Japan stands as one of the largest mobile game markets globally, characterized by a highly engaged user base that is eager to spend on applications and in-app content. In recent years, an increasing number of games have turned to advertising as an additional revenue source, signaling a change in developers’ monetization strategies. In contrast to China, which is largely inaccessible to outside companies and where app distribution requires the support of local intermediaries, Japan presents itself as a far more open market imposing fewer regulatory barriers and offering easier access to leading app stores. Nevertheless, despite these facts, monetizing mobile games through advertisements in Japan is still a complex endeavor. This article aims to discuss the most vital issues related to this topic.
Japanese revenue models for mobile apps
Compared to other markets, Japan’s mobile games are downloaded less frequently, but the players’ high engagement and spending levels more than compensate. In short, fewer downloads, but higher spending, make Japan one of the strongest in-app purchase markets globally. The strong role of IAP reflects a key user trend: Japanese consumers demonstrate a strong willingness to make in-app purchases. To illustrate this, let’s examine the numbers in the context of mobile games. Japanese players spent $11 billion on mobile in-app purchases between August 2024 and July 2025. This means that within Asia, Japan ranks as the second-largest IAP market by total spending, placing just behind China, which spent $11.5 billion (source: Sensor Tower). However, for several years now, many developers have been trusting hybrid monetization, which also includes subscriptions and in-app advertising.
Japanese ads trends in mobile games
A big shift in Japan is that SIM and RPG games are now using ads for monetization. These genres, previously focused solely on in-app purchases, are now incorporating popular ad formats in Japan, like Rewarded Videos, Interstitials, and even Banner ads. Actually, when it comes to ad formats, Rewarded Video ads are especially effective in Japan because their opt-in, value-exchange nature aligns with local habits, like Poikatsu (a strategy of point hunting) and the gacha-driven culture. Interstitials and Banner ads also perform strongly, while Native ads gain popularity.
Additionally, programmatic advertising is gaining more and more traction in Japan. A Market Research Future (MRFR) study indicates that programmatic ad spending in Japan increased by 20% over the past year, with advertiser-focused companies such as CyberAgent and Dentsu driving this shift by turning to programmatic solutions.
Market share of mobile operating systems in Japan
A widely cited fact in mobile app monetization studies is that iOS users tend to spend more on in-app purchases, while Android apps are more often monetized through ads. In Japan, iOS dominates the mobile operating system market, accounting for roughly 57% of users, compared to around 43% for Android (StatCounter, August 2025). This makes Japan a particularly lucrative market for iOS-focused monetization strategies, including in-app purchases. At the same time, Android still represents a significant portion of the audience, providing publishers with opportunities to generate revenue through ad-based models. According to 42matters, 70% of Japanese mobile games on Google Play have integrated the Google AdMob SDK; however, publishers can also leverage domestic options such as LINE’s SDK, which is tied to Japan’s most popular social platform.
Gacha Japan – overview
One of the most essential terms in the Japanese mobile gaming world is “gacha”. It describes a system where players spend money or in-game currency to receive random rewards. It’s similar to how toy capsule vending machines work, which is where the name for this mechanic comes from. What’s vital is that this system isn’t only utilized in the in-app purchases model, but also in the case of in-app advertising, specifically within Rewarded ads. In most markets, Rewarded ads offer players simple bonuses, such as extra lives, faster progress, or premium currency. However, in Japan and some other Asian markets, these ads can also offer gacha pulls, making the mechanic even more deeply integrated into gameplay and monetization.
For developers operating outside of Japan, both the gacha concept and the related Japanese regulations can be challenging to navigate. For instance, due to justified concerns about potential gambling-like behavior, the “kompu gacha” mechanic was banned in 2012. Since then, developers must design monetization systems within clear legal boundaries, avoiding mechanics that could be considered exploitative or gambling-like.
Japanese data privacy laws
For mobile app publishers aiming to enter the Japanese market, it’s crucial to understand local data privacy regulations, particularly the Amended Act on the Protection of Personal Information (APPI). Effective since April 1, 2022, the APPI governs the handling of personal information and “personal-referable information”. While the APPI does not explicitly mandate cookie consent, it requires businesses to disclose their data collection practices and obtain user consent when collecting personal information through cookies, particularly for purposes such as behavioral tracking, marketing, or analytics. To comply with data privacy laws, mobile app publishers can partner with companies like Securiti, which provide tools and services to manage user consent, protect personal information, and ensure compliance with APPI regulations.
Accessible ad revenue opportunities
In recent years, Japanese mobile games have shifted toward hybrid monetization, blending the most popular in-app purchases with advertising, subscriptions, and other revenue streams. For foreign developers, this region offers a unique combination of high user spending, cultural engagement, and market openness. Additionally, compared to other Asian markets, especially China, a foreign developer in Japan has a relatively low barrier to entry.
