An Academia Sinica study of the gaming platform Steam found that video games translated into the local language saw up to a 12.1 percent increase in sales revenue in the local market, marking the first study to provide concrete data on how translation benefits international trade.
Translating products reduces cultural barriers and makes them more accessible to local consumers, but industries have long struggled to quantify the benefits of translation to international trade.
A team led by Academia Sinica Institute of Economic researcher Yang Tsung-han (楊宗翰) and Japanese researcher Yuta Watabe analyzed sales of more than 10,000 games in 2018 to more than 70 countries on Steam, which accounts for 70 percent of global game releases.
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They found that games translated into local languages generated at least 10 percent higher sales revenue in those markets, showing the benefits of product localization.
Yang said that his team chose not to use books as their subject, as different versions of books in different languages compete with each other on bookstore platforms.
Video games, on the other hand, only have one version and players can freely choose different languages in the game settings, Yang said.
In addition, video game sales have surpassed film, music and sports, and they can be instantly purchased across borders online, he said.
Game translations and subtitles also directly affect player experience, making the game easier to learn and understand, he added.
Yang said that games with more language options are typically released by bigger companies, as translating a game into multiple languages requires greater financial investment.
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 ChatGPT and other artificial intelligent (AI) translation tools rose to prominence, Yang said.
The team’s model suggests that AI tools such as real-time subtitle translation, although not yet fully accurate, are further breaking down language and cultural barriers in global trade, Yang said.
This trend extends beyond cultural products to general consumer goods, with platforms such as Amazon seeing sales growth tied to automatic translation, he said.
The team now plans to study the economic impact of AI-driven localization before and after these tools became widespread, he added.
The study was published in the European Economic Review.
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