Japanese law played a big part in the slow adoption of Japanese e-sports.
However, the Japanese e-sports industry is now organized enough to issue professional licenses which help avoid problems with the law.
Taking a quick look at the development of e-sports in North America helps identify where the opportunities may lie in Japan’s delayed e-sports development.
Why would anybody want to watch other people play video games?
Probably for the same reason we are fascinated with NBA star Kevin Durant’s one-foot jumper or four-time Super Bowl MVP quarterback Tom Brady’s ability to buy time in the pocket: Watching people at the top of their game doing seemingly magical things is entertaining.
In e-sports, instead of watching one-foot jumpers, spectators watch double kills in shooter games. This is not a myth. Popular video game titles like Activision’s Call of Duty and Riot Games’ League of Legends have long-time professional players with large followings. Newzoo estimates the global e-sports market to grow to $905.6 million in 2018, a 38% year-on-year growth.
Newzoo expects the global e-sports industry to reach $1.4 billion by 2021.
Recently, the Japan e-sports Union (Jesu) issued professional licenses to video game players in Japan. This made the news, not only in the video gaming scene, but also on English-language mainstream news sites like Bloomberg. Seth Fischer of Hong Kong based Oasis Capital is already betting on Japanese e-sports.
Today, I would like to go over the nuts and bolts of Japanese e-sports so you can stay informed on some of the opportunities presented by the up and coming industry.
A snapshot of North American e-sports
In North America, we have companies like Major League Gaming (MLG), subsidiary of Activision (NASDAQ: ATVI), organizing video game related events. At an MLG event, professional video game players go head-to-head in front of a big audience with hopes to win a trophy (and cash prize!). Big companies sponsor teams, players, and/or events. The structure resembles the professional sports leagues in North America like the NBA, NFL, NHL, and MLB.
One key difference between major professional sports and video games, however, is that fans get to watch professional players practice nearly every day in real time over the internet. Websites like Twitch.tv (Amazon subsidiary), Youtube (Google), and MLG.tv (Activision) give professional gamers a platform to broadcast practice sessions to their fans. For professional video game team OpTic Gaming, content creation is just as important as winning tournaments.
What’s with Japan’s lack of competitive e-sports events?
While gamers have made careers out of MLG events in North America, Japanese law has made it difficult to organize paid tournaments. A Nikkei article points to Keihin Hyoji Hou, or Act against Unjustifiable Premiums and Misleading Representations for the lack of paid tournaments. Because tournament performance is dependent on participants purchasing video game hard/software, prize money can be seen as a tool to lure consumers. Hence, companies can either limit prize money to the upper limit of 100,000 yen ($940 USD) for Keihin Hyoji Hou, or go further and risk getting in trouble with authorities.
One way to avoid this problems is to create a professional league. With a professional league, the average consumer is viewing the event rather than participating for a prize. Three key Japanese e-sports organizations merged together to form JeSU. The new organization started issuing professional licenses to individuals and teams in February 2018.
Put another way, it isn’t that the Japanese government relaxed regulations. Rather, the Japanese e-sports industry got together and decided to form a professional league to avoid regulation.
Now Japan has JeSU-approved professional gamers
Earlier, I briefly mentioned how the e-sports industry in North America is shaped. It goes without saying that we should take a look at Japanese video game developers with strong IPs. But taking it a step further, if Japan were to follow the footsteps of e-sports in the west, you probably ought to take a closer look at what sort of companies are involved in MLG’s operations, then see what sort of similar Japanese companies would show up in Japanese e-sports.
Take Amazon’s Twitch and Google’s Youtube for example. Both are well known livestream broadcasting platforms among Japanese video gamers too, however, it isn’t the only platform available.
Niconico and OPENREC are also broadcasting platforms commonly used by video gamers in Japan. Niconico is a grandchild company of Kadokawa Dwango (TSE: 9468). OPENREC is operated by CyberZ, a child company of CyberAgent (TSE: 4751).
For an investor looking for larger e-sports exposure through non-video game software developers, Kadokawa Dwango would probably be a better place to look. This is simply due to CyberAgent being a relatively large company with many different services outside of e-sports. It is probably worth noting that the Vice President of JeSU is Hirokazu Hamamura, CEO of Gz Brain, a video game focused multimedia company 100% owned by Kadokawa.
The more obvious plays
To get a quick idea of the more obvious plays in Japanese e-sports, let’s take a look at game titles that JeSU has officially recognized for pro e-sports:
SRNCAV Rank
Exchange
Ticker
Company
Price
Dividend Yield
Buyback Yield
SR Yield
SR NCAV Yield
P/NCAV
TwoLiner
Link
1
TSE
6257
Fujishoji Co Ltd
679
7.5
7.7
15.2
25.0%
0.61
2
TSE
6349
Komori Corp
682
6.0
7.0
13.0
20.5%
0.63
3
TSE
6930
Nippon Antenna Co Ltd
938
2.5
12.0
14.5
19.4%
0.75
Manufactures BS/CS satellite and UHF TV antennas and related equipment. Also does cable TV and satellite installation work.
4
TSE
2408
KG Intelligence Co Ltd
277
8.4
0.0
8.4
15.8%
0.53
5
TSE
7937
Tsutsumi Jewelry Co Ltd
1,902
1.6
6.5
8.1
14.2%
0.57
Imports precious stones, manufactures jewelry, and operates jewelry stores. Primarily in the Tokyo & surrounding area. Tsutsumi family has controlling interest.
6
TSE
5921
Kawagishi Bridge Works Co Ltd
2,260
5.6
0.0
5.6
13.3%
0.42
Mainly engaged in structural steel fabrication and secondarily engaged in precast concrete. Owns several factories spanning central to western mainland Japan.
7
TSE
2676
Takachiho Koheki Co Ltd
921
2.7
5.7
8.4
11.9%
0.71
8
TSE
1905
TENOX Corp
870
3.6
3.7
7.3
11.0%
0.66
Construction company primarily focused on foundation work using proprietary patented methods. Also offers civil engineering consulting services. Expanded into SE Asia.
9
TSE
3600
Fujix Ltd
1,500
4.2
0.0
4.2
9.4%
0.44
Japan's largest sewing thread manufacturer. Also involved in solar power generation. Strong influence of Fujii family (founders).
10
TSE
9932
Sugimoto & Co Ltd
1,858
4.4
5.2
9.6
9.3%
1.03
11
TSE
7908
Kimoto Co Ltd
156
3.3
2.5
5.7
9.1%
0.63
12
NGO
8071
Tokai Electronics Co Ltd
2,120
4.9
0.0
4.9
9.0%
0.54
13
TSE
4962
Goo Chemical Co Ltd
1,086
3.2
4.2
7.5
8.5%
0.88
14
TSE
7922
Sanko Sangyo Co Ltd
292
3.5
0.0
3.5
7.5%
0.46
General maker of printed material. Everything from labels and stickers to display and control panels. Particular strength in printed material with adhesives.
15
TSE
6346
Kikukawa Enterprise Inc
3,190
2.3
2.1
4.4
7.5%
0.58
16
SSE
1734
KITA KOUDENSHA Corp
3,580
3.4
0.0
3.4
7.2%
0.47
Hokkaido-based electrical construction company. Strength in electrical design for cold, snowy regions. Mitsubishi Electric (TSE: 6503) is major shareholder.
17
NGO
8145
Chubu Suisan Co Ltd
2,398
3.4
1.1
4.5
7.1%
0.64
Major seafood wholesaler with a particularly strong share in Nagoya market. Also produces fish feed and deals in frozen seafood.
18
TSE
6715
Nakayo Inc
1,456
4.4
0.0
4.4
6.9%
0.65
Manufactures and sells telecommunication equipment like business/IP phone systems, intercoms, wireless access points, etc.
19
TSE
9376
EURASIA TRAVEL Co Ltd
373
5.9
0.0
5.9
6.5%
0.90
20
NGO
5979
Kaneso Co Ltd
4,000
3.8
0.0
3.8
6.5%
0.58
Construction hardware maker. Products include stainless steel grating, floor hatches, roof drains, manhole covers, parking blocks, quake-proof expansion joints, etc. Kobayashi family owns controlling interest.
21
TSE
6156
A-One Seimitsu Inc
1,256
2.8
0.0
2.8
6.2%
0.45
Machine tool manufacturer specializing in lathe parts. Particular strength in spring collet chucks. Also makes cams for small automatic lathes, offers re-polishing for cutting tools, and makes custom cutting tools.
22
TSE
6337
TESEC Corp
835
4.7
0.0
4.7
6.2%
0.76
23
TSE
3529
Atsugi Co Ltd
609
4.9
0.0
4.9
6.1%
0.81
24
TSE
6943
NKK Switches Co Ltd
3,610
2.8
0.0
2.8
6.0%
0.46
Manufacturer specializing in industrial switches. Also accepts custom orders.
25
TSE
7949
Komatsu Wall Industry Co Ltd
1,760
4.7
0.0
4.7
5.5%
0.85
26
NGO
3952
Chuoh Pack Industry Co Ltd
1,140
3.5
0.0
3.5
5.5%
0.64
Toyota group cardboard box manufacturer. Mainly caters to automotive and electronics makers. Also has joint factories in China and Malaysia.
27
TSE
5304
SEC CARBON Ltd
6,270
4.0
0.0
4.0
5.4%
0.74
28
TSE
6929
Nippon Ceramic Co Ltd
2,194
3.3
5.5
8.8
5.3%
1.64
29
TSE
3766
SYSTEMS DESIGN Co Ltd
616
2.2
2.9
5.0
5.1%
0.99
30
TSE
1883
Maeda Road Construction Co Ltd
1,998
3.7
6.0
9.7
5.0%
1.92
31
TSE
8617
The Kosei Securities Co Ltd
515
2.7
0.0
2.7
5.0%
0.54
32
TSE
2341
Arbeit-Times Co Ltd
148
4.7
0.0
4.7
5.0%
0.93
Free paper issuer & website operator focused on part-time and temporary job recruitment information. Based in Shizuoka prefecture, but also distributes in Tokyo and Nagoya metro.
34
NGO
5461
Chubu Steel Plate Co Ltd
710
2.8
0.0
2.8
4.9%
0.57
Only specialized manufacturer of thick steel plates in Japan. Products are used for heavy industrial machinery (power shovels, fork lifts, etc), high rise buildings, etc. Also developed own specialized steel plates.
36
TSE
4627
Natoco Co Ltd
1,106
3.4
0.0
3.4
4.9%
0.70
37
NGO
6797
Nagoya Electric Works Co Ltd
828
2.8
0.0
2.8
4.9%
0.57
Offers information equipment, mobile signs, and lighting systems for roads. Also offers inspection equipment for printed circuit boards.
38
TSE
5984
Kanefusa Corp
619
4.8
0.0
4.8
4.9%
0.98
39
TSE
5541
Pacific Metals Co Ltd
1,490
3.7
0.0
3.7
4.8%
0.76
40
NGO
7950
Nihon Decoluxe Co Ltd
5,490
5.1
0.0
5.1
4.8%
1.05
41
TSE
2715
Elematec Corp
899
3.9
0.0
3.9
4.8%
0.81
42
TSE
1982
Hibiya Engineering Ltd
1,869
4.4
1.3
5.6
4.7%
1.19
43
TSE
6032
Interworks Inc
341
8.8
0.0
8.8
4.6%
1.89
Operates several job listing websites tailored to specific industries (like manufacturing, apparel, etc). Mainly collects listing fees from staffing agencies. Largest shareholder is Amuse Capital, asset management company of Hayao Nakayama, former CEO of Sega and former chariman of Pasona (TSE: 2168).
44
TSE
9622
Space Co Ltd
892
6.3
0.0
6.3
4.6%
1.36
45
TSE
2483
HONYAKU Center Inc
1,190
2.5
3.1
5.6
4.6%
1.23
Overall translation service. Mainly caters to patent, medical, industrial, and financial translation. M3 (TSE: 2413), which operates Japan's largest health care professional portal site, is major shareholder.
46
TSE
3376
ONLY Corp
595
5.9
0.0
5.9
4.5%
1.29
47
TSE
6459
Daiwa Industries Ltd
946
4.2
0.5
4.7
4.5%
1.04
48
TSE
6365
DMW Corp
2,635
2.9
1.6
4.5
4.5%
1.00
49
TSE
3632
GREE Inc
480
3.0
2.8
5.8
4.5%
1.29
50
TSE
8087
Furusato Industries Ltd
1,377
4.4
0.0
4.4
4.4%
0.98
51
TSE
7472
Toba Inc
2,747
4.4
0.0
4.4
4.4%
1.00
Trading company specializing in controls, factory automation, and industrial equipment & machinery. Generally proposes a package solution tailored to customers' production facility.
52
TSE
7739
Canon Electronics Inc
1,565
5.1
0.0
5.1
4.3%
1.19
53
TSE
6276
Navitas Co Ltd
354
2.8
0.0
2.8
4.3%
0.66
54
TSE
1793
Ohmoto Gumi Co Ltd
4,470
2.2
0.0
2.2
4.2%
0.53
Mid tier construction general contractor. Handles everything from commercial complexes, office buildings, and industrial facilities to roads, dams, and railroads.
55
TSE
6763
Teikoku Tsushin Kogyo Co Ltd
1,200
4.2
0.0
4.2
4.2%
0.99
56
TSE
6964
Sanko Co Ltd
454
2.2
0.0
2.2
4.1%
0.53
Manufactures and sells pressed products, metal moldings, mechatronic components, and plastic products to automotive and electronics manufacturers. Osaki Electric (TSE: 6644) and Denso (TSE: 6902) are major customers. Tamura family owns controlling stake.
57
TSE
6592
Mabuchi Motor Co Ltd
3,360
4.4
1.8
6.2
4.1%
1.51
58
TSE
5951
Dainichi Co Ltd
686
3.2
0.0
3.2
4.0%
0.80
59
TSE
7865
People Co Ltd
800
7.8
0.0
7.8
3.9%
2.00
60
TSE
7608
Sk Japan Co Ltd
285
2.8
0.0
2.8
3.6%
0.78
Plans, produces, and sells prize goods (mostly cartoon character figures) for arcades/amusement facilities. Also creates original products and wholesales snacks.
61
TSE
7628
Ohashi Technica Inc
1,510
3.4
0.0
3.4
3.5%
0.96
Independent automotive supplier with a mixture of internal manufacturing and partnered manufacturers. Sales force involved in development of products with customers. Also makes hinges for cell phones and game consoles.
62
TSE
7235
Tokyo Radiator Mfg Co Ltd
548
2.4
0.0
2.4
3.5%
0.68
63
TSE
5900
Daiken Co Ltd
713
2.1
0.0
2.1
3.4%
0.61
Mid-tier building material maker. Mainly metal products like external trims, hardware, metal fittings, etc. Strong Fujioka family influence, but no controlling stake.
64
TSE
2773
Mutual Corp
817
3.0
0.0
3.0
3.4%
0.88
65
TSE
9986
Zaoh Co Ltd
1,415
4.5
0.0
4.5
3.4%
1.33
66
TSE
6265
Myotoku Ltd
1,490
3.3
0.0
3.3
3.4%
0.99
67
NGO
7488
Yagami Inc
1,651
4.3
0.0
4.3
3.4%
1.28
68
TSE
7045
Tsukui Staff Corp
1,234
3.5
0.0
3.5
3.3%
1.05
69
TSE
4365
Matsumoto Yushi-Seiyaku Co Ltd
10,530
2.8
0.0
2.9
3.3%
0.87
70
TSE
9476
Chuokeizai-Sha Holdings Inc
448
2.2
0.0
2.2
3.3%
0.68
Publisher of business books, including textbooks, academic journals, and licensure exam study aids. Particular strength in management, accounting, and taxation.
71
TSE
6485
Maezawa Kyuso Industries Co Ltd
2,021
1.9
1.7
3.5
3.3%
1.08
72
TSE
6678
Techno Medica Co Ltd
1,780
2.7
1.3
4.0
3.2%
1.25
73
TSE
9934
Inaba Denkisangyo Co Ltd
2,413
3.5
1.3
4.8
3.2%
1.52
74
TSE
6912
Kikusui Electronics Corp
729
3.0
1.2
4.2
3.2%
1.32
75
TSE
7899
Mics Chemical Co Ltd
312
3.2
0.0
3.2
3.1%
1.02
76
TSE
5388
Kunimine Industries Co Ltd
928
4.5
0.0
4.5
3.1%
1.46
77
TSE
5186
Nitta Corp
2,211
3.2
1.5
4.7
3.1%
1.53
78
TSE
6540
SEMBA Corp
984
3.9
0.0
3.9
3.1%
1.29
Services include planning, design, construction, and supervision of commercial spaces as well as market research and business consulting.
79
TSE
6905
Cosel Co Ltd
921
3.7
1.4
5.2
3.0%
1.70
80
TSE
4464
SOFT99 Corp
837
2.9
0.0
2.9
3.0%
0.97
81
TSE
6091
Wesco Holdings Inc
453
2.9
0.0
2.9
3.0%
0.97
82
TSE
5945
Tenryu Saw Mfg Co Ltd
2,670
2.6
0.7
3.3
2.9%
1.11
83
TSE
6309
Tomoe Engineering Co Ltd
1,845
2.6
0.0
2.6
2.9%
0.89
84
TSE
9651
Japan Process Development Co Ltd
751
3.0
1.8
4.7
2.9%
1.62
Developer of control and embedded software. Core business includes driver support, automotive control, railroad maintenance support, IC card, thermal power plant control and monitoring systems.
85
TSE
7928
Asahi Kagaku Kogyo Co Ltd
358
1.9
0.0
1.9
2.9%
0.67
86
FSE
1771
Nippon Kanryu Industry Co Ltd
530
1.9
0.0
1.9
2.9%
0.66
87
TSE
7885
Takano Co Ltd
676
2.1
0.0
2.1
2.8%
0.73
88
TSE
6834
SEIKOH GIKEN Co Ltd
1,972
1.6
2.4
3.9
2.8%
1.38
89
TSE
5918
Takigami Steel Construction Co Ltd
4,700
2.3
0.0
2.3
2.8%
0.83
90
TSE
7501
Tiemco Ltd
711
1.7
0.0
1.7
2.8%
0.60
Retailer of fly fishing equipment and high end outdoor clothing. Imports/exports fishing equipment and outdoor gear, but also has private label brand. Strong influence of Sakai family (founders).
91
TSE
5819
Canare Electric Co Ltd
1,670
2.9
0.0
2.9
2.8%
1.04
Develops, manufactures, and provides audio and video cables, connectors, patchbays, and fiber-optic products for the television broadcast industry and the professional A/V market.
92
TSE
5988
Piolax Inc
1,523
3.4
0.0
3.4
2.8%
1.23
93
TSE
5444
Yamato Kogyo Co Ltd
2,186
4.1
0.0
4.1
2.7%
1.50
94
TSE
4124
Osaka Yuka Industry Ltd
1,303
2.8
1.5
4.4
2.7%
1.61
95
TSE
2325
NJS Co Ltd
1,693
3.0
0.0
3.0
2.7%
1.12
Water system, sewage, and environmental consulting company. Part of Nippon Hume (TSE: 5262).
96
TSE
8595
JAFCO Co Ltd
3,595
3.1
0.0
3.1
2.7%
1.17
97
TSE
7703
Kawasumi Laboratories Inc
850
1.8
0.0
1.8
2.6%
0.69
Major medical equipment manufacturer making products for hemodialysis, plasmapheresis, blood banking/transfusion, infusion therapy, and endovascular repair.
98
TSE
2795
Nippon Primex Inc
762
2.6
0.0
2.6
2.6%
1.01
Develops, manufactures, and sells small commercial printers. Applications include POS receipt printer, taxi receipt printers, ATM machines, etc. Founding Nakagawa familly owns controling interest.
99
TSE
4621
Rock Paint Co Ltd
782
2.2
0.0
2.2
2.6%
0.87
100
TSE
7961
Kanematsu Sustech Corp
1,477
3.4
0.0
3.4
2.5%
1.35
101
TSE
2806
Yutaka Foods Corp
1,702
2.3
0.0
2.3
2.5%
0.94
102
TSE
1768
Sonec Corp
763
2.6
0.0
2.6
2.5%
1.06
Mid-tier construction general contractor based out of Hyogo (western Japan, Kinki region). Almost all employees have a technical specialization.
103
TSE
6247
Hisaka Works Ltd
762
2.8
0.0
2.8
2.5%
1.13
104
TSE
1879
Shinnihon Corp
842
2.1
0.0
2.1
2.5%
0.87
105
TSE
7999
MUTOH HOLDINGS Co Ltd
1,552
2.2
0.0
2.3
2.4%
0.92
106
TSE
5357
Yotai Refractories Co Ltd
725
1.9
0.0
1.9
2.4%
0.81
107
TSE
6718
Aiphone Co Ltd
1,555
2.0
0.0
2.0
2.4%
0.86
108
TSE
1914
Japan Foundation Engineering Co Ltd
412
2.1
1.5
3.6
2.4%
1.51
109
TSE
3841
Jedat Inc
1,086
1.8
0.0
1.8
2.4%
0.78
110
TSE
9755
OYO Corp
1,445
2.0
0.0
2.0
2.4%
0.83
Largest geological surveying and consulting firm in Japan. Also makes and sells equipment for geological survey, seismic observation, geophysical prospecting, and oil exploration.
111
NGO
6295
Fuji Hensokuki Co Ltd
308
1.9
0.0
1.9
2.3%
0.83
112
TSE
6312
Freund Corp
635
3.1
0.0
3.1
2.3%
1.34
113
TSE
3316
Tokyo Nissan Computer System Co Ltd
530
3.6
0.0
3.6
2.3%
1.54
114
TSE
9872
Kitakei Co Ltd
910
2.5
0.0
2.5
2.3%
1.10
115
TSE
6248
Yokota Manufacturing Co Ltd
1,030
2.9
0.0
2.9
2.3%
1.27
Small batch, custom manufacturing of high end industrial water pumps and valves.
117
TSE
7313
TS Tech Co Ltd
2,899
2.9
0.0
2.9
2.2%
1.31
118
TSE
6482
Yushin Precision Equipment Co Ltd
713
2.4
1.3
3.7
2.2%
1.65
119
TSE
2481
Townnews-Sha Co Ltd
375
3.2
0.0
3.2
2.2%
1.43
Free paper (i.e., Townnews) issuer in the Kanagawa and western Tokyo areas. Advertising is main revenue source. Also operates online version of Townnews.
121
TSE
3183
WIN-Partners Co Ltd
941
3.4
0.0
3.4
2.2%
1.55
122
TSE
4644
Imagineer Co Ltd
986
2.8
0.0
2.8
2.2%
1.28
124
TSE
8227
Shimamura Co Ltd
7,060
2.8
0.0
2.8
2.1%
1.36
125
TSE
4752
Showa System Engineering Corp
757
3.2
0.0
3.2
2.0%
1.56
126
TSE
4333
Toho System Science Co Ltd
939
3.7
0.2
4.0
2.0%
1.95
Mainly software development for insurance, securities brokerage, and banks. Most sales come through partnered system integrators.
127
TSE
7902
Sonocom Co Ltd
748
1.3
0.0
1.3
2.0%
0.66
128
TSE
6432
Takeuchi Mfg Co Ltd
1,780
2.5
0.0
2.6
2.0%
1.27
129
TSE
2461
Fan Communications Inc
437
4.0
0.0
4.0
2.0%
1.99
130
TSE
7970
Shin-Etsu Polymer Co Ltd
870
1.8
0.6
2.5
2.0%
1.24
131
TSE
1799
Daiichi Kensetsu Corp
1,792
1.7
0.3
2.0
2.0%
0.99
132
TSE
6820
Icom Inc
2,991
1.7
0.4
2.1
1.9%
1.09
133
TSE
9384
Naigai Trans Line Ltd
980
3.6
0.0
3.6
1.9%
1.84
134
TSE
4517
Biofermin Pharmaceutical Co Ltd
2,253
2.7
0.0
2.7
1.9%
1.39
136
TSE
3426
ATOM LIVIN TECH Co Ltd
1,376
2.4
0.0
2.4
1.9%
1.24
Designs, manufactures, and sells residential interior hardware under the "Atom" brand. Most manufacturing is outsourced. Customers include furniture makers, hardware stores, homebuilders, and household appliance makers.
137
TSE
1717
Meiho Facility Works Ltd
555
3.7
0.0
3.7
1.9%
1.97
Offers construction management services on behalf of corporate customers. Mainly when moving/renovating/building offices or buildings.
138
NGO
4247
Poval Kogyo Co Ltd
1,720
2.3
0.0
2.3
1.9%
1.23
139
TSE
4624
Isamu Paint Co Ltd
2,983
1.7
0.0
1.7
1.8%
0.92
140
TSE
7989
Tachikawa Corp
1,278
2.2
0.0
2.2
1.8%
1.22
141
TSE
4534
Mochida Pharmaceutical Co Ltd
3,995
2.2
1.3
3.4
1.8%
1.94
142
TSE
9854
Aigan Co Ltd
231
1.3
0.0
1.3
1.8%
0.72
143
TSE
9644
Tanabe Consulting Co Ltd
1,281
3.3
0.0
3.3
1.7%
1.95
145
TSE
7614
OM2 Network Co Ltd
1,321
1.8
0.0
1.8
1.6%
1.16
Operates 120+ meat shops, 20+ delis, and 50+ restaurants. Parent company is S Foods (TSE: 2292), a large meat wholesaler.
147
TSE
7849
Starts Publishing Corp
2,075
1.7
0.0
1.7
1.5%
1.11
148
TSE
4551
Torii Pharmaceutical Co Ltd
3,020
1.6
0.0
1.6
1.5%
1.04
149
TSE
4299
HIMACS Ltd
1,968
2.5
0.0
2.5
1.5%
1.68
Information system design, development, and maintenance, primarily for financial industry. Increasing focus on retail industry as well.
150
TSE
6271
Nissei Corp
1,120
2.1
0.0
2.1
1.4%
1.49
151
TSE
1381
AXYZ Co Ltd
2,714
2.8
0.0
2.8
1.4%
1.93
Mainly engaged in chicken farming, processing, and sales. Also operates about 30 KFC restaurants (Yamaguchi, Hyogo, Okayama) and 7 Pizza Huts (Tokyo, Hyogo, Okayama). Nippon Ham (TSE: 2282), the largest meat producer/processor, is a major shareholder.
152
TSE
4659
AJIS Co Ltd
2,427
2.7
0.0
2.7
1.4%
1.91
153
TSE
1897
Kaneshita Construction Co Ltd
4,130
1.5
0.0
1.5
1.4%
1.12
154
TSE
2332
Quest Co Ltd
1,225
2.7
0.0
2.7
1.4%
1.95
155
TSE
9632
Subaru Enterprise Co Ltd
8,210
2.3
0.0
2.3
1.4%
1.73
156
TSE
2706
BROCCOLI Co Ltd
1,238
2.1
0.0
2.1
1.3%
1.56
157
TSE
9742
INES Corp
1,334
2.2
0.0
2.2
1.3%
1.72
158
NGO
9471
Bunkeido Co Ltd
1,650
2.1
0.0
2.1
1.3%
1.59
159
TSE
4362
Nippon Fine Chemical Co Ltd
1,381
2.4
0.0
2.4
1.3%
1.88
160
TSE
6278
Union Tools Co
2,587
2.3
0.0
2.3
1.3%
1.80
162
TSE
3953
Ohmura Shigyo Co Ltd
709
1.4
0.0
1.4
1.2%
1.16
163
TSE
5484
Tohoku Steel Co Ltd
1,400
1.9
0.0
1.9
1.2%
1.54
164
TSE
7544
Three F Co Ltd
306
0.9
0.0
0.9
1.2%
0.79
165
TSE
4769
Information Creative Co Ltd
758
2.2
0.0
2.2
1.2%
1.86
Overall information system solutions provider. Everything from system design and development to operation. Hitachi (TSE: 6501) group is main customer.
166
TSE
4761
SAKURA KCS Corp
907
1.3
0.0
1.3
1.2%
1.14
167
TSE
2792
Honeys Holdings Co Ltd
1,027
1.9
0.0
2.0
1.1%
1.72
168
TSE
3892
Okayama Paper Industries Co Ltd
1,009
1.2
0.0
1.2
1.1%
1.04
169
TSE
6662
Ubiteq Inc
244
1.2
0.0
1.2
1.0%
1.20
171
TSE
3710
Jorudan Co Ltd
956
1.4
0.0
1.4
1.0%
1.33
Develops and sells train route and fare calculation software. Sells to individuals and institutions.
172
TSE
6535
i-mobile Co Ltd
731
0.0
1.4
1.4
1.0%
1.39
Primarily an internet ad platform operator. Secondarily operates growing local government tax/donation website.
176
TSE
4301
Amuse Inc
2,304
1.4
0.0
1.4
0.8%
1.69
180
TSE
3682
Encourage Technologies Co Ltd
838
1.5
0.0
1.5
0.8%
1.98
Primarily develops and sells packaged security and internal control software for information systems to corporate clients. Also offers customization and maintenance services.
181
TSE
3386
Cosmo Bio Co Ltd
1,112
1.2
0.0
1.2
0.8%
1.62
182
TSE
6769
THine Electronics Inc
902
1.0
0.0
1.0
0.7%
1.37
183
TSE
6730
Axell Corp
743
0.7
0.0
0.7
0.7%
0.97
Fabless maker of LSI chips, mainly geared for pachinko/pachislot machines. Core product is graphics LSI. Also offers similar products for medical devices and construction machinery.
184
TSE
6405
Suzumo Machinery Co Ltd
1,616
0.9
0.0
0.9
0.7%
1.36
186
TSE
7749
Medikit Co Ltd
3,545
1.3
0.0
1.3
0.6%
2.00
187
TSE
9734
Kabushiki Kaisha Seiyoken
810
1.0
0.0
1.0
0.6%
1.61
188
TSE
2489
Adways Inc
353
0.9
0.0
0.9
0.6%
1.52
193
TSE
8105
Marusho Hotta Co Ltd
71
0.5
0.0
0.5
0.5%
0.99
194
TSE
4640
Andor Co Ltd
448
0.7
0.0
0.7
0.5%
1.44
Mainly develops and sells mechanical and electronic CAD software. Also engaged in software development, operations, and maintenance. Parent company is TCS Holdings (private), a software developer and system integrator. Shares held through TCS Holdings and wholly owned subsidiary Tokyo Computer Services.
195
TSE
3986
bBreak Systems Co Ltd
1,540
0.8
0.0
0.8
0.4%
1.97
197
TSE
7050
Frontier International Inc
1,472
0.4
0.0
0.4
0.2%
1.63
198
TSE
4813
Access Co Ltd
949
0.3
0.0
0.3
0.2%
1.81
199
TSE
7806
MTG Co Ltd
758
0.2
0.0
0.2
0.1%
1.68
200
TSE
6335
Tokyo Kikai Seisakusho Ltd
283
0.0
0.0
0.0
0.0%
0.70
201
TSE
6898
Tomita Electric Co Ltd
883
0.0
0.0
0.0
0.0%
0.53
Specialized manufacturer of soft ferrites, a magnetic electronic component commonly used in inductors, transformers, and microwaves. Nearly half of revenues generated overseas.
202
TSE
3770
Zappallas Inc
392
0.0
0.0
0.0
0.0%
0.99
203
TSE
3639
Voltage Inc
449
0.0
0.0
0.0
0.0%
1.49
204
TSE
7671
AmidA Holdings Co Ltd
990
0.0
0.0
0.0
0.0%
1.78
205
TSE
7448
Jeans Mate Corp
219
0.0
0.0
0.0
0.0%
1.47
206
TSE
3787
Techno Mathematical Co Ltd
799
0.0
0.0
0.0
0.0%
1.17
209
TSE
6048
DesignOne Japan Inc
265
0.0
0.0
0.0
0.0%
1.56
210
TSE
6839
Funai Electric Co Ltd
489
0.0
0.0
0.0
0.0%
0.43
Mid tier household electronics manufacturer with strong presence in North America. Manufactures LCD TVs, DVD players, printers, ink cartriges, etc. History of business with Walmart (NYSE: WMT). Strong influence of Funai family (founders).
A couple big titles not included in JeSU’s list are Nintendo’s (TSE: 7974) Super Smash Bros and Cygames’ Shadowverse. CyberAgent has a majority stake in Cygames while DeNA (TSE: 2432) is part owner.Source: JeSU (Japanese)
The bottom line
Japan is now ready to make up for lost time in e-sports. This may trigger investors to start taking a closer look at Japanese video game companies, an already popular industry. Personally, I think investors are better served looking at companies less known for video game development that also benefit from the e-sports movement. Though recent performance has lagged, Kadokawa Dwango is a good example with core segments revolving around video game multimedia.
