Japan's YouTube alternative Niconico struggling after payment processors force adult content ban

Much of the recent focus has been on marketplaces like Steam banning games with adult content. Payment processors lobbied for the censorship, despite criticism that the titles obeyed their guidelines. Even as a video-sharing site, the Japanese Niconico demonstrates how defying credit card companies can hurt a service.

Although YouTube is accessible in Japan, many viewers prefer Niconico for its unique social features. Users can comment on videos, with their remarks appearing on the media during playback. As Automaton notes, most payment processors were unavailable on the site from May 2024 to February 2025. After blocking mature-themed content, the credit cards, including Visa returned. Unfortunately, the pause did significant financial damage to Niconico.

The Kadokawa-owned platform reports continued slow growth of premium memberships. As a result, overall revenue has noticeably declined. While it may recover, some viewers have already found alternatives with less censorship. Still, Niconico is hardly the only Japanese site to suffer the wrath of powerful payment gateways. Manga Library Z hosted out-of-print manga, but shut its doors after credit card companies objected to its content.

How Japanese bans compare to restrictions in other countries

Observers in Japan have noticed a growing movement toward rejecting risque content. Most worrying, Niconico, Manga Library Z, and other sites banned videos and images that did not break Japanese law.

Critics have shared similar frustrations with censorship on Steam and Itch.io. The Collective Shout organization claims to have influenced payment providers to block illegal games. However, opponents argue that not all the targeted titles show the abuse of women and girls. Mastercard denied complying with the activists, but it hasn’t convinced skeptics.

It’s unlikely that the profitable Steam will suffer a similar fate as some Japanese marketplaces. Nevertheless, it recently dropped PayPal in many countries over the company’s concerns about adult content. Gamers are increasingly finding it challenging to pay for even family-friendly purchases.