Veteran Developers Analyze the Predicament of Chinese and Japanese Mobile Games: How Genshin Impact Redefined the Competition, Squeezing the Space for Mid-Tier Titles

Recently, insights from two senior Japanese gaming industry figures have revealed, from different perspectives, the profound structural challenges faced by the global mobile gaming market, particularly in China and Japan, entering 2024. This is not merely a race of investment and innovation; it highlights how global top-tier products have irreversibly altered market rules and player expectations, rapidly shrinking the space for newcomers and small-to-medium-sized teams.

I. Industry Consensus: Genshin Impact Resets Standards, Japanese Side Reflects on the “Scale Gap”

Former President of Sony Interactive Entertainment Worldwide Studios, Shuhei Yoshida, recently stated candidly at an independent game exhibition in China that the Japanese gaming industry “finds it difficult to achieve the production scale and update speed of titles like Genshin Impact and Honkai: Star Rail,” acknowledging a gap between Japan’s mobile gaming sector and its Chinese counterparts.

This view was corroborated and deepened by Japanese veteran developer Ukyo. In a lengthy article, this industry “old-timer” who entered the field in 2003 directly asserted that “Genshin Impact has impacted the Japanese gaming industry.” This “impact” manifests on two levels: First, its record-breaking success and investment,堪称 “next-generation,” have created significant strategic anxiety for Japanese developers, forcing them to contemplate whether they must join this arms race of cost and innovation. Second, it has fundamentally raised global players’ aesthetic and experience standards, directly changing the market’s survival threshold.

According to Ukyo, in the Japanese market before the advent of Genshin Impact, a mobile game could survive if it achieved a monthly revenue of around 100 million yen (approximately 4.53 million RMB). However, the emergence of Genshin Impact significantly raised the average levels of revenue, investment, and player expectations across the entire market, causing many titles that previously met the old standards to be forced into early closure due to becoming “relatively mediocre.”

Original link:https://note.com/ukyousan/n/n68014445fb7f?sub_rt=share_pb

II. Underlying Challenges: Structural Difficulties Shared by Chinese and Japanese Mobile Games

Ukyo’s analysis did not stop at reflecting on Japan; the issues identified precisely mirror the current pains in China’s mobile gaming market, especially in the fiercely competitive二次元 (anime-style/”2D”) game track. Cases like Tide of Dragons and New Moon Companions, which shut down within a year of launch, are highly consistent with the reasons outlined in the article.

The Pain of an “Unstoppable” Development Process: The article points out that the highly specialized division of labor and high costs in modern mobile game development mean projects often “cannot be stopped” once started. Many teams rush forward before the core gameplay loop is maturely validated, as pausing any aspect would incur unbearable personnel and outsourcing costs. This easily leads to projects “wavering repeatedly” in their direction mid-development.

Case: Tide of Dragons: During development, the game shifted from side-scrolling runner to side-scrolling action, and finally added 3D sandbox exploration. This not only drastically increased costs but also forced the game onto a “high-spec” track for direct competition with top-tier products like Genshin Impact, ultimately becoming unsustainable.

The High Wall of Player “Sunk Costs”: As leading games like Genshin Impact and Honkai: Star Rail operate for longer periods, the significant sunk costs of time, emotion, and money invested by players create a formidable barrier. This makes it exceptionally difficult for new games to compete for users from these established titles.

Case: New Moon Companions: The game excelled in art, storyline, and reputation, incorporating unique Lingnan cultural elements, yet still faced closure. A key reason is that as a content-focused二次元 game, its core audience heavily overlaps with that of the leading products. With players’ time and energy now firmly occupied by flagship titles, relying solely on partial differentiation is no longer enough to sway the market.

III. The Path Forward: Differentiation and Focused Survival

Faced with shared challenges, where does the industry’s future lie? Both Ukyo’s article and the realities of the Chinese market point towards more rational development paths:

Abandoning Futile “Specs Races”: For the vast majority of teams, blindly competing with Genshin Impact-level investments in graphics and scale is suicidal. The market no longer needs another “budget version of Genshin Impact.”

Seeking Genuine Innovation in Gameplay or Themes: Differentiation must touch the core. This requires teams to spend sufficient time in the early project stages validating a unique and appealing core gameplay loop, rather than wavering midway through development.

Precisely Targeting Niche Markets: Instead of competing with blockbusters for broad二次元 users, it is better to deeply cultivate specific themes, art styles, or gameplay preferences, serving a clear and loyal core community.

Controlling Costs and Adjusting Expectations: As the survival space for “mid-tier” products is severely squeezed, projects need more refined cost control and realistic expectations for commercial returns.

The arrival of Genshin Impact was like a massive stone dropped into a calm lake; the ripples it created have evolved into a tidal wave sweeping through the global mobile gaming industry. Developers from China and Japan now stand before the same mirror, reflecting the new-era challenges built jointly by capital, user expectations, and organizational inertia. Competition in the gaming industry is evolving from a simple product contest into a comprehensive test of market insight, R&D management, and strategic resolve. Only by recognizing and respecting this new reality can one find a firm footing in the ongoing industry reshuffle.