The Troubled Path for Xbox in Japan

Joey Marrazzo

Xbox is a notorious brand known around the world. The brand demonstrates its notoriety when it comes to its hardware such as the Xbox 360, Xbox One, Xbox Series X, or its iconic franchises like Halo, Gears of War, and Forza.Despite Xbox’s impressive accomplishments, the brand has struggled to succeed in one country – Japan.

Past

Since Microsoft is an American company, it is hard to establish a reputation in a country dominated by giants in the video game industry such as Sony, Nintendo, and Sega.

Xbox has always been in those titan’s shadows in the country of Japan. This was one situation that Phil Spencer wanted to reverse when he became the Head of Xbox in 2014.

The first Xbox console attempted to make a name for itself in Japan by luring Japanese game developers to its console. The console was able to secure games in the Jet Set Radio, Ninja Gaiden, and the Dead or Alive series, but Xbox stopped pushing to become the favorite console in the following years.

During the Xbox 360 era, the console was released with limited Japanese developed games. The 360 instead featured several open-world RPGs from western developers such as Bethesda and Bioware, slowing the interest from the players from Japan.

The Xbox One era didn’t make a dent in the console’s profile in the country either, with it launching 10 months after its original launch in North America and other countries. This led players to migrate to the competing PlayStation 4 which helped Sony boost its sales and have the PS4 become a bestseller compared to the Xbox One.

Phil Spencer made it known early in his tenure as Head of Xbox that the market in Japan is one that he wants to change dramatically.

His goal is to make Xbox a well-known brand and be the console of choice in Japan.

Part of his plan to make a dent in the Japanese market is by securing deals with notable Japanese developers.

One of the earlier instances of this strategy was with PlatinumGames.

Xbox and PlatinumGames partnered to create Scalebound, an incredible Japanese RPG set in a fantasy world. Xbox would go on to cancel the title due to the companies fear that it wouldn’t live up to player expectations.

Compared to the PlayStation 4 towards the end of its lifecycle, the Xbox One having a delayed release really impacted their chances of having a significant market push in Japan.

According to Director of Xbox Asia, Jeremy Hinton, the Xbox One failed to make an impact at launch due to the Xbox One launching as, “a Western TV gaming box full of Madden and Call of Duty at the time, and Western TV shows.”

Hinton went on to say that the lack of third-party support, no localization in its first-party games, and the higher price point, when compared to the PlayStation 4, were other major factors that limited their impact.

Present

Phil Spencer knew that he would have a clean slate in Japan starting with the Xbox Series X, the first console to launch under his leadership.Starting with the Series X and Series S consoles, it was easier than ever to enter the Xbox ecosystem. The Series S is a perfect complementary console to other competing consoles due to its lower price point. When paired with a Game Pass subscription, this duo is the perfect entry into Xbox for any player.One significant move that team Xbox accomplished was making its presence known at the Tokyo Game Show. Their presence at TGS solidified Xbox’s commitment to the Japanese gaming audience and proved they are serious about having an Xbox console in as many Japanese households as possible.To make sure they start on the right foot compared to the Xbox One launch, the Series X and Series S consoles launched simultaneously around the world. One interesting fact about the Series S is that the console changed the price just a few weeks before its launch in Japan. The Series S was originally priced in Japan at 32,980 yen, which is equivalent to $311, but after hearing feedback from the community, they lowered the price to 29,980 yen ($284) to make it clear that Xbox is serious this time around. One significant feature that has excited many gamers has been Xbox’s backward compatibility program, and the program’s ability to upscale older titles to make them look as if they came out recently.Titles such as Panzer Dragoon Orta from the original Xbox, Final Fantasy 13, and Phantasy Star Online 2 have all looked incredible on the Xbox consoles, making them the best place to play those games.One other avenue that Xbox excels at and is a significant market in Japan is mobile gaming. Mobile games found in your favorite smartphone app store have a huge audience due to their ability to be reached by any owner of an iPhone, Android, or other phone brands.Xbox doesn’t have any mobile titles to support themselves in the app stores, but with the creation of xCloud, those very people on the smartphones can now play console-quality games. To play those games, the players must first have a Game Pass Ultimate subscription.The subscription is the gateway into the Xbox ecosystem and Microsoft hopes that it will influence players to possibly purchase an Xbox console down the line.The age of physical media in Japan is dying, not only due to the digital takeover of the past several years but also the price of the media in general. Subscription services like Netflix are a huge hit in Japan. Game Pass has proved to be an incredible success in North America, but to succeed in Japan, they need to include games that intrigue the gaming community.For a while, there have been rumors of Xbox acquiring a Japanese developer to help spread the Xbox brand in Japan. Through the Bethesda sale, Xbox acquired Tango Gameworks, which is a Tokyo-based studio that develops The Evil Within franchise as well as the upcoming GhostWire: Tokyo. This acquisition may not have the immediate impact as a Sega or Koei Tecmo sale might have, but it is a sign that Xbox means business about adding Japanese-based studios to its ongoing Xbox Game Studios library.

Effect

The Xbox Series X and Series S are off to a great start compared to the Xbox One launch, according to Jeremy Hinton.Xbox Series S paired with the Game Pass service have been well received by the Japanese gaming community and Japan is now the fastest-growing market for Xbox.Xbox is planning on fixing its mistakes from previous generations such as the lack of localization for its first-party titles.Even if a game is unable to have voice localization by launch, there will be an inclusion of subtitles for the games, with voice being released post-launch.Sea of Thieves is one of those examples.Since the title received localization in February the number of players in Sea of Thieves increased significantly. Hinton states that the game will continue to grow in popularity due to the Pirates of the Caribbean DLC which was recently released. As Xbox continues to grow in popularity through Game Pass and localization of its first-party games, they will soon be able to make up for their previous mistakes and will be closer to Xbox being a more popular brand in Japan.