In the 1990’s, the rise of Personal
Computer (PC) gaming grew to be the dominant driver of growth in the computer
global market and was gaining traction in Asia Pacific (Carlson, 2006).
 The hobby of playing video games led to the evolution of Electronic sports
(e-sports) (Seitz, 2015). E-sports have diffused across the globe to the extent
that it generated revenue of $252 million (mn) in 2015. In the same year, North
America dominated the global e-sports market with $93mn in expected revenue and
grows annually by 32%. Asia-Pacific is next in line stimulated by China with
accumulated expected revenue of $85mn and year-over-year growth of 28%. (Seitz,
2015)

In Asia Pacific, the demand for e-sports
has surged significantly and has incentivized major companies to invest
heavily, such as the Chinese Internet behemoth, Alibaba Sports Group, investing
$150mn to build e-sports infrastructure such as e-sport stadiums across China,
because e-sports is “a way of life” (Esports Observer, 2017).  Over 1.2
billion people play video games globally, in which more than 700 million video
gamers play online, constituting 44% of the globe’s online population
(Takahashi, 2013). Furthermore, e-sports have attracted brand sponsors such as
Coca Cola to indulge in the frenzy of e-sports, as they are strategic partners
with the e-sports community (Schutlz, 2017). The e-sports gaming market is a
nascent industry and companies stand to benefit form the lucrative commercial
opportunity to generate revenue for not only the company, but also impact the
Gross Domestic Product (GDP) of a nation. This strategic method could impact
Japan and attract inbound travelers to participate in e-sport events happening
in other Asia-Pacific countries such as China. However, e-sports is not big in
Japan due to the legal barrier; “the act against unjustifiable premiums and
misleading representations (Act No. 134 (May 15, 1962))”  (Ashcraft,
2017).

Act
No.134 of 1962
requires business operators to not be a misleading representation to the
public. The business operator found liable to this act is enforced to pay an
administrative monetary penalty equivalent to 3% of the amount of the goods and
services charged (Sonoda, 2015). This act prevents Japan to join the global
e-sports boom because the competitors who win and receive cash prizes in
e-sports competition could promote a particular game they played to win and
could lure consumers to spend money on that particular game. The Consumer
Affairs Agency in Japan considers this action as an example of breaching the
law, Act No.134 of 1962 (Nikkei, 2017).
This challenge does not prevent Japanese professional players to make a living
like the players from China and South Korea, but prevents Japan to host
e-sports competition events. Furthermore, Hirokazu Hamamura, the president of
Gzbrain, stated that “E-sports is mainly about games played on PCs, and
Japanese gamers are not that familiar with this genre” (Nikkei, 2017).
Since Japan’s software makers, such as Square Enix Holdings Inc., Capcom Co.
and Bandai Namco, made fortunes with Japanese consumers who prefer to play
games alone (Nakamura, 2017), this enables the Japanese consumers to develop
the Galapagos syndrome. The Japanese’s difference is considered a virtue, which
could lead Japan to deteriorate its global presence in terms of international
politics and concerns as well as economic competitiveness and success (Stewart,
2010). However, in regards to Japanese gamers, they are training to refrain
from the Galapagos effect.

Since Japan was dominant in the world of
video games, Jikei Gakuen Group established an e-sports school in Osaka in an
attempt to prevent Japanese gamers from developing the Galapagos syndrome and
allow the students to participate and utilize their video-game talents in
competing strongly in the lucrative market, e-sports (Lewis, 2017). This is a
step for Japan to engage with the global environment rather an continue to be
isolated, which will attract inbound travelers to  conform with the
Japanese culture. If the Japanese government exempts e-sports from the act,
Japan could have not only attract e-sport competitors to compete in
competitions hosted in Japan, but also influence e-sports international
spectators and fanatics to experience the Japanese culture and enjoy its
tourist attraction sites.

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Another factor that dissuades inbound
travellers are uncontrolled natural disasters happening in Japan. Natural
disasters fluctuate the frequency of inbound travellers who are susceptible to
these unexpected events (source). Since
tourism is an imperative driver impacting economic growth, these natural
disasters may deprive inbound travelers to have unique experiences, business
ventures, or opportunities in Japan. However, inbound travellers are sensitive
to unexpected occurrences such as frequent earthquakes with the magnitude
ranging between 6.2 and 9.0 (Chow, 2016), and the radiation scare due to the
Fukushima nuclear disaster. threatens them to visit Japan (Birmingham, 2011).
On March 11, 2011, Japan experienced the Tohoku Pacific Earthquake, which this
incident accounted for over $195 billion of Japan’s expenditure towards
reconstructing Japan’s infrastructure (Nanto, 2011). These phenomena do not
only dissuade the inbound travelers but also affects the incremental revenue
generated from foreign tourists to strengthen Japan’s economic structure. As a
result, Japan experienced a staggering difference of a 28% decrease in tourism
sector, from 8.6mn in 2010 to 6.2mn inflow of inbound tourists (Moore, 2015).

Although
Japan faced the 2008-09 global recession and the natural disaster in 2011, the
frequency of inbound travelers have impacted greater flight capacity due to
low-cost carriers, the depreciation of the Japanese yen and the visa
requirements ease for inbound tourists to visit Japan (The Japan Times, 2014).
In 2014, the influx of inbound tourists stormed Japan to over 13mn and
continuously grew more than 19mn. Furthermore, Japan has transformed places
that evolved through natural disasters into tourist attractions. For example,
Japan has designated the radiated ghost-towns as a tourist attraction sites in
Fukushima, and the inbound tourists enjoy the Kinosaki Onsen – “the hot springs
heated by volcanic activities” (DW Travel, 2016). Although, these tourist
attraction sites are dangerous, they are great historical tourist attractions
sites to enthuse many inbound tourists to experience the unique culture of
Japan. Also, the inbound tourists have the opportunity to develop the passion
for kawaii, value Wabi-Sabi; the melancholic, exquisite, beauty of nature and
enjoy the varieties of products the Japan offers to not only their citizens but
also inbound tourists as well.  

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