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GASHAPON—“Turning” Entertainment into a Market Driver YUSUKE TAKIGUCHI Executive Officer General Manager Capsule & Small Toy Business Department BANDAI CO., LTD. KAZUYA MAEDA Division Manager Solution Business Division Executive Officer Bandai Namco Amusement Inc.

Boasting the top national market share in the GASHAPON capsule toy business

Takiguchi:GASHAPON is an original capsule toy brand that has been loved by children for many years. Recently, we have been promoting product development for the mature fan base, and this has helped garner support for the brand from a wide range of age groups, from children to adults.

Maeda:GASHAPON is also widely known by tourists visiting Japan. To that end, the capsule toy machines installed in the passenger terminal at Narita Airport are reported to have the highest sales in Japan, serving as a popular spot for souvenirs before returning home. The size of the market for capsule toys in Japan is also rapidly increasing, growing from ¥65 billion in FY2023.3 (up 44% YoY), to ¥80 billion in FY2024.3 (up 23% YoY),* closing in on the ¥100 billion level.

* According to Toy Market Data of the Japan Toy Association

GASHAPON station Takiguchi:Bandai Co., Ltd., has been active in the capsule toy market for nearly half a century, making an entrance in 1977. We gave the name GASHAPON to our brand of capsule toys based off Japanese onomatopoeia, with “gasha” being the sound made when turning the crank on the machine, and “pon” being the sound made when the capsule comes out of the machine. We have created numerous hit products through a lineup that capitalizes on trends in this era of diverse IPs, and have steadily enhanced the performance capabilities of GASHAPON vending machines year by year. A major turning point in this business was when we made the bold decision to target higher price ranges, seeking to compete by offering value suitable for higher prices. Through these efforts, we have been able to acquire the leading share of nearly 60% in the national toy market.

Creating new markets with GASHAPON specialty stores

Maeda:Although the capsule toy market is currently thriving, the market size in the past remained around ¥30 billion. Even by the second half of the 2010s, the market was around ¥35 billion. What significantly changed the landscape of the capsule toy market was the successive creation of GASHAPON specialty stores.

CAPSULE TOY MARKET TREND
YUSUKE TAKIGUCHI

Takiguchi:Selling capsule toys conventionally centered on setting up capsule toy machines in available spaces at stores and other locations. This method of establishing machines in the corners of stores or in shared corridors between facilities inevitably placed limitations on the number of machines that could be set up. Even if a diehard capsule toy fan heard news of a new product being released, they would not be able to know where, when, and how many of the toys would be in stock. By establishing GASHAPON specialty stores, which offer a wide variety of capsule toy machines and bring together various products and relevant information, we have met the needs of these types of fans, as they know that they will find what they are looking for if they visit one of these stores. Accordingly, BANDAI and Bandai Namco Amusement have decided to team up to expand the number of these specialty stores not only to ensure we do not miss out on solid business opportunities but also to help uncover latent demand in the market.

Maeda:We have been opening GASHAPON Department Stores across Japan, starting with the opening of locations in Hakata and Yokohama in August 2020. We stock the latest popular items in the GASHAPON corners of these stores and have introduced a system where customers can confirm store inventories before visiting. Through these stores, we are advancing a broad range of initiatives to support fan interest in GASHAPON. These include establishing a space where customers can take pictures of their GASHAPON products as they wish and offering points to customers via an app every time they visit stores.

KAZUYA MAEDA

Takiguchi:In September 2019, we opened the first Gashapon Bandai Official Shop (GBO) in Tokyo, thus commencing our efforts to open specialty stores. The GBO is a genuine specialty store offering only Bandai products. In addition to having all of the features of the GASHAPON Department Stores, the GBO Shop has introduced new initiatives, such as linking with GASHAPON Online—a website offering in-store pickup and various other features that was launched at the same time as the GBO—and hosting events in which fans can participate.

Maeda:The turning point for the capsule toy business came in 2020, right when the COVID-19 pandemic was having a major impact on the Japanese economy. At the time, many tenants were withdrawing from prime locations, such as urban centers and busy shopping areas, and this created favorable conditions for opening new stores. As of March 31, 2024, there were 101 GASHAPON Department Stores and 211 GBO Shops nationwide. This means we have opened a total of 312 stores in just under four years. This rapid pace of store openings has helped open up a new market in Japan and has invigorated the capsule toy industry as a whole.

Note: As of March 2024. Locations that combine both GBO Shops and GASHAPON Department Stores are counted as GBO Shops.

GASHAPON Bandai Official Shop, GASHAPON Department Store

Promoting a global growth strategy focused on Japan, Asia, and North America

Maeda:As for our current situation, the phase of expansion through the opening of stores in promising locations in Japan is nearing completion, and going forward a more strategic approach is required. As growth in the number of store openings eventually slows down, we will find ourselves in a era of intensifying competition. Taking these kind of changes into account, the Bandai Namco Group is promoting a global growth strategy focused on the three regions of Japan, Asia, and North America.

Japan: Pursuing differentiation through Group collaboration

Takiguchi:In Japan, we will pursue differentiation centered on GBO, drawing on the strength of our dominant market share. The key to doing so will be Group collaboration. At the moment, we have commenced proactive cross-brand sales initiatives, such as adding products that were not originally developed as capsule toy items into our GASHAPON lineup. These include bath salts and cosmetics from the lifestyle business.

Cosmetic items from the lifestyle business

Maeda:One example of these initiatives has been the establishment of GASHAPON specialty stores at our Bandai Namco Cross Stores, which are experience-based retail stores that offer Group products and hold events.

Asia: Promote a lateral expansion of know-how from the Japanese market

Takiguchi:Japanese anime has long been very popular in Asia, and the joy that anime fans and other customers feel when they are able to easily acquire the IP products they desire has helped support our capsule toy business in the region. Asia is also both geographically and culturally close to Japan, so promoting an approach that involves the lateral expansion of our know-how from the Japanese market is quite effective. We currently have opened 23 GBO in regions such as inland China, Malaysia, and the Philippines. Moving forward, we will bolster the manufacturing of capsule toy machines in inland China, the Philippines, and Thailand with a view to establishing a more global supply structure.

North America: Approaching the massive local market through promotions aimed at people not familiar with capsule toys

Takiguchi:At the moment, we have a total of 16 GBO in North America, which is a key region for our business. With sales per store in the region exceeding that of Japan, the market in North America presents tremendous business potential for us. Due to how expansive the region is, we will first focus on selecting locations with strong potential for attracting customers and aim to expand our network of stores to include 50 locations. Meanwhile, GASHAPON’s level of recognition among the average consumer is still relatively low. We therefore will roll out innovative promotions involving the production of videos introducing ways to enjoy GASHAPON, including how to operate the handle of machines, and marketing activities that utilize social media and influencers. Furthermore, we intend to make use of the insight we gain in North America to promote an entry into European regions.

Maeda:In Europe, we have opened eight stores centered on London, United Kingdom, and we plan to expand this number moving forward.

Bandai Namco Cross Store's GBO in London, United Kingdom

Making “GASHAPON” a word known around the world

Takiguchi:While similar toys exist overseas, the performance capabilities of capsule toy machines is still relatively low, and the culture of capsule toys has yet to firmly take root. As such, many fun ways to enjoy capsule toys are not widely known. Such circumstances actually provide us with a great opportunity to commence a global rollout and branding activities ahead of other companies. We therefore aim to make “GASHAPON” a word known around the world so that people in each country view all toys contained in capsules as GASHAPON. The types of capsule toys are evolving alongside the changing times. But, no matter the era, the joy of turning the handle of a machine and receiving a high-quality product after doing so remains universal. We will accelerate Groupwide efforts to promote the widespread adoption of GASHAPON as a Japanese form of entertainment that offers such joy.

Messages from the personnel in charge
Yusuke
Takiguchi
We will accelerate Groupwide efforts to promote the widespread adoption of GASHAPON, making the word known around the world as a Japanese form of entertainment.
Kazuya
Maeda
By offering physical stores as a location to experience the fun of GASHAPON, we will steadily increase the number of Bandai Namco fans worldwide.
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