Why have hyper-casual games replaced gacha in Japan?

In 1999 — some 20 years before the birth of Apple’s App Store when mobile phone owners in the West could only play Snake — people in Japan already had the ability to play games directly onto their mobile phones. Since then, Japan’s mobile ecosystem has become such a dominant force that it generated $13.3B last year alone – ranking third in terms of game market size behind China and the US.

Despite this early and epic growth, the combined operating profit from games at Japan’s seven largest mobile game publishers fell 21% in the last year, and cumulatively their stocks lost $6 billion in market value. However, while the share that Japanese mobile gaming companies hold in the market is falling, the local mobile gaming market as a whole continues to grow with international games leading the way. Why is this change happening and where is this growth coming from?