Microsoft has from its beginnings tried to conquer the Japanese public and market. A relationship for the less tumultuous where Microsoft has not always been seen to be the same. At the dawn of the launch of their new generation console entitled: Xbox Series X, we propose to return to the Japanese context of Microsoft and its Xbox brand. What about it? And why has the firm never been able to meet the expectations of Japan?
In the early 2000s, Japanese developers were considered the best in the world and accounted for a large share of the market. Microsoft’s arrival in the minefield was frowned upon by the mother country of the three manufacturers: Sega, Sony and Nintendo.
When Microsoft decided to enter the video game market in 1999, the company was labeled PC computer developers. Their ambition was to bring the product into the home of consumers like Sony with its PlayStation 2 that Microsoft considered a threat likely to replace the computer due to its internet functionality. Bill Gates had tried a partnership with Sony so that the technology of his group was integrated into the PlayStation 2, obviously, Sony refused the partnership and Microsoft decided to manage on its own.
The Xbox and the origins of a Japanese adventure
On March 30, 2001, Bill Gates’ much awaited speech took place at the Tokyo Game Show. The Makuhari Exhibition Hall had a total of 4000 spectators. The executives of all the major Japanese game publishers were gathered: Capcom, Square, Tecmo, Sega, Namco, etc. The press from around the world gathered to discover the Holy Grail: the Xbox.
Gates’ presence at the Tokyo Game Show was to show the Japanese gaming industry that Microsoft had a new mission: conquer the world of consoles. Gates, one of the most influential businessmen, understood that Japan should be there.
Gates spoke eloquently about the importance of the Japanese gaming industry, praising Isao Okawa, the former president of Sega, who died of cancer two weeks before the show. Okawa was a “great man who has accomplished a lot,” said Gates. The audience listened attentively and respectfully to the words of the businessman, but when Gates started talking about the Xbox, his speech turned into a sales pitch.
Gates announced that Sega will design eleven games for the platform, including Panzer Dragoon Orta, Jet Set Radio Future, Sefa GT 2002 and Gun Valkyrie. He alluded to the “Xbox S” controller, a slightly smaller version of the vilified controller that would accompany American and European launch consoles, with the buttons positioned to best suit Japanese playing styles. He lifted the veil on the Xbox Japan division, led at the time by former game development chief Sony Toshiyuki Miyata, responsible for creating Japanese games for Xbox, attracting Japanese players and signing games made by Japanese publishers.
The machine would install PC technology in salons to facilitate programming, hence its original name: DirectX-Box. The console delivered with a hard drive would connect to the Internet, avant-garde additions that will appeal to Western developers.
Unfortunately, in Japan, PC games did not attract more than that. At the time, Konami, Namco and Capcom were just console developers. In addition to that, Microsoft was facing a perception problem. Most Japanese publishers also believed that the Xbox was a console for American games that Japanese players would not find.
“So even before lifting a finger, game makers and consumers felt like it was a console designed for other countries, and even if it was available in Japan, it didn’t was really not for them ” – Kevin Bachus – co-creator of Xbox
Some of the decisions made during the design of the Xbox have caused members of the Japanese gaming community to retreat.
The Xbox was a monster, heavy, bulky and devoid of aesthetic subtlety. It was made of black plastic with a handle apparently designed for giant hands. The Japanese had a very caricatured vision of what an American-made game console could offer.
In addition, sales of the Xbox in the land of the rising sun were not convincing for developers to take more interest. Indeed, the first Xbox of the name makes only one sale 450,000 copies at the end of its marketing in 2011.
In conclusion, without being a commercial failure, the Xbox did not sell particularly well in the world (especially in Japan) and struggled to exceed sales of the Nintendo GameCube.
By comparison, the PlayStation 2 was the best-selling console of all time with 155 million units sold. Xbox sales were particularly poor in Japan.
Xbox 360 and its attempt to seduce
We are now in 2005, with the arrival of their latest generation console: the Xbox 360, Microsoft wants to be resolutely competitive to stand out and close the sales gap for its machine against the Japanese giants Nintendo and Sony. Microsoft’s first move was to sign an exclusive deal with former Final Fantasy producer Hironobu Sakaguchi, who is now creating his own studio.
In an interview with IGN in 2005, Peter Moore, vice president of Microsoft Entertainment at the time said:
“Japan is the cradle of the gaming industry and the home of very creative and innovative minds, and it’s vital to see the Xbox as a viable competitor in this area. The Japanese market is a very high priority for us, both for first-party developers and third-party developers and publishers. It is a priority for me over the next 12 to 18 months to ensure that Japanese developers are our partners. Microsoft is taking very serious steps that will have global repercussions for a long time; it is an investment that will pay off in the future and will be a set of games for our next generation system. “
At the Tokyo Game Show later that year, Microsoft formalized the console’s release date. When the Xbox 360 was launched in Japan on December 10, 2005, it was closely followed by Dead or Alive 4, which was aimed primarily at Japanese audiences. Other exclusives followed, including Blue Dragon, Tales of Vesperia, Star Ocean: The Last Hope and The Last Remnant. Square Enix even rocked the gaming industry, revealing that Final Fantasy XIII would also hit Xbox 360, a major blow to Microsoft.
Despite the efforts made, nor did their console stand out from the competition. Indeed, although the announcement of titles such as Blue Dragon aroused the enthusiasm of crowds at TGS 2006, this high interest was not manifested in sales. During the 2007 holiday season, the Xbox 360 was the only console to see sales decline in Japan.
Its most notable success was probably Tales of Vesperia, which saw console sales temporarily increase in Japan in 2008. But even hits like Vesperia only increased sales by a few thousand units.
It wasn’t just Microsoft, home console sales were declining in Japan. Players in the land of the rising sun showed little interest in new generation features such as on-line and high definition graphics. Players were rushing more towards the Nintendo DS and the PSP. The Wii dominated the market and the PlayStation 2 still found its audience in 2009.
Ultimately, the Japanese market will not turn out to be the goose that lays the golden eggs for the giant Microsoft. Four years after Peter Moore’s announcement of the importance of the Nippon market, Mega Man designer Keiji Inafune declared that the Japanese game industry as we know it has come to an end. Japan’s unreserved adherence to mobile games continued to depress sales of traditional games. Even today, few games outside of industry standards like Monster Hunter, Final Fantasy, Dragon Quest sell for more than a few hundred thousand units in Japan.
Japanese developers will experience success in other countries. As for Microsoft, while the Xbox 360 was by far its greatest success, the latter really did not achieve the expected success in Japan.
The Xbox One failure in Japan
Since the release of Xbox One, Microsoft has not received any Japanese exclusivity, ScaleBound could surely have changed the game but was finally canceled in 2017. The console is a commercial failure in Japan.
Takashi Sensui CEO of the Xbox Japan Division from 2006 to 2014 resigned following the commercial rout of the Xbox One in Japan, only 23,562 units sold in the first 4 days of its release.
Yoshinami Takahashi took up the torch, the man worked from 1987 to 2012 at Sony, occupying numerous positions in the European, American and Eurasian subdivisions.
Unlike the figures for Nintendo Switch and PlayStation 4 which exceed one million sales, those of Xbox One are indeed very meager compared and represent only 0.3% of console sales.
The arrival of the Xbox One X was very perilous, some Japanese dealers displayed a stock shortage the same day as the release of the machine. Indeed, the main distributors had not planned to sell the consoles in stores on the launch day and sales were reduced to pre-orders.
The weight of Japanese games in the West
Japanese games are not to be outdone and are selling well in the United States, one of the most popular MMORPGs today is Final Fantasy XIV. Recall that the MMORPG market was mainly dominated by American giants such as Blizzard with World of Warcraft, which now faces a Japanese competitor.
While Japanese RPGs suffered during the previous generation to renew themselves and find their audience of yesteryear, games such as Persona 5, Kingdom Hearts III, Dragon Quest XI: The Fighters of Destiny or even Fire Emblem: Three Houses who won the “player’s voice” prize at the Game Awards 2019, were able to win.
To not only talk about J-RPG, we also salute Capcom’s performance with Monster Hunter: World which allowed the series to find its audience outside Japan. With a total of 14 million copies shipped worldwide since its launch in 2018. Monster Hunter is now the best-selling license in Capcom history.
Platinum Games also made a splash with NieR Automata and a total of 4 million units sold after a late arrival on Xbox One.
Nintendo exclusives such as Super Smash Bros. Ultimate, The Legend of Zelda: Breath of the Wild or even Mario Kart 8 Deluxe, for their part, perform more than exemplary in terms of sales and those all over the world.
It is clear that it is mainly the big names that make the big numbers and that “niche” games such as Ys: Memories of Celceta or the Atelier series to name a few do not make much noise and have struggling to make their way to the western market. Toshihiro Kondo, president of Nehon Falcom Corporation had also expressed himself on this subject vis-à-vis the situation of the Xbox One in Japan: “Falcom is a developer who focuses on the Japanese market and considering that the Xbox One is having a hard time in Japan, the market is not there. We need to see if things get better and if it is, I will be happy to bring more games to the console and to the West. “
The Xbox ecosystem and its impact in the future
The company is now focusing on its multimedia services, with the Game Pass, the Xbox Live or the XCloud arriving this year. With Japan having good network coverage, Microsoft seems to be betting on its Gamepass and XCloud to resurface.
Indeed, last year, the firm revealed that Square Enix would launch 10 Final Fantasy games on the Game Pass. This includes games like Final Fantasy XIII, XV, VII and many more. In addition, Sega adds to the catalog a long time series exclusive to PlayStation: Yakuza with three games including Yakuza Zero: The Place of Oath, Yakuza Kiwami and Yakuza Kiwami 2.
The subscription service could be more lucrative in the long run. Indeed, with a vast catalog of games from all over the world, the firm could meet the expectations of the Japanese public and therefore better establish itself..
Phil Spencer’s vision for the future of the brand and the Japanese market
Although Microsoft seems to be neglecting the Japanese market more and more, this does not reflect the recent words of Phil Spencer, director of the brand, who seems to want to erase the failures of the recent studio acquisitions and the Xbox Series X: Because diversity matters in all genres “as well in video as in music, there is not a song, a film that everyone loves. With the Gamepass, we think of millions of different players and the different types of games they will play. This diversity is really important. “
He keeps on:
“I think it would be nice if we find an Asian studio, especially a Japanese studio, to add (to Xbox Game studios). I liked the days when we had the capacity to produce first-party games in Japan. We have a small team there, but I think we can do more. That said, through our trips to Japan, I enjoyed the return of Phantasy Star to our stage with Sega – I thought it was fantastic. Miyazaki-San, before with Dark Souls and now with Elden Ring on our stage … Japanese creators are more and more present. “- Phil Spencer at GameIndustry.biz
All things considered, is it therefore conceivable that Microsoft may one day fully gain favor with the Japanese market? It seems that with the XCloud project and the impressive Game Pass portfolio this is not an impossible task. They could probably reach a new target: the mobile market. For several years Japanese players have been engaging in this market at the expense of home consoles, you just have to see the sales of the Nintendo Switch in Japan to be convinced. Even if the success of the Xbox Series X is not assured in the land of the rising sun, Microsoft now has new tools that can encourage their implementation. Will they be beneficial? Only the future will tell us.
Phil Spencer: “The Japanese market is important for Xbox”