Why Xbox Failed in Japan - CNBC

Interesting video. They make it sound like Xbox's failure had more to do with Japanese developers not being interested in supporting the brand. Your thoughts, SW? Will Xbox ever get any love in Japan?

Read a while ago that they did not understand business, you cannot waltz into Japan thinking business is the same as the west. Also Japanese love Nintendo/Mobile gaming with PS as a secondary platform I guess.

Microsoft didn't try at all at the start of this generation. They had weaker and more expensive and bulky hardware and launched after Sony's PS4 and had no games targeting Japanese players. They sealed their fate and now everyone praises Microsoft when they manage to get a multiplatform game like Nier Automata and One Piece Burning Blood. They've improved from the start of this generation but they're still in a worse place this gen in Japan than they were with the 360 or OG Xbox.

It's not Japanese players being stuck up or racist, it's Microsoft continually failing to provide a compelling product to Japanese players. Why would they want an Xbox One? Hell, Xbox brand is having a hard time as it is competing in the West now. There's even a fanbase of Western games in Japan but now Microsoft have even betrayed the Japanese Halo fanbase by recasting the voice actors with Halo 4. If you like Western games you're just as well off if not better with a PS4. Some games don't even get an Xbox version in Japan.

I hate to say it but I don't expect Xbox Scarlett to do any better unless MS has what Japanese gamers want in a game. Why do you think both PS4 & Nintendo Switch sell? Because they have the games what Japanese wants. They don't want Gears of War or Halo.

How about why did it fail every place that wasn't the US, UK and Latin America? Japan was just especially harsh. They completely pulled that number of units out of their ass too. IDC is as reliable as VGChartz.

They have never had a chance in Japan. It doesn't matter how much money they spend there or how hard they try. Japan is extremely ethnocentric. They are up against 2 beloved domestic Japanese brands and they aren't a luxury good, iconic brand, or status/image product. No one gains market share in any sector in Japan against entrenched Japanese brands unless you are one of those 3 things.

I guess if they had tried this gen they may get better results since PS4 not even targetting japanese audience.

Why would anyone in Japan want to work with MS, after that crap move they pulled with Scalebound.

What crap did they exactly pull there deflection2k?

As a fan of Xbox One X, they ain't wrong. Japan isn't wanted over their but the Anime fans actually admire Xbox One games to say the least. At least MS gave the Anime fans some love.

The system just isn't suited to Japanese gaming. The exclusives are not the type of game the Japanese people embrace. And the design definitely isn't well suited.

@SUD123456: The ethnocentrism/nationalism/xenophobia argument holds no water. Plenty of American brands are loved in Japan, e.g. Apple, Disney, Hollywood, American musicians, etc. Even foreign PC games (mainly from Korea) have become a big deal there.

If a foreign product offers any desirable advantages over domestic brands, then the foreign product can become a hit. And that's the problem. Xbox doesn't offer any desirable advantages over the domestic competition. Or compared to PC.

@Jag85: I always thought a game like Ninja Gaiden Black was the high point MS ever had in Japan.

The claim that the Japanese are ethnocentric to being xenophobic show the cultural ignorance of those who make these claim. It is often those who know little about Japan or its culture who make these wild claims. It needs to stop.

It's Mr. DeflectionS2k!!

To be fair, saying they aren't is as bad as saying they are because you are denying a reality.

Japan is a relatively homogeneous society. I've visited many times and have had two family members live there; pretty much everyone in Japan is Japanese/Asian. The Japanese tend to be very warm and inviting to foreigners in my experience, but you will always be a foreigner to them, even if you live and work there for years. Always a gaijin. Always a guest. Always a visitor.

Had a white friend work for a Japanese company. It was their literal policy that a non-Japanese person could not become an officer of any kind in the business. There's a reason they call it the bamboo ceiling (as opposed to "glass ceiling", something that occurs in the West with women, minorities, etc). Pretty sure if such a policy existed in the US it'd be illegal. They paid him well and were courteous and appreciated him, but to see promotion after promotion denied to you because you're not Japanese is a bit demoralizing.

With all that said, I am sure there are a host of reasons MS failed in Japan with the Xbox, and this didn't play enough of a role to be an outright excuse. The Japanese tend to enjoy many aspects of Western brands and culture (Baseball in particular, for example) so it could be said that if they love one Western brand, they could love another brand.

I would sooner argue that Japan's corporate oligarchy probably made it tough for MS to get a foothold, but that's just speculation.

Not "pretty much everyone", but Japan is something like 98-99% Asian (out of which 97% is Japanese). The country has a strict immigration policy compared to most Western countries. It's slowly starting to loosen its immigration rules, but it's still decades behind most Western countries in that regard.

It's worth keeping in mind that Japan has the highest ageing population ratio in the world. The old people there significantly outnumber the young by a wide margin. As a general rule in most societies, the old tend to be more conservative and nationalistic, while the young tend to be more liberal and globalistic. This is somewhat true for Japan as well, except that the old heavily outnumber the young, which leads to the older conservative/nationalistic population dominating Japanese politics and businesses.

Either way, this has no bearing on the success or failure of foreign products in Japan. Over there, there are a ton of "Westaboos" obsessed with anything and everything from the West. There are more "Westaboos" in Japan than there are "Weaboos" in America. Plenty of foreign brands do very well in Japan. Blaming the Xbox's failure in Japan on "Japanese xenophobia" is a terrible excuse.

But maybe the Japanese corporate structure could have something to do with it. Xbox has always struggled with getting support from Japanese devs. It's always hard for a newcomer to compete against the established brands.

Ironically, the most successful Microsoft gaming system in Japan was the MSX computer (designed by Microsoft Japan, and best known to Western audiences as the system that launched Metal Gear). That sold over 5 million units in Japan, dwarfing the three Xbox consoles combined. That was a lost opportunity for Microsoft, as they could've capitalized on Japanese nostalgia for the MSX when they launched the Xbox. Yet Microsoft made no reference at all to the MSX, almost like it didn't exist for them. That just shows how out-of-touch Microsoft is with Japan.

True. I still think Ninja Gaiden Black on the Xbox is the greatest 3D hack & slash action game (whatever the genre is called). The OG Xbox was an underrated console.

Apple, Disney, Hollywood, music are all examples of the exceptions I noted. As are certain luxury sports cars, coca cola, Gucci bags, etc. etc. Please actually take the time to read and understand my post.

There is nothing that Xbox can do to fundamentally change things since it is a basic box with the same functionality of the other two boxes. And it is never going to have significant software that appeals to the Japanese domestic market that isn't available on the other two and the same for western made games.

So it isn't an iconic thing, it isn't a fashion/status thing, it isn't a luxury good....please pay attention....those things can do ok in Japan. Xbox is none of them so there is no material reason for anyone to buy one. And if you had actually spent any significant time in Japan or attempted to market your products there you would understand this.

And this doesn't mean there is anything wrong with Japan. They are a pretty closed society and they are proud of their companies and products, so they will buy domestic unless there is a material reason not to do so...which isn't the case for gaming consoles.

They failed because they hardly know what they're doing on their own home turf, let alone Japan. MS has become the freakin' laughingstock of the video game world.

My point is that ethnocentrism/nationalism/xenophobia has no bearing on what products sell well in a country. Take China, for example. It is arguably the most ethnocentric/nationalistic/xenophobic country on the planet, yet numerous foreign products do very well there. And they're arguably the most open-minded major movie market, where not only Chinese and Hollywood movies do well, but even movies from Japan (a country despised by most Chinese), Bollywood, Europe, Southeast Asia and the Middle East have become blockbusters in China. In contrast, most American moviegoers are relatively xenophobic and reject foreign-language movies outright.

Regardless of what country you do business in, what matters is that you sell a product that would appeal to the local audiences. And if you can do that, most of the local audiences ultimately won't care about where the products originate from. From the US and UK to China and Japan, the same business principles apply. This requires doing market research and understanding what appeals to the local market.

However, what can impact the performance of foreign products in a market is economic protectionism (a.k.a. economic nationalism), which is employed by a lot of governments to limit foreign competition, including a capitalist country like America. Back in the '70s and '80s, the US frequently employed protectionism, putting heavy duties and tariffs on Japanese goods in order to protect the local US industries. And then when the Japanese economy crashed in the '90s, Japan did the same thing to foreign goods in order to protect the local Japanese industries.

I think it might've gone better for them if they had tried. They barely tried to sell consoles in the west, let alone Japan.

The only push I have seen was the jrpg push in the 360 era. Even then it was never sustained enough to get anywhere and ultimately they have given up.

@davillain-: You can’t just mimic your competition and expect to come out on top, you have to differentiate yourself and Xbox was poised to do that. Japan has always had a nationalist attitude with their spending power. Especially in the tech/gaming arenas. It’s actually what they pride themselves on. I don’t know if it’s political correctness or just a bad marketing team, but MS has done a lousy job in Japan with their console as a result...obviously. Finding local talent must be a chore too because Japan is in no way in an employment crunch. Hell, their employees are probably sabotaging them from the inside due to their nationalistic pride.

@subspecies: I think the makers of Google Stadia want a quiet word in your ear.....

That's really it above all else. Sony and Nintendo are gods out that way and one doesn't just waltz in and take over the game.

Coolyfett watched this on the way to work this morning. Why were they saying the Xbox One was successful? Microsoft needs to leave Japan alone. There seems to be a lot of xenophobia towards Xbox based on this video. It seems Microsoft attempted to pull a Sony, like what Sony did with Nintendo back in 1988. Coolyfett is not a huge fan of Xbox but go for NA & Europe where the Xenophobia is not as strong. Is Japan this way when it comes to Apple vs Samsung phones?

People are just going off of this news report right?

Depends on Microsoft's motivation. Xbox seems to be where people go to play FPS games something that seems to have started on PC during Generation 5. Xbox seems to only do certain genres: FPS, Racers, 2D fighters, 3PS & 3rd person open world. Where are the platformers, puzzle games, RPGs?

Japanese smartphone market (2018)

1. Apple - 56.8%
2. Sharp - 9.8%
3. Sony - 8.6%
4. Samsung - 6.8%
5. Kyocera - 6.2%

Now compare that to the global smartphone market:

Samsung Beats Apple In The Global Smartphone Market As Chinese Brands Close In (2018)

Android v iOS market share 2019

Japan is one of the world's few countries (along with the US, Canada, UK, Norway, Iceland, Saudi Arabia, Australia, and NZ) where Apple is dominating. In almost every other country on the planet, it's Android (mostly Samsung and other Asian phones) that is dominating.

In other words, Japan is one of the most American-friendly markets on the planet. Which debunks the "xenophobia" argument that Xbox fans often use to excuse the Xbox's failure in Japan.

It's failing elsewhere compared to Switch and PS4. Game library for XBX1 was a failure

That would've helped somewhat. A big problem with the OG Xbox was its bulky size. They had the right idea with the smaller Controller S, which they introduced for the Japanese market instead of the bulky Duke controller for the rest of the world (before the Controller S replaced the Duke everywhere else). However, the console itself was still large, heavy, and bulky, which is a no-no for smaller Japanese homes. But it was bulky mainly because of the hard drive. If they got rid of the HDD, then that would've helped with the size and form factor.

However, even if the console was more compact, there's another issue that Xbox would've still run into: Japanese dev support. Most Japanese devs had console-exclusive contracts with Sony (and a handful with Nintendo), which made it a struggle for Microsoft to get support from Japanese devs.

In some ways, the Xbox's struggles in Japan are comparable to Sega's struggles in the Japanese console market back in the 8-bit and 16-bit eras, when Sega consoles flopped in Japan. This was largely due to most of the big Japanese devs having console-exclusive contracts with Nintendo. So Sega had to rely on its own first-party software, smaller Japanese devs, and Western devs. As a result, Sega got a lot of success overseas, initially in Europe and then the Americas, but struggled in Japan. It wasn't until the Saturn that Sega got its first (and only) hit console in Japan.

Xbone failed everywhere man, better luck next gen.

Well Said. Good to read.

@Jag85 said:

Japanese smartphone market (2018)

1. Apple - 56.8%
2. Sharp - 9.8%
3. Sony - 8.6%
4. Samsung - 6.8%
5. Kyocera - 6.2%

Now compare that to the global smartphone market:

Samsung Beats Apple In The Global Smartphone Market As Chinese Brands Close In (2018)

Android v iOS market share 2019

Japan is one of the world's few countries (along with the US, Canada, UK, Norway, Iceland, Saudi Arabia, Australia, and NZ) where Apple is dominating. In almost every other country on the planet, it's Android (mostly Samsung and other Asian phones) that is dominating.

In other words, Japan is one of the most American-friendly markets on the planet. Which debunks the "xenophobia" argument that Xbox fans often use to excuse the Xbox's failure in Japan.

I think it's due to the games on Xbox is not what Japan likes.

I don't think it's a matter of xenophobia, Japan has its share of fanboy who will buy anything "Western," they pretty much worship brands like Gucci, Apple and Hugo Boss.

Why they are not buying Xbox is the same reason they not buying Xbox in Czechoslavakia or anywhere else, it's just not perceived to be good enough value, not enough exclusives and PS4 is simply too good of a product to make much headway.

I'm saying this as a person who actually likes Xbox and their stuff, but I can see why it's not as attractive to some people, Playstation is a really strong brand with a really strong product.

MS had their chance and it all came down to Gates giving them a reason to ally with a western tech company and he blew it. To be frank, they didn’t grasp the significance of shirking Nintendo/Sony in the eyes of those developers. It was about way more than making money.

Damn, Xbox One being a failure is now making the news in mainstream media.

I guess the gamer's that called it a failure were never delusional after all.

MS shot themselves in the foot for going into a new gen with next to no 1st party studios. Buying exclusives for a year is not the way to build a library.