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The sixth console generation was an interesting time in the video game industry.
Among other things, it marked the end of the bit wars, the rise of online gaming, and the
fall of SEGA from the console market.
But in SEGA’s place rose Microsoft with their own Xbox.
While the behemoth of a console was unable to shake the PS2’s firm hold on the market,
it still managed to edge out Nintendo’s GameCube with over 24 million units sold worldwide.
While this victory secured Microsoft’s place as a major player in the console gaming market
in the west, the same couldn’t be said for Japan as, despite the company’s efforts,
the Xbox barely managed to sell an estimated 450,000 units in the region throughout its
In fact, on July 18th, 2004 it was reported that even the PlayStation 1, which had been
out for almost a decade by that point, outsold the Xbox in Japan too.
It’s important to note that Microsoft faced an uphill battle from the very beginning.
After all, Japanese companies had a very firm hold on the video game console market ever
since the aftermath of the video game crash of 1983.
Furthermore, Japan alone represented nearly a third of the market.
So, from the early days developing the system, the Xbox team kept Japan close in mind.
Then Xbox Director of Third Party Relations, Kevin Bachus, recalled, “We were basically
going to play in Sony, Sega and Nintendo's home stadium.
As a result, then Program Manager for Entertainment Graphics, Seamus Blackley and I and other
people from the team put a disproportionate amount of effort into trying to make Xbox
attractive in Japan, but there were a bunch of things that were lined up against us.”
The feedback the Xbox team received from Japan continually proved to be troublesome.
For example, the console’s final design was seen as bulky and inelegant in Japan.
Bachus stated, “We thought [the Xbox] would be more like what PlayStation 3 looks like
now, something sleek and sexy.
For a number of reasons, mostly related to cost, but also partly related to thermodynamics
of engineering the box - air flow and the size of components - we just weren't able
to do that.
The Japanese looked at that and it reinforced the notion [the Xbox] didn't have a Japanese
Other feedback the team received only served to baffle the crew.
Ed Fries, the then vice president of Microsoft Game Studios, said, “We were told we couldn’t
call it the Xbox because X is the letter of death.
We were told we couldn’t make it black because black is the color of death.
I was like, isn’t the PlayStation black?
Rules that apply to you as an outsider don’t necessarily apply to insider products.”
The heaviest criticism was levied against the Xbox’s massive “Duke” controller
While Microsoft’s domestic focus testing claimed that testers loved the controller’s
size, it was loathed by Japanese testers and even the staff of Microsoft of Japan.
The Duke’s lead designer recalled Microsoft’s Japanese branch threatening to ward off Japanese
developers from making games for the Xbox entirely unless the controller’s design
was seriously revised.
To quote, “They were telling us, ‘We have no choice.
We have to tell developers that this is no good.’”
She traveled to Japan to oversee Japanese testers herself in hopes of finding a way
to better adjust the controller’s design, but things went nowhere fast.
Engadget reports, “Instead, she was told the testers didn't like anything about the
It wasn't helpful.
She described the trip as one long Lost in Translation moment, where minutes of speech
from the testers was boiled down to, ‘Oh, he doesn't like it; it's too big.’”
The controller even earned the scorn of many Japanese developers as well.
Bachus recalled, “They said, 'obviously this is going to fail.
Nobody is going to buy this.'
Then they started rethinking their commitments to the platform.
They said, 'this combined with the enormous giant console says you really don't intend
for this to be successful in Japan.’”
Seamus Blackley stated, “There was actually a petition of Japanese game developers [against
the Duke], and it had a lot of really famous names on it.”
This prompted the Xbox Team to rapidly develop a replacement controller under the codename
Akebono, a nod to the Hawaiian sumo wrestler Akebono Tarō, the first non-Japanese-born
sumo wrestler to obtain the title of “Yokozuna,” the highest rank in sumo wrestling.
This would ultimately become the Xbox Controller S which was finalized just in time to be packaged
with every Xbox system in Japan at launch…
…But Bachus claims that by then the damage had already been done, saying “It caused
everybody in Japan to say, 'do these guys know what they're doing?
Are they going to be successful here?'
That was rough.”
This plagued the Xbox as Microsoft’s relations with Japanese publishers proved to be a serious
thorn in the system’s side.
After Sony’s original PlayStation smashed sales records in the 5th console generation,
the company practically reigned over many Japanese publishers.
Thus, fearful of offending or distancing themselves from Sony, some publishers were squeamish
to support Microsoft.
Bachus recalled a particularly telling incident at a party at E3 saying, “[The party] had
every one of the major Japanese game publishers who we'd spent a lot of time with in Japan.
I ran into one of these guys, who was standing with [then President and Chief Executive Officer
of Sony Computer Entertainment] Ken Kutaragi.
At first he was like, 'hey!' and his face lit up.
And then he realized he was standing next to Kutaragi.
'Oh, oh, I'm sorry, do I know you?'
He pretended he didn't because he didn't want to alienate Sony.”
However, Microsoft did manage to build relationships with at least a few companies - such as Konami
thanks to Microsoft Game Studios publishing a port of Metal Gear Solid onto the PC…
…And Tecmo through Blackley’s close friendship with famous game designer and then leader
of Team Ninja Tomonobu Itagaki.
Microsoft also built a strong bond with SEGA after Microsoft developed a version of Windows
CE and other development tools for the Dreamcast.
With SEGA arguably giving the Xbox the most ardent support in Japan by signing on to release
11 exclusives for the system, including titles such as Jet Set Radio Future, Panzer Dragoon
Orta, Gunvalkyrie, and Crazy Taxi 3: High Roller.
But it appears that this still wasn’t enough as there were still too many that got away.
For instance, upon hearing that Shinji Mikami, creator of Resident Evil, was unhappy with
working on the PlayStation 2 and was considering moving the series onto another console, Microsoft
quickly set up a meeting with him.
A EuroGamer article explains: “The meeting was conducted by a member of
Microsoft Japan's staff who could speak both English and Japanese.
Things began cordially, but soon started to deteriorate.
Bachus shifted uneasily in his seat.
He could tell from Mikami's body language and tone that he wasn't happy with the answers
he was getting.
The entire meeting was conducted in Japanese.
Notes were passed to Bachus explaining what was going on but all he could do was watch
in horror, helpless, as it fell apart.
The meeting ended abruptly.
Mikami stood, bowed, and left.
“Bachus was furious.
The translator explained: Mikami had confirmed what Microsoft had heard, that he was frustrated
developing for PlayStation 2, which was tough to work with.
But his team's bonuses were tied to game sales.
He needed a reason, a way to explain the shift away from the wildly successful PlayStation
2, the dominant platform of the time, to the Xbox, which had yet to launch, and which in
most Japanese eyes was doomed to failure.
‘What do you guys have to offer?’ he asked, bluntly.
“Eventually an exasperated Mikami boiled it down: 'what is your philosophy?
Sony says games are entertainment, something larger, fueled by the Emotion Engine.
Nintendo says games are toys, created by the legendary Shigeru Miyamoto, perhaps the greatest
game developer of all time.
What do you feel?'
Microsoft had no answer.
“‘I almost jumped out the window because we had said repeatedly over and over and over
that we aspire to enable games that could be considered to be art, much like film,’
Bachus says, ‘that because of the maturity of the development tools and the APIs and
the power of the technology, game developers on Xbox would be able to concentrate on the
finesse features that elevated games to being something more than they were otherwise.’
“‘So the guy who reported to me said, 'oh that's so great!
I wish that I had known that.'
But unfortunately it was too late.’
“Bachus flagged down Pat Ohura, the head of Xbox Japan at the time, and told him to
jump on the next train to Osaka to salvage the deal.
But he was too late.
Mikami had already met with Nintendo and pledged Resident Evil to its consoles.
[Bachus concluded,] ‘That's why Resident Evil 4 was a Nintendo exclusive and it took
a while for it to come to Xbox.
That was very frustrating.’”
Ed Fries shared a similar story with the hit MMO Final Fantasy XI.
As it turned out, Square was interested in bringing the game to the Xbox, but they wanted
the game to have cross-play between both Xbox and PC players.
However, at the time leaders at Microsoft weren’t keen on the idea.
Fries told EuroGamer, “I was just trying to get Square to support us at all.
This was something they were willing to do on Xbox.
They weren't willing to bring their core Final Fantasy over because of their tight relationship
with Sony, but if we could get FFXI then we'd have a Final Fantasy on our platform.
That sounds great, right?”
After a lot of work, Fries managed to set up a meeting between Microsoft and Square,
but it immediately crumbled.
Fries said, “I just sat there and watched it fall apart.
There was a whole bunch of American attitude to the meeting, and the Japanese did not appreciate
It was like watching a train wreck.
It was like watching all this work I had done just fall apart.”
This clash of cultures also happened at Microsoft’s keynote Xbox conference at the 2001 Tokyo
Game Show headed by none other than Bill Gates himself.
The richest man on Earth had come to personally assure an audience of around 4000 people,
including executives from major Japanese publishers, including Capcom, Namco, Square, and others,
that Microsoft was serious about getting into the video game console industry and that Japan
was just as important to them as anywhere else.
However, things went south when Gates stopped talking about the industry and switched into
a full-blown sales pitch for the Xbox.
John Greiner, once president of Hudson Entertainment who spent 20 years with the company and much
of it in Japan, said: “Put it this way, CESA, the organizer of
these big events, they were pissed because of his speech and what he said.
That turned a lot of developers and publishers away.
They had a speech they vetted, and then when he gave the speech it wasn't the same speech.
There were parts that were different.
He was supposed to be talking about the industry but he was really just plugging the Xbox.
“That was a big deal, and people were pissed.
The whole Xbox introduction into the Japanese market was not done correctly.
They lost the faith of the people who they really needed.
I'm not saying they went out of bounds, but it was a bad start.”
This bad start continued following the Xbox’s official Japanese release the following year
when the company was slammed by angry Japanese consumers after it turned out that the system
left scratches on game discs.
While this issue wasn’t exclusive to Japan, it reportedly caused much more of an uproar
there due to the country’s strong second-hand market where scratches could lower a game’s
Fries explained, “As [discs] spun in the [Xbox’s] carrier it could leave a rotary
scratch on the outside of the disc, which doesn't interfere with gameplay at all, but
interfered with the re-sell value in Japan.”
This, alongside a general lack of Japanese style games on the Xbox due to the company’s
aforementioned difficulties securing ties to Japanese publishers and developers, arguably
contributed to the system’s poor sales numbers.
In face of this, Microsoft responded with a round of layoffs at Microsoft of Japan,
but this only made things worse.
Bachus called the layoffs, “very, very not Japanese.
[Microsoft] handled it in a very American way and it made national headlines, so it
again reinforced the notion that [the Xbox] wasn't a console for Japanese gamers.
This was a console that was for western gamers and was being made available in Japan.”
This view has been supported by others such as Yosuke Hayashi, the current head of Team
Ninja who answered a question regarding Microsoft’s woes in Japan compared to Nintendo and Sony’s
success by saying…
“Microsoft is an American company.
That's where it has come from…
“…There's just something about the hardware that gets made in each region that works for
that particular region, and the people there just know it and they get it.
It's a natural evolution of being created there.
That's one of the things which might have hampered Microsoft or made it one of the challenges
to reach the people over here.
“It's just not from here.
It just doesn't feel like it came from here.”
Long time Capcom producer, Keiji Inafune, shared similar sentiments despite his support
for Xbox consoles by saying, “As a Japanese [person], I think it’s
only natural you feel closer or attached more to domestic products and I find myself being
that way too.
When you see two products with similar features and one is from your own country and the other
is from foreign countries, it’s easy to pick the one from your own country.
“From this perspective, Xbox is made by Microsoft in the US, so it’s not a domestic
It’s only natural that you want to support your domestic products.
If there were more Xbox-exclusive games out there, things may have been different, but
usually a title is developed for multiple platforms so that’s not the case.”
On the other hand, Rob Fahey, former editor of GamesIndustry.biz who spent several years
living in Japan, disagrees calling these views, To quote, “Utter nonsense, as anyone who
witnessed the enormous queues and boundless enthusiasm for the launch of iPhone 6 in Japan
a couple of weeks ago can testify.
Apple's smartphones utterly dominate the market here, much to the detriment of local companies
like Sony and Sharp; their laptops and tablets do extremely well too.
In plenty of other consumer product categories, from luxury cars (BMW and Mercedes) through
to coffee makers (DeLonghi) and personal care products (Philips), western companies do remarkably
If anything, overseas products carry a certain cachet among Japanese consumers.”
He went on to say,
To quote, “The Xbox did not fail in Japan, is not continuing to fail in Japan, because
people here don't want to buy a product from a foreign company.
It is failing because of something intrinsic to the product in question - something that
simply doesn't appeal to Japanese consumers.”
Microsoft certainly has continued to fail in Japan.
While the Xbox 360 performed much better than its predecessor, selling over 1.6 million
units in Japan, this still accounts for less than 2% of the 360’s lifetime sales worldwide
and pales in comparison to the Wii’s and PS3’s numbers.
To add to this, the Xbox One has so far faired even worse.
VGChartz’s lead analyst, William D'Angelo, reports that as of October 2017 the Xbox One
has only sold a mere 84,659 units in Japan since its release there in September 2014.
Compare this to the PS4’s Japanese sales of over 5.5 million units since February 2014
and the Nintendo Switch’s over 2.4 million units since March 2017.
In fact, according to Famitsu, the Xbox One X only sold 1,344 units in Japan over its
launch week, just over half as many units as the PlayStation VITA sold that very same
Even Phil Spencer, the current head executive of Microsoft's Xbox division, admitted in
an interview with Famitsu that, to quote “Sadly the Xbox One is not living up to the amount
of sales I originally thought [Japan] would put out.”
With every single Xbox console’s failure in Japan since the brand’s inception it’s
a wonder if Microsoft will ever get its chance to shine in the land of the rising sun.
What do you think about the Xbox’s troubles in Japan?
And what do you think Microsoft should do to help improve the situation?
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regional and cultural differences like this are something that you are interested in.
Until next time, thank you for watching!