Pixel P&L: While the West Crumbles, Japan’s Game Industry Is Booming

India is set to host its first-ever esports conclave, an ambitious step that could signal broader interest in competitive gaming. Meanwhile, CD Projekt Red, still shaking off the shadow of Cyberpunk 2077, is posting surprisingly strong earnings in 2024. And in a market full of red flags, Japanese gaming stocks are defying the trend. Why is Japan booming while the rest of the industry stumbles? We break it down. All that and more in today’s Pixel P&L.

/ India to Host First Esports Conclave with Backing from PEFI, KRAFTON India, and NODWIN

India will host its first Esports Conclave on April 1 in New Delhi, a step toward shaping policy and investment for the country’s growing competitive gaming sector. Organized by the Physical Education Foundation of India (PEFI), in partnership with KRAFTON India and supported by Invest India and NODWIN Gaming, the event aims to bring together government officials, industry leaders, and esports professionals.

With the theme “Forging the Path to Global Leadership,” the conclave will focus on building a roadmap for international participation, infrastructure development, and regulatory clarity. A key outcome is expected to be the release of an industry-backed framework recommending measures to strengthen esports governance in India.

As esports gains legitimacy through inclusion in events like the Asian Games and the upcoming Olympic Esports Games, the conclave reflects a growing institutional interest in structuring the sector. Organizers hope it will serve as a starting point for more coordinated public-private efforts.

CD Projekt Red Posts Strong 2024 Earnings Despite No Major Launches

CD Projekt Red reported its third-best year for net profit in 2024, despite the absence of new major releases. The Polish game developer posted sales of PLN 985 million ($254 million), down 17.9% year-over-year, while net profit declined 2.3% to PLN 469.8 million ($121.5 million).

Continued interest in Cyberpunk 2077 and its expansion Phantom Liberty drove much of the performance, generating nearly PLN 600 million ($155.1 million) in revenue. By November, Cyberpunk 2077 had surpassed 30 million units sold, while Phantom Liberty crossed 8 million.

Development spending is ramping up: The Witcher 4 entered full production, while Project Sirius, a Witcher-based multiplayer title, remains in pre-production. CD Projekt also folded The Molasses Flood studio into its core team to streamline Project Sirius development.

The company is also increasing hiring for its next Cyberpunk project, codenamed Orion, and announced a partnership with Scopely for a new title based on its IP.

🧐 On Our Radar

Japanese Gaming Stocks Surge as Western AAA Struggles. What's Behind the Boom?

While layoffs, studio closures, and canceled titles have plagued major Western developers recently, top Japanese publishers including Sony, Nintendo, Capcom, Konami, and Bandai Namco are seeing share prices reach record-breaking highs in early 2025.

This momentum is no coincidence. Nintendo and Sony continue to dominate the console space with the Switch and PS5, while Konami’s revival (driven by titles like Silent Hill 2 and Professional Baseball Spirits) marks its return as a powerhouse studio. Meanwhile, Capcom’s Monster Hunter Wilds stormed out of the gate, selling 8 million copies in just three days and extending the company’s remarkable 11-year streak of profit growth. Even Bandai Namco, which recently stumbled with the costly shutdown of its MMORPG Blue Protocol, expects to close the fiscal year with record profits, thanks to blockbusters like Elden Ring’s DLC and Dragon Ball: Sparking! ZERO.

One key factor behind this resilience could be employee stability and developer-friendly practices. While stringent employment laws limit mass layoffs, publishers have gone further. Konami has raised base salaries for four straight years. Capcom recently increased starting salaries to attract top development talent. These measures stand in stark contrast to other markets, where almost 1,200 game developers have already been laid off this year.

This emphasis on stability and improved employee conditions contrasts sharply with the turbulent Western AAA landscape. Could Japan’s sustained commitment to its workforce explain its resilience, and will it become a model the global gaming industry might follow?

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💡Did You Know

During the development of Space Harrier, SEGA president Hayao Nakayama had one rule: if a game’s graphics looked done, it was done. That meant even unfinished games risked being rushed out the door. So designer Yu Suzuki got sneaky. He rigged a hidden switch under his desk that, when pressed, would wipe the color RAM. This made the game look glitchy, even though everything else ran fine. It tricked execs into thinking the game wasn’t ready. Ironically, one of these “fake bugs” produced a sky so stunning that Suzuki paused development and saved the palette. It became the game’s final sky.

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