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
8595
Jafco Group Co Ltd
1,605
4.2
48.8
52.9
74.8%
0.71
2
NGO
8145
Chubu Suisan Co Ltd
2,360
3.8
5.4
9.2
17.1%
0.54
Major seafood wholesaler with a particularly strong share in Nagoya market. Also produces fish feed and deals in frozen seafood.
3
TSE
5541
Pacific Metals Co Ltd
1,272
12.1
0.0
12.1
16.8%
0.72
4
TSE
4365
Matsumoto Yushi-Seiyaku Co Ltd
14,290
2.7
11.6
14.3
16.6%
0.86
5
TSE
7928
Asahi Kagaku Kogyo Co Ltd
574
6.3
4.0
10.2
14.2%
0.72
6
TSE
6257
Fujishoji Co Ltd
1,295
4.1
8.7
12.9
12.2%
1.05
7
TSE
7077
Alink Internet Inc
1,115
0.0
16.9
16.9
12.1%
1.40
8
TSE
5900
Daiken Co Ltd
850
1.9
4.7
6.5
10.0%
0.65
Mid-tier building material maker. Mainly metal products like external trims, hardware, metal fittings, etc. Strong Fujioka family influence, but no controlling stake.
9
TSE
7908
Kimoto Co Ltd
185
3.8
2.9
6.7
9.9%
0.68
10
TSE
1793
Ohmoto Gumi Co Ltd
2,315
2.5
3.6
6.1
8.3%
0.74
Mid tier construction general contractor. Handles everything from commercial complexes, office buildings, and industrial facilities to roads, dams, and railroads.
11
TSE
6964
Sanko Co Ltd
518
2.6
1.6
4.1
8.0%
0.51
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.
13
TSE
2122
Interspace Co Ltd
943
2.3
8.8
11.1
7.6%
1.45
Operates an online affiliate marketing platform. Revenues primarily generated by system installation and monthly usage fees collected from advertisers.
14
TSE
2461
Fan Communications Inc
398
5.1
7.4
12.5
6.9%
1.82
15
TSE
6986
Futaba Corp
526
4.0
0.0
4.0
6.8%
0.59
16
TSE
7472
Toba Inc
3,200
3.9
3.0
6.9
6.8%
1.02
Trading company specializing in control machinery and FA equipment and tools, with Japanese and Asian manufacturers as key clients. Sales to semiconductor and LCD-related clients account for ~40% of total sales.
17
TSE
3600
Fujix Ltd
1,586
3.2
0.0
3.2
6.6%
0.48
Japan's largest sewing thread manufacturer. Also involved in solar power generation. Strong influence of Fujii family (founders).
18
TSE
3665
Enigmo Inc
334
3.1
7.6
10.7
6.4%
1.67
19
TSE
7628
Ohashi Technica Inc
1,648
3.6
1.8
5.4
6.4%
0.85
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.
20
NGO
5979
Kaneso Co Ltd
4,115
3.7
0.0
3.7
6.2%
0.59
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
1799
Daiichi Kensetsu Corp
1,684
2.8
3.2
5.9
6.1%
0.97
22
TSE
1905
TENOX Corp
1,096
2.6
2.4
4.9
6.1%
0.81
Construction company primarily focused on foundation work using proprietary patented methods. Also offers civil engineering consulting services. Expanded into SE Asia.
23
TSE
6382
Trinity Industrial Corp
889
3.9
2.0
5.8
6.1%
0.96
24
TSE
6346
Kikukawa Enterprise Inc
4,235
2.6
1.5
4.1
6.0%
0.68
Japan's largest lumber and woodworking machinery manufacturer. Mainly serves building material makers. Also manufactures polarizing film edge shapers for LCDs, printed circuit board cutting and finishing machines, and metal processing machines.
25
TSE
7902
Sonocom Co Ltd
834
1.5
2.2
3.6
5.9%
0.62
26
TSE
5388
Kunimine Industries Co Ltd
1,014
3.1
3.0
6.0
5.9%
1.03
27
TSE
7050
Frontier International Inc
1,750
5.2
2.2
7.4
5.7%
1.29
28
TSE
6943
NKK Switches Co Ltd
5,020
3.0
0.0
3.0
5.7%
0.53
Manufacturer specializing in industrial switches. Also accepts custom orders.
29
NGO
3952
Chuoh Pack Industry Co Ltd
1,351
4.1
0.0
4.1
5.5%
0.74
Toyota group cardboard box manufacturer. Mainly caters to automotive and electronics makers. Also has joint factories in China and Malaysia.
30
TSE
6049
ItoKuro Inc
337
0.0
4.4
4.4
5.5%
0.80
31
TSE
3825
Remixpoint Inc
197
0.0
8.3
8.3
5.3%
1.55
32
TSE
6715
Nakayo Inc
1,255
3.2
0.0
3.2
5.3%
0.60
Manufactures and sells telecommunication equipment like business/IP phone systems, intercoms, wireless access points, etc.
33
TSE
9698
Creo Co Ltd
928
4.5
3.2
7.7
5.2%
1.48
34
TSE
3770
Zappallas Inc
437
0.7
4.9
5.6
5.2%
1.09
35
TSE
7347
Mercuria Holdings Co Ltd
792
2.7
2.4
5.1
5.1%
1.00
36
TSE
1982
Hibiya Engineering Ltd
2,302
3.7
3.1
6.8
5.1%
1.35
37
TSE
5921
Kawagishi Bridge Works Co Ltd
3,130
2.5
0.0
2.5
5.1%
0.50
Mainly engaged in structural steel fabrication and secondarily engaged in precast concrete. Owns several factories spanning central to western mainland Japan.
38
TSE
7718
Star Micronics Co Ltd
1,884
3.2
2.8
6.0
5.0%
1.19
39
TSE
6834
SEIKOH GIKEN Co Ltd
1,352
3.7
0.0
3.7
5.0%
0.74
40
TSE
5945
Tenryu Saw Mfg Co Ltd
1,600
4.4
0.0
4.4
4.5%
0.97
41
TSE
1853
Mori-Gumi Co Ltd
325
4.3
0.0
4.3
4.3%
0.99
General construction company - roads, tunnels, railroad, apartment buildings, commercial complex, renovations, etc. Partnered with Asahi Kasei Homes. Part of Haseko (TSE: 1808) group.
42
TSE
3559
p-ban.com Corp
433
1.9
6.4
8.3
4.3%
1.94
Printed circuit board manufacturer with own online sales channel. Customer uploads PCB design to website and automatically receives quote. Manufacturing done by partnered companies. Founder owns significant non-controlling stake.
43
TSE
4627
Natoco Co Ltd
1,529
3.6
0.0
3.6
4.2%
0.85
44
TSE
9885
Charle Co Ltd
386
2.1
0.0
2.1
4.2%
0.49
Sells women's clothing (mainly undergarments), cosmetics, and health supplements through a multi-level marketing scheme and online store. Strong influence of Hayashi family (founders).
45
TSE
7313
TS Tech Co Ltd
1,685
3.9
2.2
6.0
4.1%
1.45
46
TSE
3662
Ateam Inc
594
2.8
4.9
7.6
4.1%
1.87
47
TSE
4534
Mochida Pharmaceutical Co Ltd
3,355
2.8
2.9
5.8
4.0%
1.43
48
TSE
5079
Novac Co Ltd
3,565
4.5
0.0
4.5
3.8%
1.18
49
TSE
2341
Arbeit-Times Co Ltd
147
2.3
2.8
5.0
3.8%
1.33
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.
50
TSE
3386
Cosmo Bio Co Ltd
974
4.1
0.0
4.1
3.8%
1.08
52
TSE
5951
Dainichi Co Ltd
735
3.0
0.0
3.0
3.7%
0.81
53
TSE
6365
DMW Corp
3,590
3.3
0.0
3.3
3.5%
0.95
54
TSE
2408
KG Intelligence Co Ltd
424
2.4
0.0
2.4
3.5%
0.67
55
TSE
4644
Imagineer Co Ltd
981
3.3
0.0
3.3
3.4%
0.98
56
TSE
4694
BML Inc
2,870
4.4
0.9
5.3
3.4%
1.56
57
TSE
6156
A-One Seimitsu Inc
1,992
5.0
0.0
5.0
3.4%
1.47
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.
58
TSE
9622
Space Co Ltd
920
3.9
0.6
4.5
3.4%
1.33
59
NGO
7488
Yagami Inc
2,572
4.8
0.0
4.8
3.3%
1.44
60
TSE
6091
Wesco Holdings Inc
506
3.2
0.0
3.2
3.2%
0.98
61
TSE
6265
Convum Ltd
1,745
2.9
0.0
2.9
3.2%
0.90
62
TSE
3668
COLOPL Inc
582
3.4
0.0
3.4
3.2%
1.08
63
TSE
2795
Nippon Primex Inc
759
2.6
0.0
2.6
3.1%
0.83
Develops, manufactures, and sells small commercial printers. Applications include POS receipt printer, taxi receipt printers, ATM machines, etc. Founding Nakagawa familly owns controling interest.
64
TSE
4238
Miraial Co Ltd
1,381
3.6
0.0
3.6
3.1%
1.18
65
TSE
2449
PRAP Japan Inc
1,021
3.6
0.0
3.6
3.1%
1.17
Public relations company offering consulting, media training, PR events, PR material creation, etc services.
66
TSE
6485
Maezawa Kyuso Industries Co Ltd
1,288
2.8
0.7
3.5
3.0%
1.16
Water supply and housing equipment manufacturer with 40% share of the Japanese water supply equipment market. Major customers include plumbing contractors and home builders.
67
TSE
6540
SEMBA Corp
886
2.8
0.0
2.8
3.0%
0.93
Services include planning, design, construction, and supervision of commercial spaces as well as market research and business consulting.
68
TSE
5819
Canare Electric Co Ltd
1,435
2.2
0.0
2.2
3.0%
0.74
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.
69
NGO
7950
Nihon Decoluxe Co Ltd
8,300
3.1
0.0
3.2
3.0%
1.05
70
TSE
6379
Raiznext Corp
1,442
4.0
0.1
4.2
2.9%
1.42
71
TSE
7544
Three F Co Ltd
356
2.7
0.0
2.7
2.9%
0.94
72
NGO
1777
Kawasaki Setsubi Kogyo Co Ltd
535
3.0
0.0
3.0
2.9%
1.03
73
TSE
3682
Encourage Technologies Co Ltd
504
3.6
0.0
3.6
2.8%
1.27
Software package vendor specializing in system audit trail for internal control systems and related maintenance services. Clients include leading IT vendors, banks, insurers, manufacturers, and asset managers.
74
TSE
3426
ATOM LIVIN TECH Co Ltd
1,225
2.7
0.0
2.7
2.8%
0.96
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.
75
TSE
6459
Daiwa Industries Ltd
1,384
2.2
2.7
5.0
2.8%
1.76
76
TSE
1768
Sonec Corp
969
3.1
0.0
3.1
2.8%
1.10
Mid-tier construction general contractor based out of Hyogo (western Japan, Kinki region). Almost all employees have a technical specialization.
77
TSE
7989
Tachikawa Corp
1,422
2.2
1.2
3.4
2.8%
1.20
78
TSE
3352
Buffalo Co Ltd
1,280
3.0
0.0
3.0
2.8%
1.09
80
TSE
2806
Yutaka Foods Corp
1,752
2.3
0.0
2.3
2.7%
0.83
81
TSE
6763
Teikoku Tsushin Kogyo Co Ltd
1,865
3.5
0.0
3.5
2.7%
1.29
82
TSE
3948
Hikari Business Form Co Ltd
911
4.0
0.2
4.1
2.7%
1.52
83
TSE
6276
Siriusvision Co Ltd
327
2.1
0.0
2.1
2.7%
0.80
84
NGO
6295
Fuji Hensokuki Co Ltd
299
2.0
0.0
2.0
2.7%
0.75
85
TSE
3597
Jichodo Co Ltd
10,170
3.0
0.0
3.0
2.6%
1.12
86
TSE
6592
Mabuchi Motor Co Ltd
4,539
2.8
1.4
4.1
2.6%
1.57
87
TSE
6248
Yokota Manufacturing Co Ltd
1,229
3.5
0.0
3.5
2.6%
1.34
Small batch, custom manufacturing of high end industrial water pumps and valves.
88
TSE
2385
Soiken Holdings Inc
221
2.3
0.0
2.3
2.6%
0.86
89
TSE
6247
Hisaka Works Ltd
976
3.6
0.0
3.6
2.6%
1.38
Industrial machinery manufacturer with largest domestic market share in plate heat exchangers and infusion sterilizers. Customers range from manufacturers of clothing, food, and household goods to pharmaceuticals and automobiles.
90
TSE
1897
Kaneshita Construction Co Ltd
2,755
1.8
0.0
1.8
2.6%
0.70
91
TSE
7447
Nagaileben Co Ltd
2,033
3.0
1.9
4.9
2.6%
1.91
92
TSE
9651
Japan Process Development Co Ltd
994
3.6
0.0
3.6
2.5%
1.42
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.
93
TSE
9872
Kitakei Co Ltd
995
2.4
0.0
2.4
2.5%
0.95
94
TSE
9932
Sugimoto & Co Ltd
2,171
2.8
0.0
2.8
2.5%
1.10
95
TSE
6497
Hamai Industries Ltd
976
2.6
0.0
2.6
2.5%
1.03
96
TSE
1810
Matsui Construction Co Ltd
771
3.5
0.4
3.9
2.4%
1.62
97
TSE
4312
Cybernet Systems Co Ltd
776
3.7
0.9
4.6
2.4%
1.92
98
TSE
6167
Fuji Die Co Ltd
660
3.3
0.0
3.3
2.4%
1.39
99
TSE
7949
Komatsu Wall Industry Co Ltd
2,896
3.0
0.0
3.0
2.4%
1.25
Komatsu Wall Industry is a partition manufacturer specializing in movable, fixed, and mobile partitions as well as toilet booths for offices, factories, and hotels. It commands a leading 25% market share for partitions in Japan.
100
TSE
9441
Bell-Park Co Ltd
1,680
2.9
0.0
2.9
2.3%
1.25
101
TSE
4761
SAKURA KCS Corp
823
1.8
0.0
1.8
2.3%
0.78
102
TSE
6337
TESEC Corp
2,833
2.8
1.4
4.3
2.3%
1.86
103
TSE
2491
ValueCommerce Co Ltd
1,225
4.6
0.0
4.6
2.3%
2.00
104
TSE
3970
Innovation Inc
1,231
2.9
0.0
2.9
2.3%
1.26
105
TSE
7999
MUTOH HOLDINGS Co Ltd
2,011
1.7
0.0
1.7
2.3%
0.76
106
TSE
6482
Yushin Precision Equipment Co Ltd
685
2.9
0.0
2.9
2.3%
1.29
107
TSE
1879
Shinnihon Corp
1,229
1.8
0.0
1.8
2.2%
0.80
Construction and real estate company involved in land acquisition, construction, sales, and management of condominiums. Mid-tier condo supplier only behind Nomura Real Estate Development and other conglomerates in scale.
108
TSE
7749
Medikit Co Ltd
2,751
3.3
0.0
3.3
2.2%
1.45
110
TSE
4247
Poval Kogyo Co Ltd
1,204
3.1
0.0
3.1
2.2%
1.39
111
TSE
6134
Fuji Corp
2,369
3.4
0.0
3.4
2.2%
1.57
113
TSE
9986
Zaoh Co Ltd
2,447
3.5
0.0
3.5
2.1%
1.63
114
TSE
5988
Piolax Inc
2,257
3.1
0.0
3.1
2.1%
1.47
115
TSE
4624
Isamu Paint Co Ltd
2,930
1.7
0.0
1.7
2.1%
0.82
116
TSE
3766
SYSTEMS DESIGN Co Ltd
782
1.9
0.0
1.9
2.1%
0.92
118
TSE
7804
B&P Co Ltd
1,426
2.2
0.3
2.5
2.1%
1.20
119
TSE
1835
Totetsu Kogyo Co Ltd
2,910
3.0
0.2
3.3
2.0%
1.59
120
TSE
6678
Techno Medica Co Ltd
2,232
2.8
0.0
2.8
2.0%
1.38
121
TSE
3396
Felissimo Corp
966
1.5
0.0
1.5
2.0%
0.76
122
TSE
9340
Aso International Inc
669
3.2
0.0
3.2
2.0%
1.63
123
TSE
4728
TOSE Co Ltd
731
3.4
0.0
3.4
2.0%
1.75
124
TSE
7899
Mics Chemical Co Ltd
400
2.0
0.0
2.0
1.9%
1.03
125
TSE
5982
Maruzen Co Ltd
2,168
2.8
0.0
2.8
1.9%
1.42
126
TSE
6769
THine Electronics Inc
802
1.9
0.0
1.9
1.9%
0.97
127
TSE
5461
Chubu Steel Plate Co Ltd
2,098
2.4
0.0
2.4
1.9%
1.26
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.
128
TSE
7833
IFIS Japan Ltd
622
2.4
0.0
2.4
1.9%
1.28
Provides financial/investment info institutional investors, brokerage firms, and individual investors.
129
TSE
3800
Unirita Inc
1,833
3.7
0.0
3.7
1.9%
1.97
Software developer. Offerings include data utilization tools, cloud services, system operations (including mainframe), consulting & training, outsourcing, and contingency planning.
130
TSE
4719
Alpha Systems Inc
2,939
3.1
0.0
3.1
1.8%
1.66
131
TSE
7937
Tsutsumi Jewelry Co Ltd
2,371
1.3
0.0
1.3
1.8%
0.70
Imports precious stones, manufactures jewelry, and operates jewelry stores. Primarily in the Tokyo & surrounding area. Tsutsumi family has controlling interest.
132
TSE
5121
Fujikura Composites Inc
1,258
2.7
0.0
2.7
1.8%
1.48
133
TSE
4424
Amazia Inc
457
0.0
3.5
3.5
1.8%
1.91
134
TSE
1776
Sumiken Mitsui Road Co Ltd
1,035
2.9
0.0
2.9
1.8%
1.65
135
TSE
9632
Subaru Enterprise Co Ltd
12,130
3.2
0.0
3.2
1.8%
1.81
136
TSE
2185
CMC Corp
1,370
2.0
0.5
2.5
1.8%
1.42
139
TSE
4287
Just Planning Inc
315
2.3
0.0
2.3
1.7%
1.38
140
TSE
9743
Tanseisha Co Ltd
889
3.2
0.0
3.2
1.7%
1.90
141
TSE
6246
Techno Smart Corp
1,633
2.7
0.0
2.7
1.6%
1.68
142
TSE
3542
Vega Corp Co Ltd
502
2.0
0.0
2.0
1.6%
1.27
143
TSE
2483
HONYAKU Center Inc
1,907
2.1
0.0
2.1
1.6%
1.34
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.
145
TSE
2325
NJS Co Ltd
2,900
2.4
0.0
2.4
1.5%
1.57
Water system, sewage, and environmental consulting company. Part of Nippon Hume (TSE: 5262).
146
TSE
3841
Jedat Inc
1,006
2.0
0.0
2.0
1.5%
1.29
149
TSE
3940
Nomura System Corporation Co Ltd
113
2.9
0.0
2.9
1.5%
1.97
151
TSE
6309
Tomoe Engineering Co Ltd
2,991
1.7
0.0
1.7
1.5%
1.15
152
TSE
4752
Showa System Engineering Corp
1,233
2.6
0.0
2.6
1.4%
1.78
154
TSE
4491
Computer Management Co Ltd
1,474
2.0
0.0
2.0
1.4%
1.43
155
TSE
7970
Shin-Etsu Polymer Co Ltd
1,344
2.4
0.0
2.4
1.4%
1.70
156
TSE
2487
CDG Co Ltd
1,293
2.0
0.0
2.0
1.4%
1.45
157
TSE
6744
Nohmi Bosai Ltd
1,799
2.1
0.0
2.1
1.4%
1.54
158
TSE
6820
Icom Inc
3,315
1.5
0.0
1.5
1.4%
1.11
159
TSE
3799
Keyware Solutions Inc
676
1.8
0.0
1.8
1.3%
1.38
160
SSE
1832
Hokkai Electrical Construction Co Inc
678
1.5
0.0
1.5
1.3%
1.12
161
TSE
3641
Papyless Co Ltd
886
1.1
0.0
1.1
1.3%
0.88
163
TSE
6417
Sankyo Co Ltd
6,784
1.6
0.2
1.8
1.3%
1.43
164
TSE
5304
SEC CARBON Ltd
13,710
1.8
0.0
1.8
1.3%
1.44
165
TSE
5576
OB System Inc
2,147
2.0
0.0
2.0
1.3%
1.62
166
TSE
3986
bBreak Systems Co Ltd
1,451
0.8
1.1
1.9
1.2%
1.57
170
TSE
2107
Toyo Sugar Refining Co Ltd
1,972
1.7
0.0
1.7
1.2%
1.51
171
TSE
6278
Union Tool Co
3,865
2.1
0.0
2.1
1.2%
1.83
172
TSE
6730
Axell Corp
1,801
2.2
0.0
2.2
1.1%
1.94
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.
175
TSE
7608
Sk Japan Co Ltd
696
1.6
0.0
1.6
1.1%
1.43
Plans, produces, and sells prize goods (mostly cartoon character figures) for arcades/amusement facilities. Also creates original products and wholesales snacks.
177
TSE
3723
Nihon Falcom Corp
1,284
1.6
0.0
1.6
1.1%
1.47
Game developer with strength in roll playing games (RPG). "Ys" series is core product. Also produces and sells games licensed from foreign game developers.
178
TSE
7501
Tiemco Ltd
793
0.7
0.0
0.7
1.0%
0.67
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).
184
TSE
2819
Ebara Foods Industry Inc
2,990
1.3
0.1
1.5
0.8%
1.75
185
TSE
4394
eXmotion Co Ltd
905
1.6
0.0
1.6
0.8%
1.96
188
TSE
4551
Torii Pharmaceutical Co Ltd
3,870
1.2
0.0
1.2
0.8%
1.53
189
TSE
2425
Care Service Co Ltd
710
1.4
0.0
1.4
0.8%
1.79
191
TSE
4621
Rock Paint Co Ltd
1,412
1.2
0.0
1.2
0.8%
1.59
192
TSE
6599
Ebrains Inc
2,368
0.9
0.0
0.9
0.8%
1.21
194
TSE
7634
Hoshi Iryo-Sanki Co Ltd
4,115
1.5
0.0
1.5
0.7%
2.00
197
TSE
4059
Magmag Inc
519
1.3
0.0
1.3
0.7%
1.87
198
TSE
6249
Gamecard-Joyco Holdings Inc
3,615
0.9
0.0
0.9
0.6%
1.44
Market share leader (~43%) in pachinko payment systems. Shares held by major pachinko machine manufacturers.
201
TSE
9339
Coach A Co Ltd
1,439
0.8
0.0
0.8
0.5%
1.51
202
SSE
3849
Nippon Techno Lab Inc
870
0.6
0.1
0.7
0.5%
1.35
203
TSE
2669
Kanemi Co Ltd
3,125
0.7
0.0
0.7
0.4%
1.94
204
NGO
5075
Upcon Corp
1,355
0.3
0.0
0.3
0.3%
1.06
205
TSE
3622
Netyear Group Corp
620
0.5
0.0
0.5
0.3%
1.77
210
TSE
4582
SymBio Pharmaceuticals Ltd
361
0.0
0.3
0.3
0.2%
1.96
212
TSE
9242
Media Research Institute Inc
1,673
0.0
0.2
0.2
0.1%
1.80
213
TSE
6335
Tokyo Kikai Seisakusho Ltd
373
0.0
0.0
0.0
0.0%
0.78
214
TSE
6898
Tomita Electric Co Ltd
1,817
0.0
0.0
0.0
0.0%
0.74
Specialized manufacturer of soft ferrites, a magnetic electronic component commonly used in inductors, transformers, and microwaves. Nearly half of revenues generated overseas.
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.
