 million the North American industry was totally devastated by 97% of business drying up in 2 years granted much of this crash was caused by

The same companies producing absolute garbage but still many people thought the gaming fad had come to pass but Nintendo was over in Japan cooking up something that would revolutionize gaming forever the North American Market is important to talk about because a lot of the revenue generated even today in

Japan from the video game industry is Reliant upon foreign markets North America is the largest video game Market worldwide so its link to the Japanese video game industry cannot be understated in 1983 at the peak of the North American crash Nintendo had released the Nintendo Entertainment System in Japan it was technically

Called the famicom system but it performed very well in Japan initially the company looked like it had made a massive blunder the first consoles had a chip issue that forced Nintendo to issue a recall this in combination with the decimation of the North American Market had Executives sweating nervously

Thankfully the recall was able to completely solve the issue and with that out of the way the famicom system went on to have soaring popularity in Japan by the end of 1984 it had become the bestselling game console in its home nation while it took a bit to catch on

It became an absolute sensation it sold over 31 million units in the nation by 1991 bringing home billions in revenue for the nation of Japan you’re probably thinking to yourself that’s cool thanks for the history of the gaming industry but how does this prove anything in terms of video games saving Japan’s

Economy and I’m very glad you asked that question you see after the success of the NES the video game Market had hit a point of what we like to call maturity while the initial fad saw unsustainable success the solidification of gaming as a cultural Cornerstone was made with the

Success of the console at this point the business infrastructure that can be built around video games begins to expand massively as companies are able to think in terms of long-term strategy instead of short-term Financial viability the amount of money accessible for research and development story creation graphic design and every

Service that goes alongside a business becomes much greater there are tons of iconic companies that had console success other than Nintendo and this video isn’t meant to downplay their accomplishments but for the sake of not having a 15-hour video with the mature gaming Market established it’s important

We get to the part of video games saving Japan if you are enjoying the video so far please be sure to press the like button and subscribe this is only the second video we’ve ever posted and we’re really hoping to hit 100K Subs by the end of the year by 1995 the gaming

Industry had become a 20 billion industry and Japan had a healthy chunk of that Revenue attached to its companies the economy of Japan was also Marching In Step healthily growing with a yearly GDP of 5.45 trillion the growth of the gaming industry at this point would already be impressive but it is

The delinking of the general Japanese economy and the gaming industry that is the main focus of today’s video this delinking began in 1995 and continues to this day Japan is an economic superpower that is for certain but for the last 30 years they have been on the economic

Equivalent of a leisurely float down a river total GDP is actually down $1.2 trillion a year compared to 1995 it is still one of the world’s largest economies but the nation’s total economy has been shrinking for 30 years by comparison The Gaming revenue of Japan has increased steadily 6 to 10% a

Year throughout that same time period in an era where business Across the Nation is steadily shrinking the gaming industry is a rare bright spot that continues to make gain revenue for the country in fact video games and their related Revenue now make up over 5% of the total economic output of Japan

Granted this number includes everything from marketing business services real estate offices game production and more however I don’t think the government of Japan cares who the taxes are being paid by as long as they are being paid it’s glamorous to talk about the game designers and artists that are employed

By the Japanese gaming industry while they are definitely the stars of the show it’s important to remember that companies like Square Enix generate billions in revenue and have teams of accountants cleaning staff financial advisers managers and more employed as well there is also the naturally Innovative nature of gaming creativity

By default breeds Innovation and that Innovation isn’t magically locked away it also is a huge booster of exports While most Nations R mostly on their internal economy most gaming companies are massive internationally this acts as a sort of stabilizer to their financial viability even if the economic situation

At home is Rocky they can maneuver on the international stage it isn’t like the money generated by the gaming industry exists in a vacuum it is spread through the Japanese economy in a time where most Industries are struggling there is also an economic impact that

Can be hard to measure which is just how much the technological advancements that that have come from gaming have benefited Japan video games need a lot of complicated technology to function properly and you would be shocked how much military and infrastructural Equipment has its roots in gaming for

Example the entirety of 3D imaging technology was originally designed for video games and now is used in Industries across the business World artificial intelligence is another technology that has a lot of its roots in development to make better NPC characters that would be less predictable while it can be hard to

Attach a literal dollar amount to a concept or an idea it is obvious that Japan would greatly benefit from having a technology incubator in the nation while some countries have to fight the issue of brain drain where all of their brilliant population goes to other places Japan has a homegrown economy of

People proficient in Concepts that are crucial outside of gaming if tomorrow Japan had to reallocate resources to developing artificial intelligence they have local talent they have the knowhow they don’t need to build it out from scratch some other inventions that have their roots in the Japanese gaming industry are voice recognition some

Computer networking features and augmented reality if you think that there is no economic advantage to having the talent to develop this technology you’ve got your head in the sand but even between the billions of dollars in growth during an economic Dead period there’s another huge reason I believe

Video games save Japan’s economy and that is soft power soft power a term coined by political scientist Joseph Nye refers to a country’s ability to shape the preferences and influence the behavior of others through attraction and persuasion rather than coercion or payment it arises from the cultural appeal political values and foreign

Policies of a country in this realm Japan’s video game industry emerges as a formidable instrument of soft power captivating Global audiences and embedding Japanese culture Aesthetics and values into the fabric of international Society the video game industry with its roots deeply entrenched in Japan’s Innovative soil has propelled Japanese culture onto the

Global stage unlike any other medium iconic franchises such as Pokémon Super Mario and Final Fantasy have become more than mere entertainment they are cultural ambassadors that carry the essence of Japan to every corner of the world through engaging narratives captivating art and immersive gameplay these games introduce players to

Japanese history folklore and societal Norms fostering a global affinity for Japanese culture moreover the industry’s global success showcases Japan’s technological prowess and creative Spirit reinforcing the country’s image as a leader in Innovation and Digital entertainment as players across the world connect over shared experiences provided by Japanese games they develop

A positive association with Japan enhancing its International image and influence the soft power of Japan’s video game industry also extends to its economic impact by dominating a significant share of the global entertainment Market the industry not only contributes substantially to Japan’s economy but also positions the country as a key player in the

International digital economy this economic success story further elevates Japan’s standing on the world stage attracting investment Partnerships and talent in essence Japan’s video game industry is a vibrant example of how soft power can be wielded through cultural exports this leads to better trade deals and increased foreign

Attention it is way easier for Japan to get foreign investment than Kazakhstan want to know why because people know it exists it is impossible to measure the direct economic impact of soft power but it’s another one of those traits that can’t be ignored there are over 10 companies operating in the gaming space

In Japan generating over 200 million a year in revenue of that five generate over a billion and two rank in the top 10 largest companies in the nation the five largest game companies in the nation today are Sony the owner of PlayStation which generated 27 billion last year Nintendo the iconic gaming

Company which generated 13.9 billion Square Enix with 2.5 billion Bandai Namco with 2.1 billion and Sega with 1.98 billion all of these companies have yearly Revenue that would rank largest than the economies of entire countries like Grenada and the Solomon Islands sure those countries aren’t exactly massive but to have five companies that

Make video games larger than a nation in the first place is impressive Sony would rank larger than Cambodia as its own Nation to make the comparison even more absurd there is no way to overlook the video game industry and its role in the sustainment of the Japanese economy even

Through the stagnation of the last 30 years one of the last insanely overpowered Advan vages gained from Japan’s massive video game economy is its impact on the overall balance of Japan we mentioned it earlier but having tens of billions of dollars in exports is crucial for a truly World level

Economy the ability to spread its Revenue internationally helps insulate it from just the Japanese economy even in times where growth slows to a stop or even shrinks it allows there to be a reliable source of employment and tax revenue the microeconomists to support the gaming industry is one with the

Financial Security to make it through almost any downturn giving the Japanese one less headache to navigate it also helps that technology and its related Industries tend to be very high margin increasing the tax revenue further especially as the Advent of digital gaming took place and gained popularity these are companies generating billions

In Revenue mostly to send packets of data back and forth if a company can do 34% of a billion dollars via digital content content that revenue is almost entirely profit sure there is a small cost for hosting and digital infrastructure but there isn’t a dis there is no shipping there is no vendor

Relationship it’s just a transaction where gaming fans hand over money this also helps Studios spend more money on game development increasing the fan base and helping grow the industry by being export supported it helps change the balance of Japan’s economy from reliant on others to an equal trading partner

The Journey of video games from a burgeoning form of Digital entertainment to becoming the lynchpin of Japan’s economic Revival is a testament to the transformative power of innovation and cultural export as Japan navigated through the economic turbulence of the late 20th century it was the video game

Industry that emerged not just as a Beacon of Hope but as a driving force behind the nation’s recovery through the global success of iconic franchises and the pioneering Spirit of companies like like Nintendo Sony and Sega video games have propelled Japan to new heights of Economic and cultural significance on

The world stage the impact of this Dynamic industry extends Beyond mere Financial metrics it has redefined Japan’s International image showcasing its creativity technological prowess and unique cultural offerings video games have indeed saved Japan’s economy breathing life into its markets inspiring innovation in technology and for ing unbreakable bonds with global

Audiences as we look to the Future the legacy of Japan’s video game industry continues to unfold promising new adventures in both digital Landscapes and economic Realms if you enjoyed the video please be sure to press the like button as we said this is only our second video If

You really liked it be sure to subscribe we plan on posting videos similar to this on at least a weekly basis have a great day

The video game industry played a pivotal role in revitalizing Japan’s economy, especially during the economic challenges of the 1980s and 1990s. Companies like Nintendo, Sony, and Sega, with their innovative gaming consoles and iconic franchises such as “Mario,” “Final Fantasy,” and “Sonic the Hedgehog,” captured global audiences, generating significant revenue. This success not only boosted Japan’s exports but also positioned it as a leader in the burgeoning digital entertainment market. The industry’s growth spurred technological advancements and job creation, providing a stable source of income and international prestige. Ultimately, video games became a critical component of Japan’s cultural export strategy, contributing to its economic recovery and sustained growth.

How Video Games Saved Japan’s Economy

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0:00 Intro
0:45 History
5:10 Video Game Economy