The Sports Law Review: Participation in Japanese E-Sports
The e-sports industry in Japan is growing at a quick pace, and, as a result, organisers and players are beginning to look to Japan as a destination for global tournaments and events. Despite this, the legal framework relating to e-sports in Japan (such as restrictive regulations regarding prize money and a rigid immigration system) has not yet adapted to the rise of e-sports, and any player or organiser looking to conduct e-sports activities in Japan must make sure to navigate them successfully. This chapter provides a summary of the e-sports landscape in Japan before focusing on a discussion of how Japanese immigration laws affect participation in e-sports in Japan.
II Overview of the e-sports industry in Japan
Japan is the home of many popular video game companies, including Nintendo, Sony, SEGA, CAPCOM, SQUARE ENIX and KONAMI. Thus, the Japanese video game industry is robust, bringing in US$19.2 billion in game revenue in 2018 and serving 67.6 million players in Japan.2
However, while Japan's video game industry as a whole is strong and Japan is the third-largest video game market worldwide, e-sports is less popular in Japan than in other countries, such as the United States, China and South Korea. Revenue from the Japanese e-sports market in 2018 was only US$44.2 million,3 accounting for roughly 0.3 per cent of the revenue of the total Japanese video game industry.
However, the landscape is changing quickly, and Japanese e-sports is in the midst of a boom. The 2018 revenue figure of US$44.2 million grew from a mere US$3 million in 2017 and is expected to rise further in 2019. Given that the worldwide e-sports market brought in US$905.6 million in global revenue in 2018,4 Japan is an important emerging market for e-sports.
One of the reasons that the development of e-sports in Japan has been hindered is the uncertainty of the interpretation of legal regulations restricting the amount of prize money and the operation of e-sports businesses. Because of the market's rapid growth, solutions to these regulatory issues are beginning to arise.5 However, much of the discussion of the regulatory hurdles facing e-sports has overlooked the immigration aspect despite the fact that immigration issues are critical given the international nature of the e-sports industry. Given this, this chapter aims to provide a basic overview of Japanese immigration laws as they relate to e-sports as a starting point for future discussions.
III General immigration requirements for foreign e-sports players
Japan has held and will continue to hold several tournaments involving international players, including Evo Japan6 and the League of Legends7 Japan League. Foreign players wishing to participate in these tournaments are subject to the Immigration Control and Refugee Recognition Act (the Immigration Act).
The Immigration Act requires that e-sports players obtain visas to participate in e-sports activities in Japan. However, e-sports competitions take various formats, such as league style, knockout tournament style, one-day competitions, exhibition matches and tournaments hosted by local e-sports cafes. Because players may get involved in e-sports in a number of different ways, the type of visas that foreign players must obtain varies (as explained in Section IV).
IV Specific visa requirements for foreign e-sports players
The possible types of visas for foreign players are the entertainer visa and the temporary visitor visa.
i Entertainer visa
Players must obtain an entertainer visa if there is any possibility that they will earn remuneration from their e-sports activities in Japan. Furthermore, even if players will not earn any prize money directly from an e-sports match in Japan, they must still obtain entertainer visas if they are professional players and their activities in Japan are regarded as part of their professional activities.
Procedures for obtaining an entertainer visa
Under the Immigration Act, the specific requirements and documentation to support an application for an entertainer visa vary based on the circumstances. First, to obtain an entertainer visa, the organisation in Japan sponsoring the player must apply for a Certificate of Eligibility (COE) with the Immigration Bureau. Once the player has received his or her COE, then the applicant must submit it to the local Japanese consulate to apply for the visa. It takes approximately two months for the COE to be issued and five working days after acceptance of the visa application for the visa to be issued. However, the Immigration Bureau may expedite the process if the circumstances require it. As a practical example, if the qualifying round for a tournament in Japan is held outside of Japan, the players participating in the qualifying round might apply for the COE or visa upon advancing past the qualifying round, and it would be advisable for the sponsoring organisation and qualifying players to have their application documents prepared before the qualifying round to minimise delays.
A sponsoring organisation in Japan, not an applicant, is the one who applies for a COE. So, the players must find sponsoring organisations to accept them. If an e-sports tournament organiser invites e-sports players to its tournament, for example, then the organiser could serve as a sponsoring organisation. That said, a tournament organiser may not be willing to sponsor. In the past when that has happened, an international e-sports team sometimes establishes a Japanese company, such as a share company (kabushiki kaisha), limited liability company (godo kaisha) or a foreign company (gaikoku kaisha). For purposes of acting as a visa sponsor, any type of corporate formation is allowed, but given that each form has different corporate governance, taxation and maintenance costs, careful consideration should be made in determining which formation is suitable for the team.
Activities allowed under the entertainer visa
As a basic rule, the entertainer visa allows holders to engage in 'theatrical performances, musical performances, sports or any other form of show business'. Generally, a player cannot perform any commercial activity outside this scope. However, as it is common for e-sports players to participate in interviews, commercial shoots, fan events or video streams on Twitch or YouTube, careful consideration needs to be paid to what kinds of activities are allowed. Interviews strictly pertaining to the competition should be allowed without any special permission under the Immigration Act, but the player would probably need to obtain separate permission to conduct any interview, commercial shoots or fan events unrelated to the tournament. Therefore, if the player wishes to participate in these sorts of activities, another application would be required.
On the other hand, video streaming for compensation would be prohibited because the Immigration Act does not have a category covering video streaming. Therefore, e-sports players may not stream their game plays or programmes on Twitch or YouTube as a business in Japan even if they have the entertainer visa; in other words, players should make sure they are not involved in streams for compensation during their stay in Japan.
ii Temporary visitor visa
In limited circumstances, an entertainer visa may not be required, and a temporary visitor visa may be sufficient. Under the rules regarding the temporary visitor visa, visitors with such status are permitted to sightsee, perform recreational activities, play sports, visit relatives, go on tours, attend lectures or meetings, meet business contacts or conduct other similar activities during a short period of stay in Japan.8 However, the Immigration Act states that temporary visitors may not conduct activities related to the management of a business involving income or activities for which they receive remuneration.
Under the Immigration Act and its ministry order, anything considered an 'incidental reward in daily life' is not regarded as remuneration,9 and players can legally receive this type of award while on a temporary visitor visa. Therefore, if a visiting e-sports player is not a professional and will receive no prize money or only an 'incidental reward in daily life', then the player may enter Japan as a temporary visitor. As there has been no official announcement regarding the line between 'remuneration' and an 'incidental reward in daily life' under the Immigration Act, it is highly recommended that visiting e-sports players, teams and organisers seek the advice of Japanese counsel on this issue.
Furthermore, if the player's country has concluded a Visa Exemption Arrangement with Japan, the player does not have to obtain a temporary visitor visa. Rather, the player is exempt from obtaining a visa at all, receiving the benefits of a temporary visitor upon entry into Japan.10 There are 68 countries that have a Visa Exemption Arrangement with Japan, including, as of September 2019, some Asian countries, Australia, New Zealand, many European countries, Canada and the United States.11
To be clear, if a player is a professional, or if prize money other than an 'incidental reward in daily life' may be earned in Japan, such player will be considered to have earned remuneration, and the player must obtain an entertainer visa. Any compensation outside Japan will also be included in remuneration. Even in situations where professional players participate in a demonstration event without any remuneration, the event will be regarded by Japanese immigration authorities as a professional activity. In these situations, the players may be refused entry or even charged for performing on temporary visitor qualifications only. In other fields, foreign entertainers have sometimes been refused entry to Japan when they failed to obtain entertainer visas even though they were to participate in unpaid activities only, such as interviews or shoots for promotional videos.
While the Japanese e-sports industry has been developing and growing, regulations governing the industry remain immature. The Immigration Act and corresponding visa regulations have uncertain application, or they have not yet adapted to accommodate e-sports players, as certain routine activities such as video streaming are not allowed in Japan at the time of writing.
However, considering the internationality of the e-sports industry, it is necessary for players, teams, and organisations to understand and follow the regulations of the Immigration Act for e-sports activities in Japan to run smoothly. Accordingly, it is highly recommended to seek the advice of a Japanese local counsel to ensure compliance with the latest developments.
1 Shigeru Nakayama is a partner and Masakatsu Nagashima is a senior associate at TMI Associates.
5 For example, a regulation regarding prize money is progressing, as stated in announcements by the Consumer Affairs Agency on 5 August and 3 September of 2019. See https://www.caa.go.jp/law/nal/pdf/info_nal_190805_0001.pdf and https://www.caa.go.jp/law/nal/pdf/info_nal_190903_0002.pdf.
7 League of Legends is a multiplayer online battle arena video game developed and published by Riot Games for PC. This is one of the most popular e-sports titles in the world. See https://na.leagueoflegends.com/en/.
8 Article 19(1)(ii) of the Immigration Act.
9 Article 19(1)(i) and Article 19-3(i)(d) of the Regulation for Enforcement of the Immigration Control and Refugee Recognition Act.
10 See the latest information about visa exemption: https://www.mofa.go.jp/j_info/visit/visa/short/novisa.html.