Characteristics of the division of labor and geography in the Japanese home video game industry

Abstract

With advances in the "content industry," geographers have debated its spatial characteristics. Some have suggested that this industry will tend to agglomerate in large cities, because creativity, which is of crucial importance, is cultivated in such regions, while others have argued that the development of information technology enables it to decentralize. This difference is caused by the lack of an appropriate approach. This paper therefore aims to examine the division of labor in the Japanese home video game industry and clarify its spatial characteristics with special attention to the labor market and business relationships. The firms in this industry are classified into four types based on the differences among their functions: platform, production, selling, and distribution. Although they have varied characteristics, generally speaking they prefer intermediate recruiting to hiring new graduates, and mid-career workers are fond of working in the central area of Tokyo. The turnover rate is very high, for emotional conflicts among creative workers is often caused by their enthusiasm for their creations. In addition partial outsourcing requires them to be located nearby due to the necessity for dense and quick information exchanges. Hence, the enormous local labor market and convenience of communication might result in industrial agglomeration in central Tokyo. Agglomeration enables firms to decrease the uncertainty of management relatively easily by saving their internal resources and increasing the chance of transactions. In the meantime, flexible transaction networks and broad information exchanges are not common in this agglomeration. This means that the effects of decreasing uncertainty occur not only in regions where personal or business relationships are dense, but also where a lot of specialized workers and firms exist. Flexible and dynamic networks, which are apt to be emphasized in the study of the content industry, are unusual in this industry. In addition, business relationships are not constructed in a multilayered hierarchy, This is why the characteristics of the division of labor originated in history and the features of the products guarantee the independence of the firms and limit the small number of firms participating in the production of one game software.