Late to the Game, Japan Takes to E-Books

Their language posed certain technical challenges

The Japanese are avid readers; the country's publishing industry generated $22.5 billion in revenue last year, according to the Japan Book Publishers Association. A decade ago, long before the Kindle revolutionized the publishing world in the U.S., Japanese authors were writing novels using text messaging and readers were catching up on their favorite novels and manga comics on their mobile phones.

But when it comes to e-readers, the industry has gone nowhere. Although Sony (SNE), Panasonic, and Toshiba offer e-readers for local consumers, sales have been disappointing. Foreign companies have stayed away, in part because their software had difficulty handling Japanese characters, as well as text reading vertically rather than horizontally. Estimates for the total number of nonmanga e-books in the market vary, but attorney Yoshiyuki Miyashita, a partner at Tokyo law firm Nishimura & Asahi who advises clients on publishing issues, says there are only about 100,000 titles. For the world's third-largest economy, that figure is tiny: Amazon.com (AMZN) alone has more than 1.4 million Kindle eBooks available on its U.S. website.