"Love for Favorite Characters" Knows No Borders! The Potential of Inbound Tourism × Amusement Facilities

From left: Dentsu Inc.'s Maki Sakuraba, Taito's Motohiro Tanaka, Dentsu Inc.'s Keisho Uto

Inbound demand, which had been interrupted by the pandemic, is now rebounding with even greater momentum than before COVID-19. With the influence of exchange rates, Japan's shift towards becoming a tourism-based nation is expected to accelerate further.

Amidst this, Taito, operator of the "TAITO STATION" arcade chain, conducted a promotional PoC (proof of concept) experiment in media and stores timed with the Chinese New Year (※), a period when Chinese visitors to Japan increase.

※ Spring Festival refers to the Chinese Lunar New Year. In China, the Spring Festival marks a long holiday period, with hundreds of millions of people traveling annually, making it a time when tourist numbers to Japan also increase.

 

The key point of this project is that it started not merely as a promotional measure to attract tourists, but from "strategically considering inbound tourism as a company-wide business initiative."

We spoke with Mr. Motohiro Tanaka, Managing Executive Officer of Taito Corporation, and Ms. Maki Sakuraba and Mr. Keisho Uto of Dentsu Inc. Business Transformation Division, who supported the project, about the initiative's content and results.

<Table of Contents>

▼Popular IP Character Prizes Attract Visitors to Japan!

▼Viewing it as a "Opportunity to Build Overseas Fans" in the Medium to Long Term

▼Inbound Initiatives Become an Opportunity to Consider Branding, Including Domestically

Popular IP Character Giveaways Attract Inbound Visitors!
&nbsp;

Taito's Mr. Tanaka

Sakuraba: Please tell us about the situation before implementing the PoC.

Tanaka: Our amusement facility business saw a downturn during the COVID-19 pandemic, but achieved a V-shaped recovery over the past two years, growing by over 10% year-on-year for two consecutive years. Driving this growth was crane games, which account for a large portion of store sales in our revenue mix.

The reason for the crane games' strong performance is the availability of character prizes from popular IP (intellectual property such as protected anime, comics, and games), which drives significant sales. Moreover, popular IP holds influence not only within Japan but also overseas.

In recent years, Japanese IPs like anime have become extremely popular in China. The ability to obtain prizes featuring these characters, often referred to as "favorite characters," is a key factor drawing visitors to Japan to game centers. The increase in visitors seeking character prizes has significantly contributed to overall business growth.

Sakuraba: What is the ratio of Japanese customers to foreign visitors at TAITO STATION?

Tanaka: It varies by location, but in areas with high inbound traffic, some stores see over 50% of their visitors being foreign tourists. At these locations, sales are about 5-10% higher compared to stores less affected by inbound tourism.

Sakuraba: Having over half the customers be foreign visitors is quite impactful. And those stores generate higher sales, right?

Tanaka: Yes. The increase in foreign visitors not only contributes to store sales and customer numbers, but also brings customers during "weekday daytime hours" when Japanese customers are scarce. This helps even out customer numbers across different times of the day.

The flagship TAITO STATION Akihabara store. Popular IP character prizes are displayed at the front, visible to passersby. TAITO STATION stores have various unique features depending on the location, such as "a wide selection of retro games," "alcohol service," or "horror attractions."

Sakuraba: Given this situation, could you tell us about the background behind planning this project?

Tanaka: With inbound demand expected to grow significantly in the future, we aimed to strengthen our promotional activities targeting inbound visitors and establish the brand "When it comes to game centers, it's TAITO."

While TAITO STATION hadn't previously conducted aggressive promotional activities targeting inbound visitors, a survey indicated that TAITO had the highest proportion of foreign-language reviews online compared to its competitors.

When we began considering inbound promotions in the summer of 2023, visitor numbers to Japan had not yet fully recovered. We therefore aimed to maximize effectiveness by first conducting a Proof of Concept (PoC) focused primarily on China.

We approached Dentsu Inc. because the Business Producers Division 12 had supported various promotional initiatives for our separate "Online Crane" business, and they also possess expertise in inbound promotion strategies.

Reference: Online Crane "Taikure"
https://www.taito-olcg.com/web/top/

Viewing it as a mid-to-long-term opportunity to build a global fanbase

Dentsu Inc., Mr. Sakuraba

Sakuraba: This was a seven-month project. What concept or approach guided it, and what specific measures were implemented?

Tanaka: We started by identifying needs. We conducted interviews with Chinese individuals planning to visit Japan who showed interest in Japanese IP, as well as those residing in Japan who serve as guides for visiting Chinese tourists. The interview objectives were:

• "What do you think of Japanese game centers?"
• "Would they want to visit game centers during their trip to Japan?"
• "How well-known is the Taito brand?"

Among other things.

The results revealed that regarding Japanese game centers, they hold the impression that "official products made with publisher permission are available" and that "prizes are easier to win than in Chinese game centers." We also learned that assistance from staff to help win prizes could be promoted as a uniquely Japanese service.

Through these interviews, we gained valuable insight into the level of interest in Japanese game centers among Chinese consumers. We confirmed that Japanese IPs are genuinely popular and that prizes featuring them are a major draw.

On the other hand, we also understood that few people planned to visit Japanese game centers before coming to Japan; they were primarily seen as "places to visit if spotted while out and about."

Furthermore, there was no significant difference in brand recognition compared to competitors. Based on these results, we concluded that implementing Taito's brand recognition initiatives could achieve differentiation.

When designing the PoC, we followed the inbound consumer journey proposed by Dentsu Inc.

Uto: We executed a promotion centered on influencer campaigns on Xiaohongshu (RED), a social media platform that Chinese visitors to Japan invariably consult before their trip. Xiaohongshu is essentially China's version of Instagram, a platform particularly strong in shaping reputation.

Our influencer campaign led to "taito" appearing prominently in search results for terms like "Japan crane game" and "Tokyo crane game" on Xiaohongshu. We also ran ads on China's largest lifestyle information app.

For physical stores, posters were displayed in six locations across Tokyo, including the Akihabara store. Scanning the QR code on these posters offered a novelty gift and aimed to increase followers on the official WeChat account.

TAITO STATION Shibuya. Pictogram signs were installed at the storefront to clearly communicate the types of games available to visiting tourists. The pictogram signs were proposed by the store and implemented during renovations.

Sakuraba: What kind of opinions were there within TAITO as you moved forward with this project?

Tanaka: Initially, there was some skepticism. This is because, while we operate stores nationwide in Japan, the ratio of inbound tourists to our total customer base is less than 10%.

Even though the visitor ratio has increased compared to pre-COVID levels, Japanese customers still overwhelmingly dominate TAITO STATION overall. Because we rely heavily on them, some questioned the cost-effectiveness of focusing specifically on visitors, particularly Chinese tourists.

Additionally, TAITO wasn't effectively utilizing social media for marketing. With significant room for improvement, some argued, "Shouldn't we strengthen promotional activities targeting Japanese customers before focusing on visitors?"

Uto: True, since stores in areas with high inbound tourist traffic are limited, looking at Japan as a whole, it makes you wonder, "Why just there?"

Tanaka: However, we anticipate a continued increase in inbound tourists. Precisely because competitors operating game centers haven't established brand recognition outside Japan, we decided to proceed with the project. We believe promoting the "Taito brand" to potential future visitors and building its presence will become a significant asset from a medium-to-long-term perspective.

Uto: When we first heard about this, we really resonated with the idea of "strategically considering inbound as a business." That's because at Dentsu Inc., we also believe that treating inbound not just as "promotion for tourists," but as a "long-term business to increase overseas fans," ultimately yields greater rewards.

Inbound initiatives as a catalyst for considering branding, including domestically

Dentsu Inc., Mr. Uto

Sakuraba: What kind of results did you see after actually implementing the PoC?

Tanaka: We ran it in February to coincide with the Lunar New Year. While we didn't see a significant increase in sales compared to other months, the fact that we maintained strong sales during February—typically a slow period—shows it indirectly contributed.

We also saw reactions beyond short-term sales. For instance, as one initiative, we trialed a "compression machine" service to compress acquired prizes for easier transport. This unique service generated significant buzz, including a customer video posted on social media reaching 500,000 views. Additionally, we received many inquiries about it.

Uto: Online buzz also greatly impacts brand penetration, right? What was the most critical operational point when actually implementing the PoC?

Tanaka: Collaboration within the joint project team between stores and headquarters. Crucially, "coordination with store staff" who directly interact with visitors was vital. We held a kickoff meeting in October that included store staff. They had many ideas they wanted to implement, so numerous opinions were shared, and we held repeated discussions. Since the service targeted visitors arriving in February, preparations fell during the peak year-end and New Year period. We are grateful for the full cooperation from all stores.

Sakuraba: Based on the results of this initiative, how do you envision TAITO STATION's future approach to inbound tourism?

Tanaka: We intend to continue implementing inbound initiatives like this one. By doing so, we hope to enhance the TAITO brand's recognition overseas. In the medium to long term, we expect this to attract more international visitors to our stores, ultimately contributing to increased sales.

Moreover, the results of this project extended beyond just inbound tourism. While initially targeted solely at Chinese tourists, as the project progressed, it led to a renewed recognition within the company of the importance of enhancing awareness of the "TAITO brand." As a result, we reaffirmed our company's strengths, and I believe efforts towards branding, including within Japan, have now gained company-wide awareness.

Building on this project, we are now reviewing our SNS strategies and sales promotion tactics, including those targeting Japanese customers, while also beginning to explore how to implement effective communication activities globally.

Sakuraba: The fact that a project initiated for inbound tourism ultimately became an opportunity to consider branding, including domestically, is highly meaningful for us as well. We hope to be of service regarding branding efforts both domestically and internationally. Thank you for your valuable insights today!

The project team that worked on this PoC. From left: Takako Shibano, Kengo Toyoda, and Tanaka from Taito's Corporate Planning Department; Rui Nishikai and Sakuraba from Dentsu Inc.'s Business Transformation Division; and Yosuke Suganuma and Uto from Dentsu Inc.'s Business Producers Division 12.

&nbsp;