70% of Japan's Mobile Games Skip In-App Payments to Dodge Tech Giants

Rise of External Payment Systems in Japanese Smartphone Games

A growing number of Japanese smartphone games are adopting external payment systems to bypass high commission fees imposed by major U.S. tech companies, Google and Apple. According to a recent survey, nearly 70% of popular Japanese mobile games have introduced these alternative methods to avoid the steep 30% commissions charged by the tech giants.

This shift comes as Japan prepares to implement a new law that will impose stricter regulations on Google and Apple. The legislation, set to take full effect in December, mandates that both companies open their payment systems to third-party providers. This change is expected to significantly impact how game developers monetize their products.

Currently, the majority of users access games through Apple’s App Store and Google’s Play Store. When players make in-game purchases, developers are required to pay a substantial fee—up to 30%—to the platform owners. These fees have become a burden for many game makers, prompting them to explore alternative solutions.

A Kyodo News survey of the top 30 best-selling games in 2024 revealed that among the 16 titles offered by domestic companies, at least 11 had introduced external payment options. These systems allow users to purchase in-game items through websites or other platforms outside the app stores. This approach reduces the financial burden on developers while offering potential savings for players.

The external payment method typically involves settlement service providers such as Digital Garage Inc. and GMO Tech Inc., which charge a much lower commission rate—around 5%. This significant difference in fees has led analysts to predict that the shift could result in cost reductions for users and increased profitability for game providers.

Despite the benefits, Google and Apple argue that their high fees are necessary to maintain user privacy and security. However, many developers believe that these charges are becoming unsustainable, especially with the upcoming regulatory changes.

The survey also highlighted the responses from eight out of 12 domestic game developers. Of the 12 titles from these companies, 11 had adopted external payment systems. Two developers declined to comment, while another two did not respond to the inquiry.

One notable example is Mixi Inc., which launched an external payment system for its popular game "Monster Strike" in August of last year. The company reported that this move allowed users to purchase approximately 5% more items compared to using in-app payments.

As the Japanese market continues to evolve, the adoption of external payment systems is likely to grow. This trend not only challenges the dominance of Google and Apple but also opens up new opportunities for game developers to innovate and compete more effectively. With the new regulations in place, the landscape of mobile gaming in Japan is set for significant transformation.