There is a popular social network game that many of us may not know exists. Annual revenues from this market have grown from a few million dollars to over $3 billion in just five years. It is a now a main topic of discussion in Japanese business circles because of its phenomenal growth rate. There are very few segments within the Japanese electronics industry that are flourishing; in fact, many companies are barely hanging on as they try to weather the economic slowdown. Conversely, revenue predictions for this social network games are expected to be well over $10 billion in the next few years.

Most gamers refer to any type of online game that is played through social networks as a Social Network Game. (Lil) Green Patch, Happy Farm, Farm Town, YoVille and Mob Wars were some of the first successful games of this genre. FrontierVille, CityVille, Gardens of Time and The Sims Social are more recent examples of very popular social network games. These online games feature multiplayer action and asynchronous game play mechanics. They are most often implemented as browser games, but can also be implemented on other platforms such as mobile devices. There are currently over 50 companies that provide game services through the internet in Japan.

It is free to participate in these games; however, players are highly encouraged to purchase powerful items to compete against other players. The games are very exciting for young people and most have a hard time ending a game. It is a double-edged sword that these games can be played on any mobile device. This means our younger generation can play anywhere, anytime ... while they are eating, walking, or trying do to homework. Smartphones have definitely accelerated the growth for social network games.  This may be a contributing factor for the success of the iPhone 5 which boasts of quicker speeds and improved displays.

Social networking does have its drawbacks.  It is very addicting, and once a game is started, a player has difficulty in exiting the game.   A youngster may intend to play a quick game; however, a game can turn into hours of sitting and staring at a screen – the only part of their body receiving a workout is their fingers and thumbs.   School and work are no longer a priority.  Another drawback to the addicted player is the amount of money spent on the games and accessories.  Each item by itself is not expensive, but the total of all items add up to a very expensive past time once the player has logged on many hours. A song from iTunes may cost only $1.29, but once you have purchased 2000 songs over a period of time, it adds up to $2580. One newspaper reported a middle school student racked up over $10,000 in few weeks using their parent’s credit card. One college professor who is an expert in the IT field is making a case for government regulations.  His argument is that these social network games are addictive to young people, and providers continue to exploit their desires to play online games.

Many Japanese game providers are planning to launch more social network games to overseas markets that include the US, Europe and China. These social network games will generate more business for the electronics industry, but at what cost to our younger generation?

Dominique K. Numakura
DKN Research, www.dknresearch.com

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Headlines of the Week

1. DIC Global (Major supplier of specialty chemicals in Japan) 9/5
Has developed a new heat-resistant hardener “EXB-9000 SERIES” for epoxy resins. It includes phosphorous molecules, not halogen.

2. Mitsubishi Materials (Major chemical company in Japan) 9/10
Has received a R&D fund from the government for the recycling technology of rare earth element of the used motors.

3. Chipbond (Major semiconductor assembling firm in Taiwan) 9/13
Manufacturing capacity will be tight from September. It has received a large order for LCD driver ICs from Renesas in Japan.

4. TPK (Major supplier of touch screen in Taiwan) 9/13
Has started the delivery of 7” panels for Amazon’s “Kindle Fire HD”. It plans to ship 400 to 500k units in October.

5. Hitachi Chemical (Major supplier of electronic materials in Japan) 9/13
Has agreed to have an R&D alliance with IME in Singapore for the project of ultra thin wafer processing technologies assuming 2.5/3D packaging.

6. Rohm (Major device manufacturer in Japan) 9/18
Has co-developed a tiny fuel cell battery for smart phones with Kyoto University using calcium hydride. It has a capacity of 5Wh.

7. Panasonic (Major electronics company in Japan) 9/20
Has developed a new image sensor “Smart FSI” with 13 million pixels. The size of one pixel is 1.25 micron square. The volume production will start in December.

8. Hitachi (Major electric & electronics company in Japan) 9/24
Has co-developed a new data storage technology on quartz substrates with Kyoto University. It has a higher memory density than traditional CD.

9. Sharp (Major electronics company in Japan) 9/25
Has developed a new transparent photovoltaic cell module “NA-B095AA” eliminating metal frames for window use.

10. Kyocera (Major electronics company in Japan) 9/25
Has commercialized a new FFC connector series “6823” with 0.4 mm pitch and 0.62 mm height for the terminations of the high density flexible circuits.

11. Yamaichi Electronics (Packaging device manufacturers in Japan) 10/1
Has decided to terminate its solar energy business because of slow demand in the market. It plans serious job cuts.

DKN Research Newsletter
#1230, Sept. 30, 2012 (English Edition)
Electronic Packaging Industry News from Japan & Asia
(www.dknresearchllc.com)