In Japan’s cryptocurrency industry, NFTs and Web3 games dominate. High-quality projects have adopted a range of operational strategies, including building strong communities, localizing marketing, and earning user trust through long-term operations. In recent months, the relaxation of Japanese regulations has attracted more attention to the cryptocurrency space.
Key points:
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To ensure market stability and investor asset safety, the Japanese government has established strict laws and regulations, which are a challenge for small cryptocurrency projects.
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STEPN is a model project that has successfully entered the Japanese market. The project seized the opportunity, carried out localized marketing, and actively built communities, attracting many eyes in the Japanese market.
Globally, Japan is a unique market with enormous potential in finance and investment, with a strong retail forex industry and a thriving stock trading sector.
Due to frequent hacking attacks on early cryptocurrencies, the Japanese government has maintained a cautious attitude towards the cryptocurrency industry and has exercised careful supervision. Even today, due to the supervision of the Financial Services Agency, the choice of cryptocurrency assets in Japan is relatively limited.
However, in 2017, Japan approved Bitcoin as a legal form of payment, creating conditions for the rapid development of the cryptocurrency industry. Although the government was initially skeptical of the industry, recent events have shown that as the Japanese blockchain industry continues to develop, the government has become more supportive of the industry’s growth.
In April 2023, the Web 3.0 project team of Japan’s ruling party released a white paper proposing measures to promote the development of Japan’s cryptocurrency industry. In June 2023, Japan’s “Funds Settlement Act Amendment Bill” was passed in the House of Councillors, making it the world’s first country to enact stablecoin legislation.
However, due to some policy restrictions, such as not being able to directly invest in tokens or issue token projects, the development of DeFi in Japan is still relatively limited. Therefore, NFTs and blockchain games are generally considered the primary players in Japan’s cryptocurrency market.
If you want to learn more about the Japanese cryptocurrency market, you can click here to read the full report: Japanese Cryptocurrency Market Report: Industry Trends and Future Prospects Research.
What are the characteristics of successful blockchain projects in Japan?
Successful blockchain projects in Japan have adopted a series of operational strategies, including building strong communities, localizing projects, and winning user trust through long-term operations.
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Strong community
One of the most important features of a successful blockchain project is having a community of supporters and loyal users. This community can help increase awareness of the project, increase engagement, and ensure long-term operation of the project. To achieve a thriving community, various methods can be used, such as holding community events, incentivizing users, and increasing project transparency.
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Project localization
Localized operations of a project are particularly important for various blockchain projects in the Japanese market. Due to Japan’s strong cultural foundation and the dominance of Japanese in daily life, overseas projects need to adapt their products and services to local regulations, translate information into Japanese, and cooperate with local KOLs and the media to hold local events. By engaging with localized audiences, the project can gain more awareness and users.
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Long-term operation
A successful blockchain currency project must have the ability to respond to risks and adapt to the market. To develop a viable product and concept, the project needs to maintain stable operation in the market’s fluctuations. Japanese people are relatively rigorous and usually hesitant about new technologies, so the project must gradually establish a reputation in the Japanese market and operate for the long term to achieve success in the market.
In addition to these characteristics, establishing partnerships with local KOLs, VCs, projects, and the media in Japan can also help the project expand its influence, establish credibility, and promote win-win growth. This is particularly important in Japan, where industry giants, especially traditional companies, still dominate the market. Therefore, start-ups should fully utilize their innovative advantages to establish partnerships with these existing giants and rise with their help.
STEPN Case Study: Development of Overseas Projects in the Japanese Market
STEPN is the first game to implement the “Move to Earn” economic model in the game and has achieved significant success in the cryptocurrency market in Japan.
STEPN Daily Active Users
The core game mechanism of STEPN is that players can buy sports shoe NFTs in the game and earn game tokens GST by walking, jogging, or running outdoors. These tokens can be used to upgrade existing sports shoes or create new ones. STEPN has achieved great success in Japan due to several key factors.
First of all, the timing of entry is crucial. When STEPN was launched around the end of 2021, the macro market conditions were relatively good. After the bull market in November 2021, many people had ample funds. The increase in liquidity has prompted a large number of users to have a greater willingness to purchase in-game items. Although the project party cannot control the market trend itself, it is still an important decision factor for the project’s success.
In addition, it should be noted that Japanese players generally have higher spending power than players in other countries. They are often willing to invest a lot of money in NFT items in the game, and some even invest five or six figures to maximize their game returns.
This level of spending is rare in the gaming industry compared to other countries. For example, Axie Infinity is a popular game in the Philippines, and its main development drive comes from the scholarship mechanism. Players can join the guild by renting three Axies at a low price, which allows players to enter the game with almost no upfront costs. Therefore, individuals can participate with less initial capital.
At the beginning of the game’s launch, STEPN identified Japan as its target market. Therefore, before players from other parts of the world join the game’s economic system, Japanese players have already used their powerful purchasing power to shape the market circulation mechanism in the game, making the health and liquidity of its in-game market exceed the global average. Japanese people usually have a lower participation rate in the global community, and STEPN successfully adapted to the local community in Japan and triggered a positive cycle, so discussions on STEPN in the Japanese market are more than in other major markets around the world.
Source: Google Trends
The use of GPS in games can also be seen as a favorable factor. STEPN needs to accurately track GPS to prevent cheating and maintain the integrity of the in-game economy, while also being able to inject bets in real time. Many Japanese people use iPhones with precise GPS systems, which makes it easy for players to start the game and make money.
The Gacha system is a unique feature widely used in Japanese mobile games, where players can use game tokens to exchange for random in-game items. The Gacha system has always been an important factor driving game growth in Web2 mobile games. STEPN successfully integrated this concept into the game, enhancing player engagement and interest.
During the peak of the game’s popularity, STEPN’s players could earn about $3,000 a day just by walking. The game’s user-friendliness and generous rewards sparked a viral frenzy and even caused a breaking effect.
Other projects can learn strategies from successful cases like STEPN. However, it should be noted that macro market conditions and other external factors also have a significant impact on projects that operate successfully in the Japanese market.
Opportunities and Challenges in Japan’s Cryptocurrency Industry
Japan has a strong and sophisticated traditional financial system, providing a solid foundation for the development of its blockchain and Web3 industries.
When it comes to Japan’s cryptocurrency market, compliance has always been an important issue. To ensure market stability and investor asset security, Japan has strict laws and regulations in the blockchain field. However, while these regulations protect the industry, they also pose challenges to some early-stage cryptocurrency projects. Due to compliance costs and high tax burdens, the entry and development of these projects have been hindered. In addition, the approval process for token listings is lengthy, which has led people to believe that the market lacks vitality and has caused them to lose confidence in the field.
For a long time, Japan has been characterized by stability and caution in financial affairs. This attitude may limit corporate innovation and market flexibility, but it also protects traders from the impact of major risks. Innovation is the key to the success of cryptocurrencies, so the lack of innovation may be an important reason why Japan’s cryptocurrency industry lags behind other countries.
The good news is that in April 2023, the Web 3.0 project team of Japan’s ruling party released a white paper outlining recommendations for promoting the development of the Japanese crypto industry. In June 2023, Japan’s Revision of the Funds Settlement Act was passed in the Upper House, making Japan the first country in the world to enact a stablecoin law. Institutional investors in Japan are showing increasingly strong interest in cryptocurrencies and gaining a clearer understanding of the potential of the industry. The growing market interest could greatly propel the development of the entire cryptocurrency industry, bringing more liquidity, stability, and credibility to the market, and attracting more interest from retail and institutional investors. Japan’s gaming market and its strong IP resources have already demonstrated its huge potential. The combination of Japan’s unique cultural characteristics and strong financial system will make it a global leader with enormous potential in the Web3 industry. By fully utilizing its strengths, promoting innovation and growth, Japan has the opportunity to lead the future of the global Web3 industry.
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