Microsoft’s Japanese Xbox branch is in trouble. To be fair, it has been in trouble for quite a while, but now it seems to be a little more serious about it.
We’re now three weeks from launch of the Xbox One in the archipelago of the rising sun, and after a meager debut with 25,674 units sold in its first week, it sharply dropped to 3,015 after seven more days. Today’s Media Create report is nothing short of tragic, with only 1,314 units moved in a week.
Basically, the Xbox One has already collapsed to levels similar to the Xbox 360 prior to the outset of the new generation in Japan, but it took only three weeks to get there. While I always make an effort to see the bright side of any situation, there isn’t one here. It’s a Waterloo.
Home consoles aren’t exactly doing hotly in general in Japan, with the PS4 pushing almost 9,000 units this week and the Wii U following suit with just south of 8,400, but weekly sales under 1,500 after less than a month and in the week of Tokyo Game Show are a signal that cannot be ignored.
I’m sure some will pull out the old excuse that Japanese gamers hate Xbox consoles because they’re not sold by a Japanese company, and that’s quite possibly a factor for some, but it would be naive to ignore the fact that many other American products are extremely successful and popular in Japan.
The iPhone is a good example, but the history of marketing in Japan is full of western products whose manufacturers managed to position as “cool” among the local customers, who, ever sensitive to trends, proceeded to buy them en-masse.
Microsoft tried to do that with big launch events and shows in the previous months, but those just didn’t click with the general public. The Xbox One positioned itself in the market pretty much like its predecessors, as a niche console for the ultra-hardcore who like western games.
While walking around Akihabara last week, the only places in which I saw the Xbox One getting any degree of attention from customers were small independent stores that are exactly the favored dwelling of the kind of customer I just described.
Don’t get me wrong, a product successful between a ultra-hardcore niche isn’t a bad thing per-se, but with its prominent entertainment features (which were pushed in Japan even more than in the west), the Xbox One isn’t designed for that, and this may have pushed it even harder towards this initial debacle.
Another factor is definitely the games line-up, which pretty much caters to gamers who like western games, with only one Japanese game at launch. Microsoft is talking a lot about local games, but in terms of exclusives we have very little on the plate, and of that, very little has been shown at all.
Tokyo Game Show is a perfect example of this: visiting Microsoft’s booth was a baffling experience for me. There were a lot of western games on show, but the Japanese presence was nearly non-existent. The only exclusives were Dark Dreams Don’t Die and Psycho-Pass: Happiness without Choice, and Microsoft did its very best to keep them hidden in a corner of the booth, with Psycho-Pass further hindered by a strict filming prohibition that prevented journalists from showing it off to their readers.
Phantom Dust was nowhere to be seen, not even mentioned in passing, while what’s probably the most interesting Japanese exclusive, Scalebound by Platinum Games, wasn’t at the booth and didn’t even get as much as a teaser trailer. To top its fairly weird absence, only an extremely limited number of behind-closed-doors meetings about it were available to the press, and only for one day. The fact that quite a lot of the answers you read in the resulting interviews are basically “no comment” or “I can’t tell you yet” surely doesn’t help.
Basically, for whatever reason (I don’t doubt that developer decisions weighed a lot on this, and possibly some of those were out of Microsoft’s hands altogether), Microsoft is keeping its hand very close to its chest in Japan, and while that might be good when you’re on top, it really doesn’t have any beneficial effect when you’re facing an uphill battle.
Some of the titles themselves don’t exactly help in pulling the console away from the “super-hardcore niche.” 5pb. and Makoto Asada are pretty much the staunchest supporters of Xbox One in the archipelago of the rising sun, but their titles cater to a rather small visual novel-loving niche themselves. Even Psycho-Pass, which has the potential to gather some sort of mass appeal due to the anime series, is still nowhere close to a Sword Art Online, due to its themes that aren’t exactly your usual otaku fodder. Again, this isn’t a bad thing per-se, but it isn’t conducive to massive commercial success.
Of course describing the problem is easy, but finding a solution to it is the real challenge.
Some would just say that Microsoft should abandon Japan, but that’s not something a company like Redmond’s giant can afford. Not only Japan is still a rather relevant market, but it also produces some very popular series, and a lack of local presence would push Japanese developers to just release their games as PlayStation or Nintendo exclusives.
Pulling out of Japan would also cause severe damage to the public image of the brand worldwide, and that’s not something a publicly traded company takes lightly. Basically, if you expect to see a strategic withdrawal of Xbox from Japan any time soon, expect no more, as it’s not going to happen. It’s not even a matter of being stubborn. There are cogent practical and commercial reasons that keep Microsoft anchored there, no matter how little the Xbox One will sell.
But what can they do to improve the situation?
First of all, do away with all the secrecy. Maybe announcing Phantom Dust and Scalebound later, instead of “burning” their cards at E3 would have been advisable, but now the cat is out of the bag, and the position of the console in Japan would benefit from letting those on the fence see something about those games beyond a couple of CGI teasers.
Secondly, Japanese games need to come to the console with higher frequency and sporting bigger and more popular IP. Psycho-Pass is nice, but it simply isn’t popular enough to have a lasting effect. If Microsoft is serious about putting a foothold in Japan, then they need to grab some big anime IP and put their developers (whether their internal ones or a “friendly” studio like 5pb.) at work on them. And no, not on visual novels.
Purchasing or forming a relevant first party studio in Japan would also be beneficial (and not just to the local situation). A while ago Phil Spencer denied the existence of the rumored Microsoft Game Studios Osaka, and that’s a pity, because that’s exactly what they’d need now.
A Japanese first party studio backed with AAA resources and marketing would not benefit just Microsoft itself, but also the Japanese game industry as a whole, because it would bring an intake of know-how and tech which local developers could definitely use nowadays.
A studio like that could either be provided with a successful existing IP (and there are many available in the Anime field), or be put at work on a new one especially designed to fit the taste of the Japanese audience. Microsoft shouldn’t be afraid to work in that direction. There are definitely enough lovers of Japanese games all over the world to create a big enough audience for that kind of game even on a worldwide stage, provided that it’s marketed and promoted in the right way.
Mind you, before someone mentions Shenmue, that’s not what I’m talking about. It’s definitely a beloved IP between the hardcore (and I would love to see a new Shenmue come, personally), but it never had mass appeal, and both games of the series didn’t exactly cause a frenzy when they were released in Japan. An exclusive Shenmue would actually position the Xbox One even more solidly as a niche hardcore console on the local stage. What the console needs is something fresher and able to capture a much wider audience.
Of course Microsoft could also ignore the problem and eat the losses, trudging through this generation with three-digit weekly sales numbers like it did towards the end of the Xbox 360’s lifespan. Yet, that would be extremely depressing, and it definitely wouldn’t be beneficial for competition and development on a local level.
One thing is for sure: this is a wake-up call. The house of Xbox can either decide to keep slumbering or to finally pull its considerable weight. Whether it will or not, only future will tell, but I certainly hope so.