A study by Taiwanese and Japanese researchers has found that video games translated into local languages can boost sales revenue in those markets by as much as 12.1 percent, the first research to offer concrete evidence of how translation supports international trade.
While translation is known to lower cultural barriers and make products more accessible to consumers, its economic impact has long been difficult to measure.
The study, led by Academia Sinica Institute of Economics researcher Yang Tsung-han (楊宗翰) and Yuta Watabe, a research fellow at the Tokyo-based Institute of Developing Economies, analyzed sales data from more than 10,000 video games in 2018 across more than 70 countries on Steam, which accounts for about 70 percent of global game sales.
Photo: CNA
They found that localized games earned at least 10 percent more revenue in markets where they were translated, highlighting the commercial value of product localization.
Yang said the team chose video games rather than books as their subject because books in different languages are considered separate products competing for the same audience.
In contrast, video games typically have a single version in which players can freely select their preferred language, providing a cleaner comparison of the translation’s effect on sales, he said.
Video game sales have surpassed film, music and sports in global sales, and can be instantly purchased across borders online, he added.
Game translations and subtitles also directly affect player experience, making the game easier to learn and understand, he said.
Games offering more language options are typically produced by larger companies, as translating into multiple languages requires significant financial resources, Yang said.
How much financial firepower a company has naturally determines its ability to use translation to bridge cultural and linguistic divides, he said.
However, the data were collected before the emergence of ChatGPT and other artificial intelligence (AI) translation tools, Yang said.
The team’s model suggests that AI applications such as real-time subtitle translation, although not yet fully accurate, are helping to further dismantle language and cultural barriers in global trade, he said.
This trend extends beyond cultural products to general consumer goods, with e-commerce platforms such as Amazon reporting sales growth linked to automatic translation, he added.
The team plans to examine the economic impact of AI-driven localization before and after such tools became widespread, Yang said.
The study, titled “The Tower of Babel: Localization, translation, and international trade,” was published in the European Economic Review.
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