Korean Social Game Market Trend Report (3rd Quarter 2010)
Marketing Plan - League of Legends enter Japanese market
1. Riot Game (League of Legends)
Phuvadol Uewongtrakoon 12877726
Zhang Xiang 12903130
Vu Hoang Anh 12773766
Li Ying Ze 12760028
Ma Jie 12760128
James Cook University Singapore
Mr Sim Lim Guan
BX3082 – International Marketing
2. 1
Table of contents
Executive summary 4
1.0 Introduction 5
1.1 Objectives 5
1.2 Background 5
1.3 Research methodology 5
1.4 Scope 6
2.0 Japanese marketing environment analysis-PESTEL 6
2.1 Political and legal factors 6
2.1.1 Form of Government 6
2.1.2 Constitution 6
2.1.3 Judicial branch 6
2.2 Economic factors 7
2.2.1 Macroeconomic 7
2.2.2 Interest rate and inflation 7
2.2.3 Three major industries 8
2.3 Technological factors 8
2.3.1 Internet 8
2.3.2 Internet access 8
2.3.3 Science and technology 8
2.4 Legal factors 9
2.4.1 General legal system 9
4. 3
4.6.4 Promotion 20
4.6.5 People 20
4.6.6 Process 21
4.6.7 Physical evidence 23
5.0 Plan assumption 23
5.1 New product – LoL as a console game 23
5.2 The cooperation with GungHo 23
5.3 The operation system in Japan 24
5.3.1 Monitor and support GungHo 24
5.3.2 The R&D of LoL in console game 24
6.0 Implement and contingency plan 26
6.1 Specific action plan 26
6.2 Contingency plan 27
7.0 Marketing budget plan 28
8.0 Conclusion 29
9.0 References 30
10.0 Appendix 33
5. 4
Executive summary
Enclosed in this foreign market entry report is the proposed expansion of league of
legend by Riot Games in Japan. In this report, the below is the proposed market entry modes,
which is being a partner with GungHo. The GungHo Online Entertainment known for hosting
the Japanese server for a wide range of online games. After Riot has gained enough
knowledge, experiences about the Japanese game culture. Riot Games could be able to
establish its own company and run Asian servers itself in Japan.
In Japan, Riot Games will maintain it’s positioning as providing a highest quality
game services, healthy game environment. As well as Riot Games would like to position
League of Legend as the current popular social online game played in the world that can play
in PC and MAC as well. In addition, it is to offer the social game where people can come to
play as a team to get victory, also they can make more new friend in the game.
The total investment estimated of League of Legend server into Japan is 2.9 million.
It was included that expensed for the game server lease, human resource, network technique
and network equipment. It is planned for League of Legend Game to reach a break-even
within 3 years, and then make the profit 20% of the market share within 3 years and to
increase revenue by 20% per year after the break-even year.
From the beginning of the planning to the unveiling of the League of Legend by Riot
Games operating into Japan, the estimated time expenses of this entire process is one year.
The entry planning is following the specific action plan which is laid out in section 6.1 a
manager in Japan will be appointed to be the in-charge of the League of Legend by Riot
Games operation which will be established as a separate section game serve under the Riot
Game Group.
6. 5
1.0 Introduction
1.1 Objective
The objective of this League of Legends game which is one of Riot games
company entry proposal is to advise and propose a series of preparations that are
fundamental for entering the selected new foreign market, Japan. In addition, our
marketing plans which are consisting of four components, which are the game culture
environment analysis in japan, a marketing plan, a marketing budget and a marketing
entry mode. It will ensure the success of League of Legends in Japan. In addition, the
recommendations on implementation and contingency planning are also suggested at
the end of the marketing entry mode.
1.2 Background
League of Legends is a multiplayer online battle arena video game which is
published and developed by Riot Games for Mac OS X and Windows (Kurtis, 2013).
This game is not funded by ad or ordinary box sales revenue. It is a free game
building for everyone. Actually, it was first announced on October 7, 2008, and then it
was released on October 27, 2009. It has so many services in the world, such as North
America, Brazil, Latin America North, Latin America South, EU West, EU Nordic &
East, Turkey, Russia, Oceania, republic of Korea. In additionally, this game has
grown in popularity in those years, and the daily active players are about 12 million.
This game is so successful in America. It includes so many heroes, and every
hero has its own history and background. It is very attractive for players. Moreover,
American publics also care about the accomplishment and admire hero. Next, the
game is not only one-person game, that should play likes a group. It needs everyone
help each other to get the victory.
1.3 Research methodology
To collect those data from the Internet bar, network in Japan. The research
was decided by quantitative research which measuring the number of league of legend
game players, then analysis the data about that. In addition, to care about the quality
7. 6
of the league of legend game, the research also was decided by qualitative research
which asking players how they feel about this game.
1.4 Scope
The marketing plan entry in Japan was included insights to the game culture in
Japan, marketing environment analysis that is PESTEL, marketing plan, marketing
strategy, marketing enter mode, implementation, contingency plan and marketing
budget about setting up league of legend in Japan.
2.0 Japanese marketing environment analysis-PESTEL
2.1 Political and legal factors
2.1.1 Form of Government
Generally considered about the national form of Japanese government is
constitutional monarchy. Japanese emperor is the symbol of the state and of the unity
of the people. But he has not right to participate national policy. Cabinet is the highest
administrative organ and responsible for Congress. The Prime Minister of Japan is the
head of government and he is the chief of the executive branch. Amp Shinzo is
incumbent Japanese Prime Minister.
2.1.2 Constitution
According to the current Japanese constitution published on May 3, 1947.
Japan implement the legislative, judicial and executive power based on parliamentary
cabinet system. In addition, Congress is the highest authority and the only branch of
legislature.
2.1.3 Judicial branch
In Japan, Supreme Court is the highest court. The jurisdiction of Japan belongs
to the Supreme Court and different level of Subordinate Court. The higher judicial
8. 7
members are appointed by the Emperor. For the Japanese judicial system, the
Supreme Court plays a role as the final judicial authority.
2.2 Economic factors
2.2.1 Macroeconomic
In the economic area, Japan is an extremely developed country and one of the
richest countries in the world. Therefore, Japanese has a high level material standard
of living. According to nominal GDP, the economy of Japan is the third largest in the
world. In 2013, the total GDP of Japan is $4.8973 trillion and GDP per capita is
$38,459. Comparing with last year, the figure of GDP increase 1.5%. Japan’s service
sector, especially banking, finance, shipping and business services accounted the
largest proportion of GDP.
2.2.2 Interest rate and inflation
For a long time, Japan’s deflation restricts the development of Japanese
economy. In addition, Japan’s highly accommodative monetary policy makes
Japanese prices rose in 2013 and dues to negative real interest rates at present. At the
same time, Bank of Japan through buy more government bonds to hold down the rise
of long-term interest rates. So that the real interest rates dropped to below zero from
the last year. Negative real interest rates are likely to pull the Japanese enterprises and
equipment investment.
9. 8
2.2.3 Three major industries
Among the three major industries, the proportion of tertiary industry
accounted for to reflect the level of development of a country. In Japan, the tertiary
industry occupies 65% of total three major industries. There are two special industries
in Japan’s tertiary industry, animation industry and video game industry. For Japan,
the video game industry has been one of the important pillars of the national
economy. It occupies a pivotal position in the fifth of GNP. Japanese game is also an
important part of export.
2.3 Technological factors
2.3.1 Internet
Japan is the world’s leading in the Internet technology area. In 2013, Japan
had about 40 million broadband lines service. It is the third largest broadband market
in the world only after America and China. Therefore, the popularity of Internet rate is
very high. More than 80% Japanese are using Internet now. Then a Japanese internet
service provide a new broadband plan with 2Gbps downloads and 1Gbps uploads in
Tokyo area. It is expected to become the world’s fastest commercial networks.
2.3.2 Internet access
Now there are so many ways to access Internet in Japan. Generally, Japanese
Internet Service Providers (ISPS) include ASAHI NET, J:COM and SpinNet. This
three companies offer various types of high-speed internet, television and mobile
phone service. It is also have a fair price.
2.3.3 Science and technology
Japan is the world-class level in many areas like manufacturing and electronic
information industries. As we know, the manufacturing industry is the pillar of the
national economy. Now Japanese government put more attention on information
appliances, video game and animation as a new breakthrough. With the development
10. 9
of since and reduce the cost of technology. Games as an entertainment leader, it will
naturally have influence on developing a country’s game industry
2.4 Legal factors
2.4.1 General legal system
In the modern time, Japanese legal law system based on the European system.
After World War II, the Japanese legal system has gone through judicial reform.
Which is carried out large-scale changes between protection of human rights and
criminal procedure.
2.4.2 Trademark law
Today’s Japanese trademark law is mainly based on the Trademark Act of
1559. According to Japanese trademark law, only can establish a trademark right after
registered trademarks. In addition, it is necessary to access examination procedure to
registered trademarks. Through the protection of trademarks, trademark user
maintenance services on credit, in order to conducive the development of the industry
and protect the interest of those who demand.
2.4.3 Labour law
Japanese labour law is the system of labour law operating. In conditions of
employment must be clearly defined in the employment agreement or provide
supplementary rules to the employees.
2.5 Social-cultural factors
Social-cultural is an important factor for Riot games as well as League of
Legends game to be successful in Japan market. The total population in Japan is 127.6
million in 2012. The total population of the total consumption in gaming industry in
2010 was 510 billion Yen (about 5 billion US dollars) and 469.2 billion Yen (about
4.5 billion US dollars) in 2011 (Asian Game Markets, 2014). This is a great
opportunity for LOL game to enter the market since the overall population willing to
11. 10
spend money on video games. Another thing is that Japan is on the top 3 biggest game
markets in the world, LOL still have chances to compete and develop in the market.
Plus, Japanese culture is collectivism, by understanding well the culture, Riot games
can implement a great strategy to advertise and make LOL becomes more popular
among Japan and familiar to all players. Unlike Japan, in USA, people always try
every type of games and choose their most preferred one.
2.6 Environmental factors
In this situation, LOL will be designed to have a friendly and "healthy"
environment in game. Riot games does not support people to play game for long
period of time or be obsessed with the game. There are many cases that players keep
playing one game straight 3-day and then die right after because of stress. After two to
three hours playing, there will be a notification pops up and remind that players really
need to take a break. It helps prevent LOL from becoming a social problem or being
harmful to players. Riot games want everybody plays and supports the game in such a
positive way.
3.0 Consumer behaviour
Games is like a fashion wear, people will play the kind of game that fit for
them or most of people play in the same culture. In Japan, people love to play the
traditional types of video games, which is shooting and adventure rather than strategy
games, which LOL is. The number of players play LOL is because they want to try
new thing and want to deliver the new taste of Western games into Japan market. For
current situation, Riot games cannot expect large percentage consumption for LOL.
Sony, Nintendo and Microsoft are the three giant companies that have strong
background in game productions, all the games designed by them are very suitable for
the Japanese culture. There are some main issues that directly affect the consumer
behaviour in consume LOL game.
12. 11
Japan is one of the biggest game markets in the world, however, Riot games
has not opened a main sever yet. There are total nine severs are built in Asia market
include: Korea, China, Thailand, etc. If players want to play, they are forced to play in
foreign sever. However, playing in foreign servers may have some problems. Firstly,
the connection is not stable, which distracts and make players feel upset during the
battle. Secondly, the language issue is a big barrier for communication. Because this
is a strategy game, they have to communicate well with the team to win. However,
playing in other sever outside Japan means Japanese players need to talk in the second
language: English, Korean or even Mandarin. Imagine how they will play without
communicating with teammates or team members do not understand each other.
Also, there are limited number of players and advertising in Japan, it could not gain
attention from large group of people and people don't even know what this game is
about. In another words, the brand name is not well-known and the distribution
channel is still weak in Japan. In case they want to play LOL, where do they go to buy
it, from which store or which website they can try out this product.
From some research shows that, when a hit game release in Japan, that
company normally does advertisement to attract people. Plus, if the game is kind of
traditional type of video games, people willing to buy it even it's only available in
English version. More people in the same culture play, another people start to play too
because it's a new trend no matter what. Japan is a collectivism culture so Riot games
should consider this point. However, that's the thing Riot Games is now lacking of.
They need to improve in marketing plan to gain more customers' consumption,
position it in customers' mind, get over other competitors and change their behaviour
toward this new kind of game. If LOL is really trendy and famous among Japan, the
consumer behaviour will definitely change again.
13. 12
4.0 Marketing plan
4.1 Marketing goal
To be the leader of online game market in Japan
4.2 Marketing objectives
4.2.1 Short-term objectives
To create awareness of LoL to Japanese gamers (40% within 6 months;
additional 40% within a year)
To gain preference for LoL in Japanese online game industry (20% within 6
months; additional 30% within a year)
To increase the number of LoL players in Japan (20% within 6 months;
additional 30% within a year)
4.2.2 Long-term objectives
To promote LoL as Top of Mind Awareness game for online games in Japan
(40% within 1 year; additional 40% within 3 years)
To rise the amount of Japanese daily active players (10% within 1 year;
additional 20% within 3 years)
To obtain over 1 million ID of LoL players in Japan within 2 years
4.3 Financial objectives
To reach a break-even within 3 years
To increase revenue by 20% per year
To gain 40% of the market share within 3 years
14. 13
4.4 Market entry strategies
4.4.1 Mode of entry
According to the above PESTEL analysis, Riot Game should enter to Japanese
game market by using a joint venture with a Japanese game company in order to
achieve its goal and objectives in Japan.
GungHo Online Entertainment would be the suitable partner for Riot to
cooperate with in Japan. Since GungHo is a Japanese video game corporation, it is
known for hosting the Japanese server of a wide range of online games such as
Ragnarok Online, Tantra, Lucent Heart, Divina and so forth. In fact, GungHo is
expert in planning, development, operation and distribution of online computer,
mobile and console games. And it is the one who develop Ragnarok DS for the
Nintendo Ds (GungHo Online Entertainment, n.d.).
By cooperating with GungHo, Riot will be able to enter the Japanese market
easier than by itself due to lots of nationalism of Japanese that is hardly to open for
foreigner companies. This collaboration will help Riot overwhelming the language
15. 14
and culture barrier as well as avoiding miss-decisions from the differences of
consumer behaviour and easily solving Japanese Government regulation issues.
Moreover, Riot will be able to have the server for LoL and efficient distributing
networks in Japan.
Being a partner with GungHo, Riot will gain more insights information,
knowledge and expertise about Japanese game market as well as more support from
the local societies. Furthermore, it would help Riot for developing LoL into online
console game since GungHo has experience about this issue from develop Ragnarok
DS for Nitendo DS.
After Riot has gained enough knowledge, experiences and profits in Japanese
and Asian game market, the wholly owned subsidiaries could be the next step in the
future. Since Japan is the centre of Asian game market, Riot could be able to establish
its own company and run Asian servers itself in Japan. Even though this step will be
so expensive, Riot could decrease its costs by moving its servers in Asia to the server
in Japan and use it as its main server for Asia. Furthermore, it is worthy because
having its own subsidiaries in Japan will make Riot has fully control and minimise its
costs for operating in Asia. Likewise, it will be a bridge for Riot to launch its new
games to Asia in the future.
16. 15
13.40%
9.70%
38.30%
13.80%
24.80%
Age structure of Japanese demographics 2013
0-14 years 15-24 years 25-54 years 55-64 years 65 years and over
Figure 1. Index mundi (2013).
4.5 STP (Segmentation / Target / Positioning)
4.5.1 Market segmentation
Segmentation base Selected variables Description
Demographic Age Between 15 – 25 years old
Psychographic Lifestyle Fun seekers
Behavioural Benefits Have fun with friends and
meeting new friends
4.5.2 Primary target market
After conducting marketing research, teenagers (15-24 years old) have been
chosen as the primary target market for LoL. According to Index mundi (2013), as
illustrates in Figure 1 teenagers represent approximately 10 percent of Japanese
citizens which is more than 12 million people. This number implies that there are
plenty of opportunities in Japan for Riot to catch this target market.
The reason that targeting on teenagers is because the behaviour of this group
of age which represents the best of “Fun seekers”. Adolescent tends to look for
something fun and fresh more than older people as well as they like to do things with
17. 16
their friends (Nishikawa, 2009). Moreover, teenagers account for almost 80 percent of
LoL players throughout the world (League of Legends, n.d.).
Additionally, as mentioned in PESTEL analysis, Japanese people tend to play
console game more than PC games and online games. Therefore, LoL in online
console game would be the new alternative way for Japanese teenagers who want to
try something new and have fun with their friends in the same time.
4.5.2.1 Secondary target market
This secondary target market will act as the additional market for LoL after
Riot have gained preferences in the primary target market. Adult (25-54 years old) or
working people would be the secondary target market for LoL. This group of age
represents the biggest amount of people in Japan by almost 40 percent of all Japanese
citizens (Figure 1). Hence, there are many opportunities for Riot to expand the
number of LoL players in this target market.
Since working life in Japan causes a wide range of strains and stresses, LoL
would be the way out for them to relax form their jobs and spend times have fun with
themselves as well as making a new friend in social online game like LoL. However,
it cannot be denied that there are lots of ways to relax in Japan but it also has to be
accepted that it will costs a lot of money. Therefore, LoL would be their suitable
alternative for relaxing at their home with the minimum spending that cost them just
the internet data.
18. 17
4.5.3 Market positioning
At the present, League of Legends (LoL) has been known as the most PC
game played across the world with nearly 1.3 billion hours of gameplay (Forbes,
2012). This means LoL has around 27 million people play the game daily or 67
million people a month (Frobes, 2014). To enter to Japan, Riot would like to position
LoL as the current popular social online game played in the world that can play in PC
and console. The purpose of LoL is to offer the social game where people can come to
play and have fun with themselves or their friends as well as making a new friend.
19. 18
4.6 Marketing Mix
4.6.1 Product
According to the PESTEL analysis, Japanese prefer to play games with their
own unique style of game characters called “Anime”. Likewise, PC game is not quite
popular in Japan. Japanese rather play game in console than in computer. Therefore,
by cooperating with GungHo, LoL will be turned into console game (PS4, X-Box and
so on) and offered to Japanese market. New heroes and skins in Anime style will be
launched in LoL every 2 months. However, LoL will also be available in PC game as
offered in many parts around the worlds in order to gain the market share as much as
it could.
20. 19
4.6.2 Price
For PC, LoL will be available for free download on the internet. LoL CD also
be available for sell for 3,599 JPY (around $35). It comes with one exclusive alternate
champion skin model, 20 playable champions, 4 special Summoner Runes and 1,025
JPY (around $10) of Riot Points for use in the game.
For console, the price will be higher than PC CD due to the costs of turning
LoL into console game. LoL console CD will be sold at 5,099 JPY (around $50), it
will come with one Anime exclusive alternate champion skin model, 25 playable
champions, 5 special Summoner Runes and 1,535 JPY (around $15) of Riot Points for
use in the game.
4.6.3 Place
As mentioned in the entry mode, Riot will sign GungHo as its joint venture to
distribute and run the server for LoL players in Japan. LoL PC and console CD will
be available for sell at local game centres in Japan. Most of local internet café will
have LoL available for consumers to play.
21. 20
4.6.4 Promotion
Being a partner with GungHo, Riot could advertise on local website and
television to create awareness in Japan. Local game centre and internet café would be
the great strongholds for LoL in terms of advertising to the target market. As well as
in social network, do the marketing and public relations trough social media will
easily reach the target market because nowadays almost of teenagers use social media
at least one such as Facebook, Twitter, Social-Cam, Instagram, Line and so on.
Furthermore, LoL could be able to participate in the Japan Online Game Association
and run events together with the Japanese organisation.
In the first quarter after the entry, the selling price of LoL console CD would
be sold at 20% off to the market in order to gain the market share and preferences for
LoL. Afterwards, league and season tournaments will be conducted for Japanese
player to compete and win the prize. Moreover, top teams of Japanese players will be
encouraged and supported to go for international tournament of LoL.
At the end, participating in charities and donations will be another way to do
the marketing and public relations. These will create lots of awareness and good
image for LoL in Japan and Asia.
4.6.5 People
The supported team will be provided to help and support LoL players. Players
can contact the supported team via the help forum in the main website to inform any
problem about League of Legends such as technical problems, top-up methods and so
on. The supported team will reply and attempt to solve the problems within 24 hours.
Moreover, game administrators will be provide and authorised to play the game with
players in order to improve the quality of LoL as well as look for any problem occurs
in LoL.
22. 21
4.6.6 Process
In the case of process, there are 6 methods that players can top up their Riot
Points (game currency) in the League of Legends (Let's Talk Payments, 2014);
Credit Card: Discover, Master card and Visa are accepted
PayPal: This method require the user’s PayPal account that links with
a bank account, credit card or debit account. This method allows users
to purchase stuff without having to enter their personal credit details
every time they would like to make a purchase.
Paysafe Card: This method is safe and easy for users to top up their
Riot Points without requiring a bank account or credit card.
Nowadays, Paysafe Cards are available in more than 300,000 sales
outlets throughout the world.
Mobile Payment: This is an easy-to-use method wherein users can
purchase by sending text messages, and the users will be charged
through their mobile bills or balances.
Prepaid RP Cards: The Prepaid Cards is one of convenient ways to
top up Riot Points without requiring a credit card or a bank account.
These cards can be purchased at local stores and redeemed through
LoL’s in-client store by entering the card’s pin code.
Cash and Gift Cards: These gift cards can be purchased from one of
the retailers associated to Openbucks. The cards enable players to
purchase the Riot Points with cash and use in LoL’s store to redeem
their Riot Points.
24. 23
4.6.7 Physical evidence
Currently, there are more than 100 released champions and skins in LoL
available for players to choose (League of Legends, n.d.). Moreover, every champion
has different stats and skills, this implies that players will have a wide range of
dimensions, styles and strategies to play this game.
LoL will be able to play in both PC and console. The impressing point is there
is no wall between the players on PC and console, so they can enjoy and play the
game together. This would make LoL different from other PC online game.
5.0 Plan assumption
5.1 New product - LoL as a console game
The one of the main objectives of the Japan marketing plan is the new design
of league of legends as a console game. This strategy aim to create a new bursting
point for the economic development.
In the short-term, the game publish in the console will help the company’s
development in the Japan market, depend on the Japan game culture.
In the long term, this new product will lead the company into the console
game world market. The console game market is a very big market in the game
industry.
For example, only for USA, there are 67% households play video game
(ESRB, n.d). This big market will be an important factor that support the profit
growth in the future. The marketing plan in Japan should provide this long term
objective for the company, the joint venture partner and the development of the Japan
operating system are all relate to this objective.
5.2 The cooperation with GungHo
For a simple summary of the cooperated agreement with GungHo: the basic
partner agreement is 40% of profit from Japan Market can be share to the GungHo
25. 24
company. But the requirement for this high share rate is the GungHo entrainment not
only provide the high quality operating of LoL in Japan but also support the design of
the LoL in the console game. The professional design ability in console game and
good relationship with Nintendo also is the main reason why we chose GungHo.
However the Riot Game can undertake 20% operating expense in the first year as a
promotion to ensure this cooperation can be done.
5.3 The operation system in Japan.
Riot is decided to set its own branch in Japan for future development in Japan
and Asia. The Japanese branch will directly manage the operating of LoL in Japan,
the main operating management will be control by its partner- GungHo Company.
There are two main functions or aims for the Japan Riot Game branch.
5.3.1 Monitor and support GungHo
One basic aim for the branch is to ensure that GungHo has a good operating
management for the LoL in the Japan market. And also give necessary support like
promotions plan, game technical support and so on.
5.3.2 The R&D of LoL in console game
This is the core function of the Japan branch in this two years during 2014-
2015. To work with the Research & Development department (R&D) of GungHo,
design the LoL game in console in this two year. And also negotiate with Nintendo to
ensure the game can publish in the Will finally. The simple structure of the operating
system in Japan show in the Figure 5.1.
26. 25
Figure 5.1 the structure of LoL in Japan.
Riot Game Japan Branch
GungHo Online
R&D Department Operate Management
Game/
Customer
Services
Financial
Services
New Product
Console game-LoL
27. 26
6.0 Implementation and contingency plan
6.1 Specific action plan
*GH---GungHo Online Entertainment
The official operating date will set at 5/5/2015- The Children Festival day for Japan.
May
2014
Jun
2014
Jul
2014
Aug
2014
Sep
2014
Oct
2014
Nov
2014
Dec
2014
Jan
2015
Feb
2015
Mar
2015
Apr
2015
Initial
system
Planning
Discussion
with GH
Process
prepared
Game
set/test
(PC)
Game
design/test
(Console)
Final Test
(PC/Conso
le)
28. 27
Key Date for the Plan:
11/6/2014: The E3- Electronic Entertainment Expo in Los Angeles. World
famous and biggest expo for Game industry (IGN, 2013). Announce the plan
of go to Japan Market and cooperation with GH
18/9/2014: The TGS-Tokyo Game Show in Tokyo: The biggest game show in
Japan. The detail of the operating of LoL will publish in this show also the
idea of “play LoL in Console”
11/11/2014: The Final beta test combine with PC and Console will start.
5/5/2015: The official operating of LoL in Japan and official world publish of
LoL in Console game.
6.2 Contingency plan
A contingency plan is a plan B prepared for if the implementation plan failed.
A prepare risk control plan for short-term and long-term problem of the Japan Game
market. There is one important process in the Implementation will be the most
uncontrolled element of the plan that we need to evaluate. The delay problem of the
new product---LoL in console game. Even we consider the time for redesign the game
as a console game is enough by cooperate with GungHo (5 months in Plan A), we still
need to consider about the fail of design quality. A base line for the problem is we
will not publish the LoL console game until the game is ready to be published with
high quality. And we also need to be loyalty to the customers.
First of all, we will require the R&D groups and main managers make evaluation
about the design progress at September, it is the middle month of the design plan and
in this months’s TGS show we plan to announce the plan of play in console. The Riot
Game Branch will evaluate ‘does the products can be publish in the official operating
date of Japan market. If not, the plan will change to Plan B:
1. The LoL in console game will not be publish in the TGS show in Tokyo, also will
not be publish with in the official operating date until we confirm it is totally
completed. To ensure the product can provide high quality services to our
customers.
2. The whole plan of the operating in Japan will not change. The PC part of the plan
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will continue and publish firstly in the official operating date as we plan. To
ensure what we promise to our Japan customers in the E3, the trust of customers
is very important to our company.
7.0 Marketing budget plan
Japan has a high rent cost and labour cost in the world especially in Tokyo, so
the branch operating expense become a main expense in the budget plan. And
consider with the Japan Game market, the market research fee, promotion and
products redesign also become an important expense for the game investment in
Japan.
According to this situation and the implementation plan, we make up a simple
budget plan of the marketing that dividing the major operating expenses into five
different factors in the Table 7.1: (The totally marketing investment budget can be
find in Appendix 1)
Operate Expense 2014(May-Dec) 2015(Jan-Apr) Total (12months)
Branch operate $1,114,000 $557,000 $1,671,000
Market Research $36,600 $22,800 $59,400
Product Design $166,660 $8,000 $174,660
Promotion/Ad $812,000 $118,000 $930,000
Interactive
Media(online)
$29,400 $15,200 $44,600
Total $2,158,660 $721,000 $2,879,660
Table 7.1: The simple summary of Market Budget for first year in Japan
The first thing that needs to be explained is the Branch operate as the highest
expense in the budget is consider with the high rent price in Tokyo, We are try to keep
it low as we can. But depend on the average rent price for business building is $183
for each square foot, the rent of the office cannot be reduce more (CBRE, 2013). The
second is the market research fees, this fees include the policy consulting, target
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market research in Japan to help our branch have a better understand of the policy and
culture of Japan Game market. Another thing need to mentioned is the plan of
promotion, it is decided not to keep invest in the TV ad and magazine, because the
kind promotion way is not popular to the youths which is our target customer group.
The promotion will focus on the interactive media with internet for example the
famous ACG website in Japan - NicoNico, and the biggest blog website Mixi, depend
on the low cost of this new promotion way, the expense of promotion will reduce
(Kono, S. 2009).
However, the total expense for the first financial year’s investment in Japan is
nearly three million. We think this is an affordable expense for we set up the business
in Japan game market. The potential market scale of the Japan Online game is nearly
$1400mm, the expense for such big game market is necessary (Yamazaki, F. n.d).
8.0 Conclusion
In conclusion, Riot games need to have a great preparation for all information
needed before entering Japan market. Japanese is a big game market for very game
companies, however, not all the games can be succeed. What works in the USA might
not be applied to Japan since there is a big difference between two cultures. It really
requires Riot games to have right strategies and tactics to survive and develop among
competitors and increase the total consumption.
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9.0 References
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million monthly. Retrieved from http://www.forbes.com/sites/insertcoin/2014/01/27/riots-
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http://www.gungho.co.jp/english/company/history.htmldd
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http://www.justlanded.com/english/Japan/Japan-Guide/Telephone-Internet/Internet
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