Video games in Japan

Video gaming in Japan is a major industry. Japanese game development is often identified with the golden age of video games, including Nintendo under Shigeru Miyamoto and Hiroshi Yamauchi, Sega during the same time period, Sony Computer Entertainment when it was based in Tokyo, and other companies such as Taito, Namco, Capcom, Square Enix, Konami, NEC, and SNK, among others.
The space is known for the catalogs of several major publishers, all of whom have competed in the video game console and video arcade markets at various points. Sega - Service Games, founded by American veterans in Japan after World War II - released Periscope in 1966, a major arcade hit in Japan, preceding several decades of success in the arcade industry there. Nintendo, a former hanafuda playing card vendor, rose to prominence during the 1980's with the release of the home video game console called the Famicom or "Family Computer", which became a major hit as the Nintendo Entertainment System or "NES" in the United States. Sony, already one of the world's largest electronics manufacturers, entered the market in 1994 with the Sony Playstation, one of the first home consoles to feature 3d graphics, almost immediately establishing itself as a major publisher in the space. Shigeru Miyamoto remains internationally renowned as a "father of videogaming" and is the only game developer so far to receive Japan's highest civilian honor, the 文化功労者 bunka kōrōsha or Person of Cultural Merit.
Arcade culture is a major influence among young Japanese, with Akihabara Electric Town being a major nexus of so-called otaku culture in Japan, which overlaps with videogaming heavily. The Japanese role-playing game is a major game genre innovated by Japan and remains popular both domestically and internationally, with titles like Final Fantasy and Dragon Quest selling millions.
The country has an estimated 67.6 million players in 2018.



In 1966, Sega introduced an electro-mechanical game called Periscope - a submarine simulator which used lights and plastic waves to simulate sinking ships from a submarine. It became an instant success in Japan, Europe, and North America, where it was the first arcade game to cost a quarter per play, which would remain the standard price for arcade games for many years to come.
Sega later produced gun games that used rear image projection in a manner similar to the ancient zoetrope to produce moving animations on a screen. The first of these, the light-gun game Duck Hunt, appeared in 1969; it featured animated moving targets on a screen, printed out the player's score on a ticket, and had volume-controllable sound-effects. Another Sega 1969 release, Missile, a shooter, featured electronic sound and a moving film strip to represent the targets on a projection screen.

1970s–early 1980s

Use of color graphics and individualized antagonists were considered "strong evolutionary concepts" among space ship games. The Namco Galaxian arcade system board also introduced multi-colored animated sprites. That same year saw the release of SNK's debut shoot 'em up Ozma Wars, notable for being the first action game to feature a supply of energy, resembling a life bar, a mechanic that has now become common in the majority of modern action games. It also featured vertically scrolling backgrounds and enemies.
Block Kuzushi.
Japan's first home video game console was Epoch's TV Tennis Electrotennis, a licensed version of the ping-pong game from the Magnavox Odyssey. It was followed by the first successful Japanese console, Nintendo's Color TV Game, in 1977.
Sega's black and white boxing game Heavyweight Champ was released in 1976 as the first video game to feature fist fighting. The first stealth games were Hiroshi Suzuki's Manbiki Shounen and Manbiki Shoujo, Taito's Lupin III, and Sega's 005.
, creator of the shooter game Space Invaders.
Eventually, the 1978 arcade release of Space Invaders would mark the first major mainstream breakthrough for video games in Japan. Created by Nishikado at Japan's Taito Corporation, Space Invaders pitted the player against multiple enemies descending from the top of the screen at a constantly increasing rate of speed. Space Invaders pitted the player against multiple enemies descending from the top of the screen at a constantly increasing rate of speed. The game used alien creatures inspired by The War of the Worlds because the developers were unable to render the movement of aircraft; in turn, the aliens replaced human enemies because of moral concerns on the part of Taito Corporation. As with subsequent shoot 'em ups of the time, the game was set in space as the available technology only permitted a black background. The game also introduced the idea of giving the player a number of "lives". It popularised a more interactive style of gameplay with the enemies responding to the player-controlled cannon's movement, and it was the first video game to popularise the concept of achieving a high score, being the first to save the player's score. The aliens of Space Invaders return fire at the protagonist, making them the first arcade game targets to do so. It set the template for the shoot 'em up genre, and has influenced most shooting games released since then.
Taito's Space Invaders, in 1978, proved to be the first blockbuster arcade video game. Its success marked the beginning of the golden age of arcade video games. Video game arcades sprang up in shopping malls, and small "corner arcades" appeared in restaurants, grocery stores, bars and movie theaters all over Japan and other countries during the late 1970s and early 1980s. Space Invaders, Galaxian, Pac-Man and Bosconian were especially popular. By 1981, the arcade video game industry was worth $8 billion. Some games of this era were so popular that they entered popular culture. The first to do so was Space Invaders. The game was so popular upon its release in 1978 that an urban legend blamed it for a national shortage of 100 yen coins in Japan, leading to a production increase of coins to meet demand for the game. Japanese arcade games during the golden age also had hardware unit sales at least in the tens of thousands, including Ms. Pac-Man with over 115,000 units, Donkey Kong with over 60,000, Galaxian with 40,000, Donkey Kong Jr. with 35,000, Mr. Do! with 30,000,

1980s–early 2000s

From 1980 to 1991, Nintendo produced a line of handheld electronic games called Game & Watch. Created by game designer Gunpei Yokoi, each Game & Watch features a single game to be played on an LCD screen. It was the earliest Nintendo product to gain major success.
Konami's Scramble, released in 1981, is a side-scrolling shooter with forced scrolling. It was the first scrolling shooter to offer multiple, distinct levels. Vertical scrolling shooters emerged around the same time. Namco's Xevious, released in 1982, is frequently cited as the first vertical scrolling shooter and, although it was in fact preceded by several other games of that type, it is considered one of the most influential.
The first platform game to use scrolling graphics was Jump Bug, a simple platform-shooter game developed by Alpha Denshi.
The North American video game industry was devastated by the 1983 video game crash, but in Japan, it was more of a surprise to developers, and typically known in Japan as the "Atari Shock". After the video game crash, analysts doubted the long-term viability of the video game industry. At the same time, following a series of arcade game successes in the early 1980s, Nintendo made plans to create a cartridge-based console called the Famicom, which is short for Family Computer. Masayuki Uemura designed the system. The console was released on July 15, 1983 as the Family Computer alongside three ports of Nintendo's successful arcade games Donkey Kong, Donkey Kong Jr. and Popeye. The Famicom was slow to gather momentum; a bad chip set caused the initial release of the system to crash. Following a product recall and a reissue with a new motherboard, the Famicom's popularity soared, becoming the best-selling game console in Japan by the end of 1984. By 1988, industry observers stated that the NES's popularity had grown so quickly that the market for Nintendo cartridges was larger than that for all home computer software. By mid-1986, 19% of Japanese households owned a Famicom; one third by mid-1988. In June 1989, Nintendo of America's vice president of marketing Peter Main, said that the Famicom was present in 37% of Japan's households. By the end of its run, over 60 million NES units had been sold throughout the world. In 1990 Nintendo surpassed Toyota as Japan's most successful corporation.
Because the NES was released after the "video game crash" of the early 1980s, many retailers and adults regarded electronic games as a passing fad, so many believed at first that the NES would soon fade. Before the NES/Famicom, Nintendo was known as a moderately successful Japanese toy and playing card manufacturer, but the popularity of the NES/Famicom helped the company grow into an internationally recognized name almost synonymous with video games as Atari had been, and set the stage for Japanese dominance of the video game industry. With the NES, Nintendo also changed the relationship between console manufacturers and third-party software developers by restricting developers from publishing and distributing software without licensed approval. This led to higher quality software titles, which helped change the attitude of a public that had grown weary from poorly produced titles for earlier game systems. The system's hardware limitations led to design principles that still influence the development of modern video games. Many prominent game franchises originated on the NES, including Nintendo's own Super Mario Bros., The Legend of Zelda and Metroid, Capcom's Mega Man franchise, Konami's Castlevania franchise, Square's Final Fantasy, and Enix's Dragon Quest franchises.
Following the release of the Famicom / Nintendo Entertainment System, the global video game industry began recovering, with annual sales exceeding $2.3 billion by 1988, with 70% of the market dominated by Nintendo. In 1986 Nintendo president Hiroshi Yamauchi noted that "Atari collapsed because they gave too much freedom to third-party developers and the market was swamped with rubbish games". In response, Nintendo limited the number of titles that third-party developers could release for their system each year, and promoted its "Seal of Quality", which it allowed to be used on games and peripherals by publishers that met Nintendo's quality standards.
Japan's first personal computers for gaming soon appeared, the Sord M200 in 1977 and Sharp MZ-80K in 1978. In Japan, both consoles and computers became major industries, with the console market dominated by Nintendo and the computer market dominated by NEC's PC-88 and PC-98. A key difference between Western and Japanese computers at the time was the display resolution, with Japanese systems using a higher resolution of 640x400 to accommodate Japanese text which in turn affected video game design and allowed more detailed graphics. Japanese computers were also using Yamaha's FM synth sound boards from the early 1980s. During the 16-bit era, the PC-98, Sharp X68000 and FM Towns became popular in Japan. The X68000 and FM Towns were capable of producing near arcade-quality hardware sprite graphics and sound quality when they first released in the mid-to-late 1980s.
The Wizardry series became popular and influential in Japan, even more so than at home. Japanese developers created the action RPG subgenre in the early 1980s, combining RPG elements with arcade-style action and action-adventure elements. The trend of combining role-playing elements with arcade-style action mechanics was popularized by The Tower of Druaga, an arcade game released by Namco in June 1984. While the RPG elements in Druaga were very subtle, its success in Japan inspired the near-simultaneous development of three early action role-playing games, combining Druagas real-time hack-and-slash gameplay with stronger RPG mechanics, all released in late 1984: Dragon Slayer, Courageous Perseus, and Hydlide. A rivalry developed between the three games, with Dragon Slayer and Hydlide continuing their rivalry through subsequent sequels. The Tower of Druaga, Dragon Slayer and Hydlide were influential in Japan, where they laid the foundations for the action RPG genre, influencing titles such as Ys and The Legend of Zelda.
The action role-playing game Hydlide was an early open world game, rewarding exploration in an open world environment. Hylide influenced The Legend of Zelda, an influential open world game. Zelda had an expansive, coherent open world design, inspiring many games to adopt a similar open world design.
Bokosuka Wars is considered an early prototype real-time strategy game. TechnoSoft's Herzog is regarded as a precursor to the real-time strategy genre, being the predecessor to Herzog Zwei and somewhat similar in nature. Herzog Zwei, released for the Sega Mega Drive/Genesis home console in 1989, is the earliest example of a game with a feature set that falls under the contemporary definition of modern real-time strategy.
Data East's Karate Champ from 1984 is credited with establishing and popularizing the one-on-one fighting game genre, and went on to influence Konami's Yie Ar Kung-Fu from 1985. Capcom's Street Fighter introduced the use of special moves that could only be discovered by experimenting with the game controls. Street Fighter II established the conventions of the fighting game genre and allowed players to play against each other.
In 1985, Sega AM2's Hang-On, designed by Yu Suzuki and running on the Sega Space Harrier hardware, was the first of Sega's "Super Scaler" arcade system boards that allowed pseudo-3D sprite-scaling at high frame rates. The pseudo-3D sprite/tile scaling was handled in a similar manner to textures in later texture-mapped polygonal 3D games of the 1990s. Designed by Sega AM2's Yu Suzuki, he stated that his "designs were always 3D from the beginning. All the calculations in the system were 3D, even from Hang-On. I calculated the position, scale, and zoom rate in 3D and converted it backwards to 2D. So I was always thinking in 3D." It was controlled using a video game arcade cabinet resembling a motorbike, which the player moves with their body. This began the "Taikan" trend, the use of motion-controlled hydraulic arcade cabinets in many arcade games of the late 1980s, two decades before motion controls became popular on video game consoles.
Sega's Space Harrier, a rail shooter released in 1985, broke new ground graphically and its wide variety of settings across multiple levels gave players more to aim for than high scores. 1985 also saw the release of Konami's Gradius, which gave the player greater control over the choice of weaponry, thus introducing another element of strategy. The game also introduced the need for the player to memorise levels in order to achieve any measure of success. Gradius, with its iconic protagonist, defined the side-scrolling shoot 'em up and spawned a series spanning several sequels. The following year saw the emergence of one of Sega's forefront series with its game Fantasy Zone. The game received acclaim for its surreal graphics and setting and the protagonist, Opa-Opa, was for a time considered Sega's mascot. The game borrowed Defender's device of allowing the player to control the direction of flight and along with the earlier TwinBee, is an early archetype of the "cute 'em up" subgenre.
' in 1985 featured an early morality meter, where the player can be aligned with justice, normal, or evil, which is affected by whether the player kills evil monsters, good monsters, or humans, and in turn affects the reactions of the townsfolk towards the player. In the same year, Yuji Horii and his team at Chunsoft began production on Dragon Quest. After Enix published the game in early 1986, it became the template for future console RPGs. Horii's intention behind Dragon Quest was to create a RPG that appeals to a wider audience unfamiliar with the genre or video games in general. This required the creation of a new kind of RPG, that didn't rely on previous D&D experience, didn't require hundreds of hours of rote fighting, and that could appeal to any kind of gamer. The streamlined gameplay of Dragon Quest thus made the game more accessible to a wider audience than previous computer RPGs. The game also placed a greater emphasis on storytelling and emotional involvement, building on Horii's previous work Portopia Serial Murder Case, but this time introducing a coming of age tale for Dragon Quest that audiences could relate to, making use of the RPG level-building gameplay as a way to represent this. It also featured elements still found in most console RPGs, like major quests interwoven with minor subquests, an incremental spell system, the damsel-in-distress storyline that many RPGs follow, and a romance element that remains a staple of the genre, alongside anime-style art by Akira Toriyama and a classical score by Koichi Sugiyama that was considered revolutionary for console video game music. With Dragon Quest becoming widely popular in Japan, such that local municipalities were forced to place restrictions on where and when the game could be sold, the Dragon Quest series is still considered a bellwether for the Japanese video game market.
Shoot 'em ups featuring characters on foot, rather than spacecraft, became popular in the mid-1980s in the wake of action movies such as . The origins of this type go back to Sheriff by Nintendo, released in 1979. Taito's Front Line established the upwards-scrolling formula later popularized by Capcom's Commando, in 1985, and SNK's Ikari Warriors. Commando also drew comparisons to Rambo and indeed contemporary critics considered military themes and protagonists similar to Rambo or Schwarzenegger prerequisites for a shoot 'em up, as opposed to an action-adventure game. In 1986, Arsys Software released WiBArm, a shooter that switched between a 2D side-scrolling view in outdoor areas to a fully 3D polygonal third-person perspective inside buildings, while bosses were fought in an arena-style 2D battle, with the game featuring a variety of weapons and equipment.
The late 1980s to early 1990s is considered the golden age of Japanese computer gaming, which would flourish until its decline around the mid-1990s, as consoles eventually dominated the Japanese market. A notable Japanese computer RPG from around this time was WiBArm, the earliest known RPG to feature 3D polygonal graphics. It was a 1986 role-playing shooter released by Arsys Software for the PC-88 in Japan and ported to MS-DOS for Western release by Brøderbund. In WiBArm, the player controls a transformable mecha robot, switching between a 2D side-scrolling view during outdoor exploration to a fully 3D polygonal third-person perspective inside buildings, while bosses are fought in an arena-style 2D shoot 'em up battle. The game featured a variety of weapons and equipment as well as an automap, and the player could upgrade equipment and earn experience to raise stats. Unlike first-person RPGs at the time that were restricted to 90-degree movements, WiBArm's use of 3D polygons allowed full 360-degree movement.
, released in 1987.
On October 30, 1987, the PC Engine made its debut in the Japanese market and it was a tremendous success. The console had an elegant, "eye-catching" design, and it was very small compared to its rivals. The PC Engine, TurboGrafx-16, known as TurboGrafx-16 in the rest of the world, was a collaborative effort between Hudson Soft, who created video game software, and NEC, a major company which was dominant in the Japanese personal computer market with their PC-88 and PC-98 platforms.
R-Type, an acclaimed side-scrolling shoot 'em up, was released in 1987 by Irem, employing slower paced scrolling than usual, with difficult levels calling for methodical strategies. 1990's Raiden was the beginning of another acclaimed and enduring series to emerge from this period. In 1987, Square's 3-D WorldRunner was an early stereoscopic 3-D shooter played from a third-person perspective, followed later that year by its sequel JJ, and the following year by Space Harrier 3-D which used the SegaScope 3-D shutter glasses. Also in 1987, Konami created Contra as a coin-op arcade game that was particularly acclaimed for its multi-directional aiming and two player cooperative gameplay.
' by Atlus for the Nintendo Famicom abandoned the common medieval fantasy setting and sword and sorcery theme in favour of a modern science-fiction setting and horror theme. It also introduced the monster-catching mechanic with its demon-summoning system, which allowed the player to recruit enemies into their party, through a conversation system that gives the player a choice of whether to kill or spare an enemy and allows them to engage any opponent in conversation. Sega's original Phantasy Star for the Master System combined sci-fi & fantasy setting that set it apart from the D&D staple. It was also one of the first games to feature a female protagonist and animated monster encounters, and allowed inter-planetary travel between three planets. Another 1987 title ' was a third-person RPG that featured a wide open world and a mini-map on the corner of the screen.
According to Wizardry developer Roe R. Adams, early action-adventure games "were basically arcade games done in a fantasy setting," citing Castlevania and Trojan as examples. IGN UK argues that The Legend of Zelda "helped to establish a new subgenre of action-adventure", becoming a success due to how it combined elements from different genres to create a compelling hybrid, including exploration, adventure-style inventory puzzles, an action component, a monetary system, and simplified RPG-style level building without the experience points. The Legend of Zelda was the most prolific action-adventure game series through to the 2000s.
The first Nintendo Space World show was held on July 28, 1989. It was a video game trade show that was hosted by Nintendo until 2001. At the same year, Phantasy Star II for the Genesis established many conventions of the RPG genre, including an epic, dramatic, character-driven storyline dealing with serious themes and subject matter, and a strategy-based battle system. The game's science fiction story was also unique, reversing the common alien invasion scenario by instead presenting Earthlings as the invading antagonists rather than the defending protagonists. Capcom's Sweet Home for the NES introduced a modern Japanese horror theme and laid the foundations for the survival horror genre, later serving as the main inspiration for Resident Evil. Tengai Makyo: Ziria released for the PC Engine CD that same year was the first RPG released on CD-ROM and the first in the genre to feature animated cut scenes and voice acting. The game's plot was also unusual for its feudal Japan setting and its emphasis on humour; the plot and characters were inspired by the Japanese folk tale Jiraiya Goketsu Monogatari. The music for the game was also composed by noted musician Ryuichi Sakamoto.
The ‘golden age’ of console RPGs is often dated in the 1990s. Console RPGs distinguished themselves from computer RPGs to a greater degree in the early 1990s. As console RPGs became more heavily story-based than their computer counterparts, one of the major differences that emerged during this time was in the portrayal of the characters, with most American computer RPGs at the time having characters devoid of personality or background as their purpose was to represent avatars which the player uses to interact with the world, in contrast to Japanese console RPGs which depicted pre-defined characters who had distinctive personalities, traits, and relationships, such as Final Fantasy and Lufia, with players assuming the roles of people who cared about each other, fell in love or even had families. Romance in particular was a theme that was common in most console RPGs but alien to most computer RPGs at the time. Japanese console RPGs were also generally more faster-paced and action-adventure-oriented than their American computer counterparts. During the 1990s, console RPGs had become increasingly dominant.
In 1990,
' introduced a new method of storytelling: segmenting the plot into segregated chapters. The game also introduced an AI system called "Tactics" which allowed the player to modify the strategies used by the allied party members while maintaining full control of the hero. Final Fantasy III introduced the classic "job system", a character progression engine allowing the player to change the character classes, as well as acquire new and advanced classes and combine class abilities, during the course of the game. That same year also saw the release of Nintendo's ', a game that set the template for the tactical role-playing game genre and was the first entry in the Fire Emblem series. Another notable strategy RPG that year was Koei's Bandit Kings of Ancient China, which was successful in combining the strategy RPG and management simulation genres, building on its own Nobunaga's Ambition series that began in 1983. Several early RPGs set in a post-apocalyptic future were also released that year, including ', and Crystalis, which was inspired by Hayao Miyazaki's Nausicaa of the Valley of the Wind. Crystalis also made advances to the action role-playing game subgenre, being a true action RPG that combined the real-time action-adventure combat and open world of The Legend of Zelda with the level-building and spell-casting of traditional RPGs like Final Fantasy. That year also saw the release of ', which featured an innovative and original branching storyline, which spans three generations of characters and can be altered depending on which character the protagonist of each generation marries, leading to four possible endings.
In 1991, Final Fantasy IV was one of the first role-playing games to feature a complex, involving plot, placing a much greater emphasis on character development, personal relationships, and dramatic storytelling. It also introduced a new battle system: the "Active Time Battle" system, developed by Hiroyuki Ito, where the time-keeping system does not stop. The fact that enemies can attack or be attacked at any time is credited with injecting urgency and excitement into the combat system. The ATB combat system was considered revolutionary for being a hybrid between turn-based and real-time combat, with its requirement of faster reactions from players appealing to those who were more used to action games.
Nintendo executives were initially reluctant to design a new system, but as the market transitioned to the newer hardware, Nintendo saw the erosion of the commanding market share it had built up with the Nintendo Entertainment System. Nintendo's fourth-generation console, the Super Famicom, was released in Japan on November 21, 1990; Nintendo's initial shipment of 300,000 units sold out within hours. Despite stiff competition from the Mega Drive/Genesis console, the Super NES eventually took the top selling position, selling 49.10 million units worldwide, and would remain popular well into the fifth generation of consoles. Nintendo's market position was defined by their machine's increased video and sound capabilities, as well as exclusive first-party franchise titles such as Super Mario World,
' and Super Metroid.
In the early 1990s, the arcades experienced a major resurgence with the 1991 release of Capcom's Street Fighter II, which popularized competitive fighting games and revived the arcade industry to a level of popularity not seen since the days of Pac-Man, setting off a renaissance for the arcade game industry in the early 1990s. Its success led to a wave of other popular games which mostly were in the fighting genre, such as ' by SNK, Virtua Fighter by SEGA, and The King of Fighters by SNK. In 1993, Electronic Games noted that when "historians look back at the world of coin-op during the early 1990s, one of the defining highlights of the video game art form will undoubtedly focus on fighting/martial arts themes" which it described as "the backbone of the industry" at the time.
A new type of shoot 'em up emerged in the early 1990s: variously termed "bullet hell", "manic shooters", "maniac shooters" and danmaku, these games required the player to dodge overwhelming numbers of enemy projectiles and called for still more consistent reactions from players. Bullet hell games arose from the need for 2D shoot 'em up developers to compete with the emerging popularity of 3D games: huge numbers of missiles on screen were intended to impress players. Toaplan's Batsugun provided the prototypical template for this new breed, with Cave inventing the type proper with 1995's DonPachi. Bullet hell games marked another point where the shoot 'em up genre began to cater to more dedicated players. Games such as Gradius had been more difficult than Space Invaders or Xevious, but bullet hell games were yet more inward-looking and aimed at dedicated fans of the genre looking for greater challenges. While shooter games featuring protagonists on foot largely moved to 3D-based genres, popular, long-running series such as Contra and Metal Slug continued to receive new sequels. Rail shooters have rarely been released in the new millennium, with only Rez and Panzer Dragoon Orta achieving cult recognition.
1992 saw the release of Dragon Quest V, a game that has been praised for its involving, emotional family-themed narrative divided by different periods of time, something that has appeared in very few video games before or since. It has also been credited as the first known video game to feature a playable pregnancy, a concept that has since appeared in later games such as Story of Seasons. Dragon Quest V's monster-collecting mechanic, where monsters can be defeated, captured, added to the party, and gain their own experience levels, also influenced many later franchises such as Pokémon, Digimon and Dokapon. In turn, the concept of collecting everything in a game, in the form of achievements or similar rewards, has since become a common trend in video games. Shin Megami Tensei, released in 1992 for the SNES, introduced an early moral alignment system that influences the direction and outcome of the storyline, leading to different possible paths and multiple endings. This has since become a hallmark of the Megami Tensei series. Another non-linear RPG released that year was Romancing Saga, an open-world RPG by Square that offered many choices and allowed players to complete quests in any order, with the decision of whether or not to participate in any particular quest affecting the outcome of the storyline. The game also allowed players to choose from eight different characters, each with their own stories that start in different places and offer different outcomes. Data East's Heracles no Eikō III, written by Kazushige Nojima, introduced the plot element of a nameless immortal suffering from amnesia, and Nojima would later revisit the amnesia theme in Final Fantasy VII and Glory of Heracles. The TurboGrafx-CD port of Dragon Knight II released that year was also notable for introducing erotic adult content to consoles, though such content had often appeared in Japanese computer RPGs since the early 1980s. That same year, Game Arts began the Lunar series on the Sega CD with
', one of the first successful CD-ROM RPGs, featuring both voice and text, and considered one of the best RPGs in its time. The game was praised for its soundtrack, emotionally engaging storyline, and strong characterization. It also introduced an early form of level-scaling where the bosses would get stronger depending on the protagonist's level, a mechanic that was later used in Enix's The 7th Saga and extended to normal enemies in Square's Romancing Saga 3 and later Final Fantasy VIII.
3D polygon graphics were popularized by the Sega Model 1 games Virtua Racing and Virtua Fighter, followed by racing games like the Namco System 22 title Ridge Racer and Sega Model 2 title Daytona USA, and light gun shooters like Sega's Virtua Cop, gaining considerable popularity in the arcades.
In 1993, Square's Secret of Mana, the second in the Mana series, further advanced the action RPG subgenre with its introduction of cooperative multiplayer into the genre. The game was created by a team previously responsible for the first three Final Fantasy titles: Nasir Gebelli, Koichi Ishii, and Hiromichi Tanaka. The game received considerable acclaim, for its innovative pausable real-time battle system, the "Ring Command" menu system, its innovative cooperative multiplayer gameplay, where the second or third players could drop in and out of the game at any time rather than players having to join the game at the same time, and the customizable AI settings for computer-controlled allies. The game has influenced a number of later action RPGs. That same year also saw the release of ', which introduced the use of pre-programmable combat manoeuvers called 'macros', a means of setting up the player's party AI to deliver custom attack combos. That year also saw the release of Romancing Saga 2, which further expanded the non-linear gameplay of its predecessor. While in the original Romancing Saga, scenarios were changed according to dialogue choices during conversations, Romancing Saga 2 further expanded on this by having unique storylines for each character that can change depending on the player's actions, including who is chosen, what is said in conversation, what events have occurred, and who is present in the party. PCGamesN credits Romancing SaGa 2 for having laid the foundations for modern Japanese RPGs with its progressive, non-linear, open world design and subversive themes.
In 1994, Final Fantasy VI moved away from the medieval setting of its predecessors, instead being set in a steampunk environment,. The game received considerable acclaim, and is seen as one of the greatest RPGs of all time, for improvements such as its broadened thematic scope, plotlines, characters, multiple-choice scenarios, and variation of play. Final Fantasy VI dealt with mature themes such as suicide, war crimes, child abandonment, teen pregnancy, and coping with the deaths of loved ones. Square's Live A Live, released for the Super Famicom in Japan, featured eight different characters and stories, with the first seven unfolding in any order the player chooses, as well as four different endings. The game's ninja chapter in particular was an early example of stealth game elements in an RPG, requiring the player to infiltrate a castle, rewarding the player if the entire chapter can be completed without engaging in combat. Other chapters had similar innovations, such as Akira's chapter where the character uses telepathic powers to discover information. Robotrek by Quintet and Ancient was a predecessor to Pokémon in the sense that the protagonist does not himself fight, but sends out his robots to do so. Like Pokémon, Robotrek was designed to appeal to a younger audience, allowed team customization, and each robot was kept in a ball.
FromSoftware released their first video game, titled King's Field, as a launch title for the PlayStation in 1994. The game was later called the brainchild of company CEO Naotoshi Jin, who was later considered a key creative figure in the series. The eventual success of the first King's Field prompted the development of sequels, establishing the King's Field series. The design of King's Field would influence later titles by FromSoftware including Shadow Tower, which used similar mechanics to King's Field; and Demon's Souls, described by its staff as a spiritual successor to King's Field, and inspired multiple follow-up titles which form part of the Souls series and propelled FromSoftware to international fame.
In 1995, Square's Romancing Saga 3 featured a storyline that could be told differently from the perspectives of up to eight different characters and introduced a level-scaling system where the enemies get stronger as the characters do, a mechanic that was later used in a number of later RPGs, including Final Fantasy VIII. Sega's Sakura Wars for the Saturn combined tactical RPG combat with dating sim and visual novel elements, introducing a real-time branching choice system where, during an event or conversation, the player must choose an action or dialogue choice within a time limit, or not to respond at all within that time; the player's choice, or lack thereof, affects the player character's relationship with other characters and in turn the characters' performance in battle, the direction of the storyline, and the ending. Later games in the series added several variations, including an action gauge that can be raised up or down depending on the situation, and a gauge that the player can manipulate using the analog stick depending on the situation. The success of Sakura Wars led to a wave of games that combine the RPG and dating sim genres, including Thousand Arms in 1998,
' in 2002, and Luminous Arc in 2007.
The survival horror video game genre began with Capcom's Resident Evil, which coined the term "survival horror" and defined the genre. The game was inspired by Capcom's Sweet Home, retroactively described as survival horror.
The first Tokyo Game Show was held in 1996. From 1996 to 2002, the show was held twice a year: once in the Spring and once in Autumn. Since 2002, the show has been held once a year. It attracts more visitors every year. 2011's show hosted over 200,000 attendees and the 2012 show bringing in 223,753. The busiest TGS was in 2016 with 271,224 people in attendance and 614 companies had exhibits. The event has been held annually since 1996 and was never canceled. The 20th anniversary of TGS was celebrated in 2016.
The Fujitsu FM Towns Marty is considered the world's first 32-bit console, being released only released in Japan on February 20, 1993 by Fujitsu. However, it failed to make an impact in the marketplace due to its expense relative to other consoles and inability to compete with home computers. Around the mid-1990s, the fifth-generation home consoles, Sega Saturn, PlayStation, and Nintendo 64, began offering true 3D graphics, improved sound, and better 2D graphics, than the previous generation. By 1995, personal computers followed, with 3D accelerator cards. While arcade systems such as the Sega Model 3 remained considerably more advanced than home systems in the late 1990s.
The next major revolution came in the mid-to-late 1990s, which saw the rise of 3D computer graphics and optical discs in fifth generation consoles. The implications for RPGs were enormous—longer, more involved quests, better audio, and full-motion video. This was clearly demonstrated in 1997 by the phenomenal success of Final Fantasy VII, which is considered one of the most influential games of all time, akin to that of Star Wars in the movie industry. With a record-breaking production budget of around $45 million, the ambitious scope of Final Fantasy VII raised the possibilities for the genre, with its more expansive world to explore, much longer quest, more numerous sidequests, dozens of minigames, and much higher production values. The latter includes innovations such as the use of 3D characters on pre-rendered backgrounds, battles viewed from multiple different angles rather than a single angle, and for the first time full-motion CGI video seamlessly blended into the gameplay, effectively integrated throughout the game. Gameplay innovations included the materia system, which allowed a considerable amount of customization and flexibility through materia that can be combined in many different ways and exchanged between characters at any time, and the limit breaks, special attacks that can be performed after a character's limit meter fills up by taking hits from opponents. Final Fantasy VII continues to be listed among the best games of all time, for its highly polished gameplay, high playability, lavish production, well-developed characters, intricate storyline, and an emotionally engaging narrative that is much darker and sophisticated than most other RPGs. The game's storytelling and character development was considered a major narrative jump forward for video games and was often compared to films and novels at the time.
One of the earliest Japanese RPGs, Koei's The Dragon and Princess, featured a tactical turn-based combat system. Koji Sumii's Bokosuka Wars, originally released for the Sharp X1 computer in 1983 and later ported to the NES in 1985, is credited for laying the foundations for the tactical RPG genre, or "simulation RPG" genre as it is known in Japan, with its blend of basic RPG and strategy game elements. The genre became with the game that set the template for tactical RPGs, '.
Treasure's shoot 'em up, Radiant Silvergun, introduced an element of narrative to the genre. It was critically acclaimed for its refined design, though it was not released outside Japan and remains a much sought after collector's item. Its successor Ikaruga featured improved graphics and was again acclaimed as one of the best games in the genre. Both Radiant Silvergun and Ikaruga were later released on Xbox Live Arcade. The Touhou Project series spans 22 years and 27 games as of 2018 and was listed in the Guinness World Records in October 2010 for being the "most prolific fan-made shooter series". The genre has undergone something of a resurgence with the release of the Xbox 360, PlayStation 3 and Wii online services, while in Japan arcade shoot 'em ups retain a deep-rooted niche popularity.
' was released on Xbox Live Arcade in 2005 and in particular stood out from the various re-releases and casual games available on the service. The PC has also seen its share of dōjin shoot 'em ups like Crimzon Clover, , Xenoslaive Overdrive, and the eXceed series. However, despite the genre's continued appeal to an enthusiastic niche of players, shoot 'em up developers are increasingly embattled financially by the power of home consoles and their attendant genres.

2005 - 2015

In 2002, the Japanese video game industry made up about 50% of the global market; that share has since shrunk to around 10% by 2010. The shrinkage in market share has been attributed to a difference of taste between Japanese and Western audiences, and the country's economic recession.
In 2009, FromSoftware released Demon's Souls for the PlayStation 3, which brought them international exposure. Its spiritual successor, Dark Souls, was released in 2011. In March 2014, Dark Souls II, was released, while Dark Souls III was released in 2016. A title inspired by the Souls series, Bloodborne, was released in March 2015. The Souls series, along with Bloodborne, received widespread critical acclaim, as well as strong sales domestically and internationally. They have also received a number of awards, primarily those for the role-playing genre, including multiple "RPG of the Year" and Game of the Year awards. Since release, Dark Souls and Bloodborne have been cited by many publications to be among the greatest games of all time.
The decline of the Japanese video game development industry during this period was partially attributed to the traditional development process. Japanese companies were criticized for long development times and slow release dates on home video game consoles, their lack of third-party game engines, and for being too insular to appeal to a global market. Yoichi Wada stated in the Financial Times on April 27, 2009 that the Japanese video game development industry has become a "closed environment" and "almost xenophobic." He also stated: "The lag with the US is very clear. The US games industry was not good in the past but it has now attracted people from the computer industry and from Hollywood, which has led to strong growth." At the 2010 Tokyo Game Show, Keiji Inafune stated that "Everyone's making awful games - Japan is at least five years behind", and that "Japan is isolated in the gaming world. If something doesn't change, we're doomed.", stressing the need for Japanese developers to bring in Western approaches to game development to make a comeback.
Related to the isolationism, games developed in Western countries did not perform well in Japan, whereas Japanese games were readily played by Western market consumers. Foreign games often sell more poorly in Japanese markets due to differences in what consumers expect for escapism between these cultures. Microsoft had attempted to push both the Xbox and Xbox 360 consoles in Japan with poor success, at they struggled to compete against Sony and Nintendo there.
However, as detailed above, Japanese console games became less successful, even in their own country, as of 2013.
In the Japanese gaming industry, arcades have remained popular through to the present day. As of 2009, out of Japan's $20 billion gaming market, $6 billion of that amount is generated from arcades, which represent the largest sector of the Japanese video game market, followed by home console games and mobile games at $3.5 billion and $2 billion, respectively. In 2005, arcade ownership and operation accounted for a majority of Namco's for example. With considerable withdrawal from the arcade market from companies such as Capcom, Sega became the strongest player in the arcade market with 60% marketshare in 2006. Despite the global decline of arcades, Japanese companies hit record revenue for three consecutive years during this period. However, due to the country's economic recession, the Japanese arcade industry has also been steadily declining, from ¥702.9 billion in 2007 to ¥504.3 billion in 2010. In 2013, estimation of revenue is ¥470 billion.
In the 2010s, Japanese RPGs have been experiencing a resurgence on PC, with a significant increase in the number of Japanese RPGs releasing for the Steam platform. This began with the 2010 release of doujin/indie game Recettear for Steam, selling over 500,000 units on the platform. This led to many Japanese doujin/indie games releasing on Steam in subsequent years.
Beyond doujin/indie titles, 2012 was a breakthrough year, with the debut of Nihon Falcom's Ys series on Steam and then the Steam release of From Software's Dark Souls, which sold millions on the platform. Other Japanese RPGs were subsequently ported to Steam, such as the previously niche Valkyria Chronicles which became a million-seller on the platform, and other titles that sold hundreds of thousands on Steam, such as the 2014 localization of and ports of numerous Final Fantasy titles. Japanese developers have been increasingly considering Steam as a viable platform for the genre, with many Japanese RPGs available on the platform.
By 2015, Japan had become the world's fourth largest PC game market, behind only China, the United States, and South Korea. The Japanese game development engine RPG Maker has also gained significant popularity on Steam, including hundreds of commercial games. Every year, hundreds of games released on Steam are created using RPG Maker, as of 2017.
In the present day, Japan is the world's largest market for mobile games. The Japanese market today is becoming increasingly dominated by mobile games, which generated $5.1 billion in 2013, more than traditional console games in the country.
Former rivals in the Japanese arcade industry, Konami, Taito, Bandai Namco Entertainment and Sega, are now working together to keep the arcade industry vibrant. This is evidenced in the sharing of arcade networks, and venues having games from all major companies rather than only games from their own company.

2016 - present

Since 2016, Japanese video games have been experiencing a resurgence, as part of a renaissance for the Japanese video game industry. In 2017, Japanese video games gained further commercial success and greater critical acclaim. In 2016, the global success of Pokémon Go helped Pokémon Sun and Moon set sales records around the world. Final Fantasy XV was also a major success, selling millions. There were also other Japanese RPGs that earned commercial success and/or critical acclaim that year, including ', ', Bravely Second, Fire Emblem Fates, Dragon Quest Builders, World of Final Fantasy, ' and I Am Setsuna.
In 2017, Japanese RPGs gained further commercial success and greater critical acclaim. The year started strong with Gravity Rush 2, followed by Yakuza 0, which some critics consider the best in the Yakuza series, Nioh which is considered to have one of the eighth-generation's best RPG combat systems, and then Nier Automata which has gameplay and storytelling thought to be some of the best in recent years. Persona 5 won the Best Role Playing Game award at The Game Awards 2017. Some Japanese RPGs that were previously considered niche became mainstream million-sellers in 2017, including Persona 5, Nier: Automata, Nioh, and Xenoblade Chronicles 2 on the Nintendo Switch. 2017 was considered a strong year for Japanese RPGs, with other notable releases including Dragon Quest VIII on the Nintendo 3DS, Tales of Berseria, Valkyria Revolution, Ever Oasis,
', Ys VIII, Etrian Odyssey V, Dragon Quest Heroes II, ', ', ', and Tokyo Xanadu. In 2018, ' sold over 10million units, becoming Capcom's best-selling single software title, and Square Enix's Octopath Traveler sold over 1million units.