Japanese households are trimming overall spending as inflation squeezes budgets, but outlays on games are rising instead. Analysts describe it as selective spending — cutting essentials such as groceries while still opening their wallets for smartphone game purchases and gaming peripherals.
According to the Nihon Keizai Shimbun, or Nikkei, on the 16th, real household spending on "game software" — a category that includes in-game purchases and peripherals — rose year-on-year for eight straight months through July in the monthly household survey the Ministry of Internal Affairs and Communications conducts among about 9,000 households nationwide.
In July, spending in that category by households of two or more people jumped 2.4-fold from a year earlier. The longer-term trend also shows a sharp increase. Annual spending in the category came to 2,306 yen per household last year, roughly 20,300 won, double the level of a decade earlier.
Overall spending capacity, by contrast, is shrinking. Real consumption spending across all households averaged 301,245 yen per household in July, or about 2.65 million won, down 3.6% from a year earlier. Real consumption spending has now fallen year-on-year for eight consecutive months through July.
Food was no exception. Spending on food fell 1.3% from a year earlier in the same month. Even as rising prices force households to cut back on necessities, game-related spending moved in the opposite direction.
Gacha Draws and Limited-Time Items Fuel Demand
The increase was driven by in-game purchases on smartphones, according to the analysis. Nikkei cited an official at the Ministry of Internal Affairs and Communications as saying smartphone game purchases led the rise in game-related spending.
Experts also point to how the items are sold. Hideki Yasuda, an analyst at Toyo Securities, said "gacha" mechanics, in which players obtain items at random, and items sold only for a limited period carry a scarcity that can stoke the urge to spend. Consumers are willing to pay for the items they want even if it means cutting living costs, he said.
Easier payment methods have also played a role. As cashless payments made through smartphones and other devices become the norm, the psychological hurdle to spending on games has fallen.
Japanese consumers, in short, are shrinking their total outlays under inflation without cutting every category alike. Analysts say the same selective spending seen elsewhere — squeezing living costs such as food while spending relatively freely on hobbies and interests they value — is now showing up in the game market.
The rise in game spending shows that consumers can increase outlays in particular areas even as they close their wallets overall. In areas such as smartphone games, where small payments are repeated, spending may also accumulate without buyers feeling much of a price burden.
With high inflation persisting, the pattern of ranking necessities against hobbies and leisure, rather than cutting all spending by the same standard, is becoming more pronounced in Japan as well. Spending behavior is shifting toward saving on living costs while paying for desired experiences and goods.
