This weekend, I "attended" Otakuthon 2020, an anime convention in Montreal, Quebec in Canada which, due to the COVID-19 pandemic, was held in virtual form this year. The events consisted of a mixture of live and prerecorded material, with one of the most insightful ones being the "CyberConnect 2 Game Industry Panel: Truth Behind Japanese Games" seminar, where Hiroshi Matsuyama, the CEO of Japanese development studio CyberConnect2 and a 20 year veteran of the industry who's been creating video games since the days of the PS1, gave an excellent overview of exactly how the anime, manga, and gaming businesses work in Japan.

Since it was unclear at the time whether or not the full video of the panel wuld be released to the general public, I spent my time screencapping the entire seminar for posterity and originally posted it as part of an extremely long thread on Twitter yesterday over the course of several hours. Now, I've decided to post the information here for Redditors to enjoy. :)

VIDEO GAME INDUSTRY (JAPAN)

• In Japan, the number of new video game titles released per year has dropped from its peak of 983 in 2007 to 411 in 2019. This is due to a combination of the expansion of the mobile market and the shrinking of the console market.
• Many Japanese have turned towards mobile gaming because many of them having less time to devote to more time-consuming console games.
• Hardcore gamers in Japan purchase an average of 8.8 new video games per year while casual gamers buy less than half that amount (3.6 new video games).
• "Pokémon Sword and Shield" sold a staggering 3 million physical copies in Japan last year. "Super Smash Bros. Ultimate" placed second at 1.09 million, a figure which is made all the more impressive considering when you consider that the game was actually released the year before (December 2018).
• 9 of the 10 top-selling video games in Japan in 2019 were Nintendo Switch games. I'm guessing that makes a lot of Nintendo's investors happy. :)
• There is a tremendous numerical disparity in the Top 50 best-selling video games in Japan. While the 1st place game sold 3 million copies, the 10th place game sold less than one sixth of that (500000 copies), and the 50th place one only 86000.
• A rule of thumb is that you have to sell more than 100000 copies of a video game in Japan to be in the black. Anything lower than that and you're probably in the red.
• An even more sobering statistic is that only 20% of video games manage to do the above and 80% of them actually end up losing money. :(
• What sells well internationally doesn't necessary sell well in Japan and tastes differ greatly. The "NBA 2K" series doesn't sell much over there, for example.
• Given that you only have a 20% chance of turning a profit, Matsuyama-san stresses the importance of doing your best to create the next mega-hit and knowing what makes your audience/customers happy. As a reult of this, Japanese investors tend to not like people who're oblivious to current trends and don't have their fingers on the pulse of the cultural zeitgeist.
• The first step to making a good video game is to do your research, which means spending a lot of time watching anime, reading manga, playing video games, and experiencing new things. Turns out veteran creators are also nerds, geeks, and otaku. Shocking, I know. ;)
• The Japanese video game market was valued at $15.5 billion U.S. in 2018, with about 75% of that going to PC and mobile online gaming and $400 million U.S. to console software and hardware.
• Even though the Japanese video game market doubled in size between 2009 and 2018, the PC and mobile segment increased in size by a factor of 6 during those 9 years while the console segment actually shrank by about a third.
• Of the 110 million PS4s sold worldwide, only 8.3 million of those were in Japan.
• CyberConnect2 managed to sell around 6 million copies of "Naruto Ultmate Ninja Storm 4" worldwide over four and a half years, though only 150000 of those sales were in Japan, so the foreign market can most definitely influence profits in Japan.

ANIME INDUSTRY

• During any given week, there're about 100 different anime series airing, of which around 45 are cour-length and the other 55 are continuing, with a cour being "a three-month unit of television broadcasting, corresponding to one of the four seasons".
• Matsuyama-san humorously pointed out that, for anyone wondering why children are up watching anime between 11:00 P.M. and 3:00 A.M. at night, that's because Japan actually makes shows for a wide variety of ages, so adults are watching those shows.;)
• To crunch the numbers from earlier, if about 45 new anime series are released per cour and there are 4 cours per year, that works out to roughly 200 new anime series being released every year.
• Now for a pretty harsh dose of reality: The chances of you making a successful anime are actually halved compared to video games. For the between 1 and 4 breakout hits of the season (10%), you have 40 shows (90%!) that're in the red and losing money. :O
• So, with these dismal figures, how the heck do Japanese animation studios manage to stay afloat? One word: merchandising. The sales from all those figures, posters, and other knickknacks apparently add up quickly and help you push you back into the black.

MANGA INDUSTRY

• While it seems pretty obvious, Matsuyama-san points out that, as opposed to video game developers who're paid regular wages by their employers, mangaka are freelancers/self-employed and don't earn a cent unless their works are published in a magazine.
• When it comes to how much mangaka actually earn, the average manuscript fees/royalties received amount to around $9.27 US to $27.81 US per page on the low end, with higher end publishers paying between $46.35 US and $92.70 US per page.
• Even if you're a machine who churns out 19 pages a week at maximum pay and earn around $1700 US, you don't make a comfortable living from it because a large chunk of that cash goes to paying for your assistants and studio.
• It's not just the mangaka who're hard up. Manga magazine publishers are also in the red because they don't have advertising revenue as a crutch since their publications have relatively few ads as opposed to beauty/fashion magazines (which have a ton).
• So how does anyone make money in the manga industry? The answer: tankoubon (collected volumes of published stories, the Japanese equivalent of graphic novels). Their sales are the metric by which a particular series is judged and it is those numbers that determine whether or not a given series lives or dies. If the compilations don't sell enough, publishers end up pulling the plug on the whole thing.
• About 1000 unique tankoubon are published a month, very few of which make it all the way to to Western shores.