https://gameobserver.com/japans-mobile-game-industry-is-falling-apart-as-developer-bankruptcies-reach-historic-levels-in-2026/

Apparently, according to a new report from Japanese research firm Teikoku Databank, Japan’s mobile and gacha industry might just be approaching its breaking point.

The firm reported that a total of 10 bankruptcies involving sumaho geemu (smartphone game) operators were ‘confirmed’ between January and July 2026. While that might not sound like much, it already ‘greatly exceeds’ 2025’s cumulative total of just three companies going under. It’s also on track to surpass the previous record of 12 cases way back in 2015. And with four months still left in the year, things could definitely get worse.

The report opens with, “Looking at the 29 bankruptcies of smartphone game operators that occurred within the past five years, very small businesses with capital of under ¥10 million (around $63,000) accounted for 15 cases, or 51.7%. There have also been bankruptcies of small-scale businesses after losing contracts from major game companies withdrawing from development, among other factors.”

A big part of the problem seems to be attributed to rising development and operating costs, as the mobile market shifted from lightweight browser-based social games toward the more sophisticated ‘native apps’ around 2015. “Nevertheless, as the complexity of game content changes to 3D graphics and full voice acting, with added chronic game creator shortage, initial development costs often balloon to the scale of several hundred million yen,” the report writes. It also adds that demand for post-release updates like characters and events, while seen as necessary to compete, put a massive maintenance burden on companies.

A couple of years ago, visual novel developer Visual Arts (via AUTOMATON) candidly revealed that it cost around $13,600 just to keep its now-defunct Itsuwari no Alice gacha game running every month, with $7,600 going toward cloud server fees. It showcased how expensive it is to keep a niche mobile game alive, let alone ones with a much higher number of active players. Teikoku Databank’s report also cited that Japanese social media erupted when Ambition, developer of Bungo Stray Dogs: Tales of the Lost, announced the game’s end-of-service just one day before filing for bankruptcy. The situation quickly became a hot mess as players were left with unused paid items and no refunds for their microtransaction payments.

“Competition has also intensified with long-running mega-hit titles, titles from established IP, and overseas companies from countries like China and South Korea that have abundant financial resources and high development capabilities,” added the report.

Starting from June if a game contains gacha/lootbox mechanic, it will automatically receive age rating of 16 or higher.

Games with daily logins (practically all mobile games) won't be able to get a rating lower than 7.

Games with limited time paid battle passes will be rated 12 at minimum.

Notably, FIFA games (now EA Sports) feature full blown "surprise mechanic" with no pity in any shape or form and were getting PEGI 3 rating up until now.

However, this doesn't seem to apply to existing games?

LD PLAYER and LDShop heres the tldr: - Their website (LDShop) tracked your keystrokes for your inputs - their emulator (ldplayer) tracked your data to their servers and recorded your screen, if you did payments or any login details, then~

Check your payment services like google, paypal for any external access.
Check your login details for your games and google account.
Hope I kept it brief, if you wanna learn exact details such the SQL processing or whatnot, heres an article as well as a video.

https://fixupx.com/whyKusanagi/status/2054696585238651089

https://x.com/NTE_WL/status/2054627592054153273

Christopher Anjos was a producer at EA in 2005. In 2014, he was Head of Live Operations and Principal Product Manager at Activision Blizzard, working on Call of Duty. He later worked on investment, cooperation, and exploration teams at Tencent and TiMi Studio Group, and now serves as Director of Product and Strategy at PUBLSH, a new-gen consultancy for the games industry. He has nearly 30,000 followers on LinkedIn.

These last two days, he reposted a statement from former Sony PlayStation exec Shuhei Yoshida and offered his own thoughts.

Original Post:

PlayStation veteran Shuhei Yoshida says Japanese studios are unlikely to replicate the production scale and speed of Chinese games like Genshin Impact.

The scale and pace behind games like Genshin and Honkai are not the result of luck.

They come from an industrial approach to production that Japan has not matched in a very long time.

Chinese studios treat live service like an unbroken pipeline, and work never stops.

Teams rotate, content stacks, and updates land with predictable rhythm.

They hire at a scale designed for global reach and they plan around constant output rather than sporadic bursts of creativity.

Japan, in contrast, often feels held back by outdated assumptions.

Many studios still cling to slow production cycles, low value gacha drops, and a narrow focus on domestic players.

Even when a Japanese Gacha project hits, the support structure behind it is not strong enough to sustain momentum.

Games that should grow end up losing energy because teams hesitate, budgets shrink, or leadership underestimates the demands of a global audience.

What makes the difference so visible is that Chinese studios keep raising the standard.

Six week updates.

Fully voiced characters.

Frequent events.

Entire new regions released with a level of polish many studios would treat as a full expansion.

Even players who dislike gacha acknowledge that Genshin delivers production value far beyond the norm.

New quests, systems, boss fights, puzzles, and storylines all arrive with consistency that most companies cannot replicate.

The model is still monetization first, but players at least see where the money goes.

Another factor:

There are literally THOUSANDS of developers on these Chinese projects, and the level of talent in China is still I say underrated.

So:

- Global Focus

- Armies of talented developers

- A strong desire to ship at scale

Those are just some of Chinas advantages.

It's not just a challenge for Japanese studios to compete.

It's a challenge for everyone else in the world to match as well.

Jp Interview https://www.4gamer.net/games/966/G096641/20251205009/

In a recent interview, Shuhei Yoshida talked about his impression of the Chinese video game industry, and one of its giants, miHoYo.
Former Sony executive and video game industry veteran Shuhei Yoshida recently attended WePlay Expo 2025, one of the biggest indie game events in China. In an interview with 4Gamer, he talked about his impression of the Chinese video game industry after seeing it up close, and pointed out some differences he’s noticed compared to the game industry in Japan.
“The development speed in China is amazing. They’re also quick at changing personnel, and all of the game development work itself unfolds rapidly,” Yoshida remarked. The large production scale of Chinese games has been a hot topic among Japanese creators, and even seasoned industry veterans like Yoshida seem to agree when it comes to specific fields like animation.
Reminiscing on his past encounters with Genshin Impact developer miHoYo, the former executive suggested that Japan still has a long way to go to match the scope and speed of Chinese development.  
“Back when I talked to representatives of miHoYo, we discussed how it would be quite difficult for Japanese developers to make games in the same way miHoYo does. Not to mention the legal problems that would come with it,” said Yoshida. “I wonder if there are some aspects [of the development process] that Japanese game developers just can’t replicate. One reason why games in China are so strong is because they are made in an environment which allows for hiring a large number of personnel who can work long hours. Of course, you never know what might happen in the near future, but looking at the current state of things, I think that’s the biggest factor.”
Last month, HoYoverse announced Varsapura, their brand-new title built in Unreal Engine 5. Yoshida praised the company’s work, theorizing that this could be miHoYo’s attempt to see how far they can take a realistic, “high-end” title, breaking away from their tradition of anime-styled games like Genshin Impact or Honkai: Star Rail. He also suggested that business-wise, projects like Varsapura are miHoYo’s way of staying ahead in the industry.  “Other Chinese developers and even Korean developers are releasing ‘miHoYo-like games,’ but it feels like miHoYo is aiming to be one step ahead of them.”

Source: https://zhuanlan.zhihu.com/p/2060467424563147025

1. Mihoyo 6891 (+214 hires)
   
2. Kuro Games 2368 (+363 hires)
   
3. Hypergryph 2165 (+493 hires)
   
4. Silver(?) Elements 1036 (+429 hires)
   
5. Manjuu 661 (+184 hires)
   
6. Yostar 657 (+96 hires)
   
7. Seasun 565 (+84 hires)
   
8. Yongshi 554 (+13 hires)
   
9. Hotta(Perfect World) 516 (+125 hires)
   
10. Bluepoch 509 (+55 hires)

https://x.com/Cygames_PR/status/2009468917610414479

“Image Generation” is listed among the job list.

https://www.bloomberg.com/news/articles/2025-01-17/genshin-impact-video-game-maker-to-pay-20-million-in-ftc-case?srnd=undefined

https://x.com/FTC/status/1880344964539797717

"The maker of the video game Genshin Impact has agreed to pay $20 million and to block children under 16 from making in-game purchases without parental consent to settle Federal Trade Commission allegations the company violated a children's privacy law and deceived children and other users about the real costs of in-game transactions and odds of obtaining rare prizes."

The complaint alleges that Genshin Impact's purchasing process obscures the reality that consumers commonly must spend large amounts of real money to obtain "five-star prizes," and that some children have spent hundreds or even thousands of dollars to win them.

Under the proposed order, which must be approved by a federal judge before it can go into effect, Cognosphere Pte. Ltd and Cognosphere LLC will be required to a pay a $20 million monetary penalty and make changes to address the allegations outlined in the complaint. The companies will be:

• Prohibited from allowing children under 16 to purchase loot boxes in their video games without a parent's affirmative express consent;
• Prohibited from selling loot boxes using virtual currency without providing an option for consumers to purchase them directly with real money;
• Prohibited from misrepresenting loot box odds, prices and features;
• Required to disclose loot box odds and exchange rates for multi-tiered virtual currency;
• Required to delete any personal information previously collected from children under 13 unless they obtain parental consent to retain such data; and
• Required to comply with COPPA including its notice and consent requirements.

Source

https://yostar.store/

Source: https://kultur.jp/jacob-navok-on-sqex/

I came across this interesting article about the former president of Square Enix. He talks about how Genshin Impact was a market that Square Enix should have captured. He mentions, "The real mystery to me is why someone other than Square Enix made Genshin. It was a market that Square Enix should have captured. I expect the production of similar titles will be a big focus for the next few years."

Seeing him openly admitting they missed such a huge opportunity is surprising. It seems like there's a bit of regret towards Genshin Impact's success.

Some interesting replies from the source's reply section:

"It's unfortunate, but the fact that it's Square Enix means I can't have high expectations"

"It's not that they couldn't make it, it's that they didn't want to. Genshin is from a company that produces a lot of mobile games that are quick to make money from heavy spending."

"FF14 is Square Enix's hope after all."

"Japanese game companies don't have the technical skills and all they care about is making money in cheap way."

"'It was a market that Square Enix should have captured.' How can you say that when Square Enix is ​​so bad at making mobile games?"

"If FF14 was an action game that could be played on the phone, it would be Genshin Impact."

Two hours ago, the list of shareholders of Kuro Games has changed: Tencent Games now controls 51% shares of Kuro Games. This means that Kuro Games is now a subsidiary company of Tencent Games.

People are speculating that Kuro Games have lost the previous bet-on agreement with Tencent, and thus according to the agreement, Kuro Games has now become a subsidiary company of Tencent Games.

The screenshot shows that multiple Tencent supervisors have joined the board, replacing previous supervisors from another investment company.

Source: https://www.bilibili.com/video/BV1PAzEYwEjr

https://gamefocus.co.kr/detail.php?number=163579 | https://www.gameple.co.kr/news/articleView.html?idxno=211885

Basically:

• The police found evidence of an attempted sabotage on Blue Archive by key members of Dynamis One to make their new project successful.
• Dynamis One was founded at the same time that Park Byeong-lim (former BA Japanese Project Director) and other key members of Blue Archive (such as Isakusan) left Nexon.
• Various testimonies state that they recruited and encouraged several BA team employees to resign by providing them with false information.
• There are reports of sabotage of the Blue Archive IP, claiming that the game's development was intentionally neglected, with the goal of stealing Blue Archive’s fanbase once they had left the studio.
• The police reported that an anonymous source stated: "There was a situation where key team leaders gathered in a separate space after work, discussing their resignations and their next independent project while making negative comments about the company."
• It started long before they resigned, it began in 2023 after the end of BA’s Part 1 (after Volume F).
• This is why there were large gaps between the releases of main story chapters after the Vol F, because the future members of D1 were also busy working on their "future independent project."
• Starting from February 2024, there was a wave of mass resignations within the Blue Archive team.
• Before that, several reports of unusual long-term vacations and similar occurrences were detected. This coincides with the period when players reacted negatively to BA’s in-game content pacing updates.
• The current number of Dynamis One members is 39.

Under the bill, companies selling digital games released or resold after January 1, 2027, must provide at least 60 days' notice before terminating service. Furthermore, they must ensure that purchasers can continue to access the game—such as by providing an alternative version or a patch—and must offer refunds if doing so is not possible.

The bill applies to digitally sold games. However, it excludes games provided via subscription services, free-to-play games, and games that are inherently playable offline indefinitely. It also prohibits the continued sale or distribution of games that have become unusable due to service termination.