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PlayStation has 'declined' in Japan, potentially presenting Xbox with an opportunity

Xbox Series X, Xbox Series S
Xbox Series X, Xbox Series S (Image credit: Matt Brown | Windows Central)

Since the Xbox's inception, Microsoft has historically struggled to deliver its gaming platform to the lucrative Japanese market. Nintendo and Sony PlayStation have long dominated the region, alongside PC, creating a wall that Microsoft has notoriously failed to breach.

The cold shoulder has impacted the Xbox platform in the West, too. Xbox fans have historically missed out on many great Japanese franchises, which skip the platform arbitrarily owing to weak outreach in the country, and low usership. However, there are signs of change.

Microsoft recently grabbed games like Dragon Quest XI and the entire Yakuza franchise for Xbox, which quite rapidly became some of the best JRPGs on Xbox. We also got Nintendo hit Octopath Traveler on Xbox too, unexpectedly, among various others. However, Sony PlayStation has the legendary Final Fantasy franchise on near-total lockdown, alongside Persona and trending Japanese anime-inspired games like Genshin Impact. Such is the reality that, if you're a JRPG or anime-style game fan, you're likely considering a PlayStation or a Nintendo Switch as your preferred console.

As Microsoft heads out to showcase the Xbox platform at the Tokyo Game Show this month, we have to wonder what, if anything, Microsoft can do to change its fortunes in the region. And now might be a better time than any to double down.

Reports suggest PlayStation has seen some decline in Japan

PS5

Source: Jennifer Locke | Windows Central (Image credit: Source: Jennifer Locke | Windows Central)

While still enjoying a far, far bigger install base than Xbox in the region, there have been some signs that gamers in Japan have been losing interest in the platform, faced with an incredibly strong resurgence from Nintendo.

A recent report (via Siliconera) suggested that the top 30 games sold in the region were on Nintendo Switch, with nary a PlayStation game in sight. Ironically, it was Microsoft's Switch version of Minecraft that topped the chart back in August, and marked the first time since 1988 a single console had taken up all 30 spots on the list. Another report (via GamesIndustry Japan from back in January suggested that the PlayStation 5, while initially strong, month over month proved Sony's weakest console launch in Japan for a long time. That's not to say the PS5 is doing poorly on a global stage, though. The opposite is true.

Sony clearly allocated the bulk of its PS5 stock to regions it felt it faced a bigger threat from Xbox in, beating out Microsoft in NPD results in the U.S. and taking the pole position in the U.K. for several months. Microsoft had a few monthly victories of its own, though, even in these regions. Although the reality is that both platforms are heavily constrained by the global semiconductor shortage, which makes the silicon for the PS5 and Xbox Series X and Xbox Series S consoles hard to come by. Microsoft has also been dedicating mountains of chips to building up its Xbox Cloud Gaming platform, which is based entirely on Xbox console architecture. Neither platform is meeting demand, ultimately, giving us a potentially obscured picture of how the systems could potentially be doing.

Playstation at GDC 2019

Source: GDC (Image credit: Source: GDC)

However, the same report from GamesIndustry Japan, among other sites, refers to a change of attitudes towards PlayStation in Japan, both from customers and developers. A few years ago, Sony moved its HQ to the U.S., along with its corporate structure and culture. The PS5 has notoriously swapped the action buttons around to the Western format, too, with X replacing O as the primary key on controllers. Developers have had to conform to new rules and processes to conform to the U.S. market as well, which hasn't always proved popular. The ACE Economic Research Institute described the PlayStation brand as in "decline" citing various reasons, from the U.S.-centric attitude of PlayStation's new leaders, to a collection of small things like missing Japanese subtitles in live streams, and a big reduction in Japanese support staff. It should be noted that Sony denied all of these reports, saying that Japan remains its "most important market," in comments to Bloomberg.

I've often criticized Microsoft for its Anglo-centric marketing and presentation, which is often blamed for Microsoft's disproportionate performance in the U.S., U.K., and other English-speaking regions. For PlayStation fans, it's not ideal to see Sony making the same mistakes. Assuming all the reports are accurate, and the sales trends aren't purely the result of the semiconductor shortage, it does potentially give Microsoft an opening to capitalize if it has the desire to do so.

The Xbox Series X|S has seen some upswing in Japan

Xbox Console Sales August

Source: Famitsu (Image credit: Source: Famitsu)

While still far below the sales of the PlayStation and Nintendo Switch, or even previous Xbox consoles, the Xbox Series X and Series S have proven themselves to be enjoying an upswing in Japan, and have surpassed the Xbox One sales week over week by a healthy margin. Previous comments by Microsoft said they were seeing "phenomenal growth" in Japan, particularly among owners who have never owned an Xbox console before.

Famitsu in Japan tracks console units sold, and if we're to believe they're accurate, it looks as though the Xbox Series lineup has proven itself to be far more popular than Microsoft's previous console. Sleeker hardware likely played a part there, but Microsoft has also worked harder to ensure staple Japanese franchises hit the Xbox, alongside their PlayStation and Nintendo counterparts. Microsoft also grabbed its first Japan-based studio in Tango Gameworks, known for The Evil Within, and the upcoming PlayStation exclusive Ghostwire: Tokyo. There's still a lot of work to do there, naturally, but Microsoft does seem to be turning it around.

Is now the right time to invest in Japan?

Surface Duo Gaming Yakuza Lad

Source: Windows Central (Image credit: Source: Windows Central)

Microsoft is still heavily constrained by the semiconductor shortage, as is Sony. That could play to Microsoft's advantage, though. With Sony unable to meet demand, this is potentially a good time for Microsoft to start pushing and advertising the Xbox platform as a good alternative to consider for the future, leaning on features like Xbox Cloud Gaming, and its coming parade of high-quality upcoming Xbox exclusives stemming from its big Bethesda purchase. Microsoft is heading to the Tokyo Game Show to do just that this month, but it's only the first brick in a huge monument they'd need to build to really change the situation around.

It feels as if this is one rare opportunity Microsoft shouldn't pass up.

Obviously, the benefits for Western gamers would be big, with a larger variety of games to choose from, with fewer titles like Persona arbitrarily skipping the platform due to the perception of Japanese game fans in its customer ranks. Tactical JRPGs also lend themselves incredibly well to cloud gaming, thanks to their turn-based format, which could help drive interest in the Xbox platform too. Many of these games skip smartphones on the basis that they simply aren't powerful enough, after all.

It all comes back to semiconductors, though. It's all well and good advertising your platform, but if you have no silicon for cloud servers or consoles then there's not much point. Microsoft has an opportunity to start laying the groundwork, though. There are reports that Microsoft is scouting for more Japanese studio acquisitions, although we've yet to see them come to fruition.

Naturally, I have a desire to see all of this happen, as a fan of Japanese games, and as an Xbox customer. For Microsoft as a business, it has to make sense from a financial perspective. But with anime and Japanese culture more popular than ever, and cloud-based games in Microsoft's future, it feels as if this is one rare opportunity Microsoft shouldn't pass up.

Jez Corden is a Senior Editor for Windows Central, focusing primarily on all things Xbox and gaming. Jez is known for breaking exclusive news and analysis as relates to the Microsoft ecosystem while being powered by caffeine. Follow on Twitter @JezCorden and listen to his Xbox Two podcast, all about, you guessed it, Xbox!

24 Comments
  • I think the success will come down to price, how well Microsoft markets Xbox in Japan, and how much they try to force Japanese games to confirm to Western sensibilities. That last one especially has left Japanese developers out of charity with Sony.
  • Japanese games to confirm to western sensibilities ? censorship is an un-defendable content wrecking system that has continued to push western players out of games that they used to enjoy, Content should be based on the "paying" users needs, not on a woke ideology by people who don't even play the game, less alone pay for it. Which is one of the reasons why the PlayStation platform started declining in japan, they started catering to western ideologies hence the consumer base simply looked towards other platforms that actually provided the user with what they paid for, as the consumer has the right to experience the whole product of what they have paid for, as the publisher has the right to decide that their content should not be censored by corporates trying to appease to ideologies that don't fund their BUSINESS NOR CREATIVITY, it only leads them to bankruptcy in the long run cause nor the developers or users will be expecting to put their faith or money in such practices..
  • Pretty sure that is what I said but in fewer words. "Confirm" was an auto-corrected typo as I meant to say "conform to Western sensibilities" but I did not mean that statement as a desirable outcome. I have spent 30 years of my life watching anime, playing Japanese games, and enjoying the culture as-is. While there are parts I don't care for, I don't want it to change and Microsoft will fail (deservedly so) if they attempt to do the same thing Sony has. Basically, we are on the same page here.
  • Yeah I think of this is projection. There isn't any evidence culturally of Japanese companies, let alone, Sony, trying to be more "woke" in Japan. Japan is a homogenized society. Rather, it COULD just be, that many of the games that interest Japanese Gamers right now, aren't on the Playstation right now, and you could point to the Switch sales, to see that. Furthermore, there's also price. The cheapest "Next Gen" system is the Series S. You can look and notice it selling SIGNIFICANTLY more than the X, just like it does in US, and the fact that it, along with the switch, are cheaper than Sony's offering are most likely what is impacting sales. To cement that point. Notice that most Japanese software titles, with the exception of first party of course, are available on nearly all platforms. If Japanese players play mostly Japanese games, they are more likely to choose the most affordable platform to play those games, and right now, it isn't playstation.
  • Series S is not selling nearly as well as the Series X, so it seems price is not that important and the Series S is way more available. The Series S surprisingly is not very appealing, I thought it was a killer move by Microsoft, but it seems that it isn't.
  • The Series S is capturing a segment of gamers that Microsoft has not been able to capture before -- the segment of Sony and Nintendo gamers who would never spend $500 for an Xbox, but are OK paying $300 for a Series S and subscribe to Game Pass and play Xbox games that way (as well as other games on Game Pass that they would not buy for in other consoles) In that way, the Series S is adding sales that the Series X would not have been able to achieve by itself. Basically, they become gamers of Series S as a secondary (or even tertiary) console. Because they're not primarily Xbox gamers (they primarily game on Sony or Nintendo), so they don't see themselves spending "full price" ($500) on an Xbox console, but $300 is a "discount" good enough for secondary gaming
  • Maybe you are right, I don't think that's a big market though.
  • It could become a bigger market as Game Pass grows bigger since that's what they use it for. The two fates are intertwined
  • statistics shows as is doing better than sX, in Japan.
  • The statics that are in this article say otherwise.
  • Shipped 1m PS5 but no one buys games (BioHaarzard sold like 53k), you wonder who's really buying the console... PS brand and its supporting publishers is the reason why j-console-market is shrinking YoY for the past 10 years. 恩義マン that support PS brand, either got demoted or fired. Their home turf is dying, is not sustainable and this is why they need to march into PC space around 2013 and now, Xbox. J-gamers have been saying PS5 got no games.
    J-gamers been saying Sony had abandoned Japan.
    Several j-titles will be released on Xbox first.
    "PS5 == last gen machine" is the general image among core gamers and thus Xbox + GamePass (and XPA, its robust BC/FC, QuickResume and other perks thanks to Virtual Machine) is the way to go.
    Young core gamers prefer PC these days.
  • btw, Sony can ship more than they can produce. That 1m shipment, contains refurbished units. Sony ship one to store, +1.
    Your PS5 is dead, you get a replacement from Sony, +1.
    Sony ship the one you returned to store, +1.
  • I feel like I have been hearing about how Microsoft is finally going to make headway into Japan since the Xbox 360. I remember they made a big deal about how they were trying to cater to Japanese gamers and how they were making JRPG's a focus. I even remember there being a huge spread in Gameinformer about Blue Dragon. Hopefully, Microsoft finally starts to make actual progress. More style of games is never a bad thing!
  • People complaining about Sony ignoring Japan with Playstation this gen is already a sign something has changed. The weirdest thing is that people outside of Japan care more for this than the Japanese people themselves.
  • Perhaps part of that is because people outside of Japan probably fear missing out on certain games because of Sony's policies. Sony has blocked games from coming overseas before such as the Omega Labyrinth game and Gal Gun 2 I think.
  • Until Microsoft snaps out of the illusion that Japanese gamers will be drawn to Western style games, Microsoft is never going to win over the Japanese market. It’s just that simple. When Microsoft acquires Japanese studios (and no, the token incidental Tango Gameworks acquisition does not cut it) and shows that they’re serious about the region by making their presence known with content that appeals to those gamers (as well as gamers such as myself), they will have a fighting chance, but until then, releasing smaller hardware and a subscription service that works on tablets and cell phones will remain unfulfilled potential in that part of the world.
  • A perfect encapsulation of the Japanese Xbox situation is Tomonobu Itagaki. He came out fairly recently and expressed an interest in being acquired by Microsoft. What happened with that? Here’s the guy that revived Ninja Gaiden as a relevant series, and for the OG Xbox no less, and whose support at launch was the reason I decided to go with the Xbox at launch when the Dreamcast was dying instead of the competition, personally speaking ..this is a guy who loves the platform and who people in Japan pay attention to when he speaks.. and we haven’t heard a word from Microsoft.
  • I don't see an opportunity for Xbox, Xbox there is basically just the PS5 but worse, if you like Japanese games then why would you buy an Xbox?
  • cus PS brand has been killing Japan console market since 10 years ago?
    AAA Japanese publishers need to and is already teaming up with Xbox. There are techs, Sony just doesn't have and unable to provide.
  • Why would they team up with Xbox?
  • PS brand and its supporting publishers is the reason why j-console-market is shrinking YoY for the past 10 years. 恩義マン that support PS brand, either got demoted or fired.
    Their home turf is dying, is not sustainable and this is why they need to march into PC space around 2013 and now, Xbox. J-gamers have been saying PS5 got no games.
    J-gamers been saying Sony had abandoned Japan.
    Several j-titles will be released on Xbox first.
    "PS5 == last gen machine" is the general image among core gamers and thus Xbox + GamePass (and XPA, its robust BC/FC, QuickResume and other perks thanks to Virtual Machine) is the way to go.
    Young core gamers prefer PC these days.
  • Think I'll explain a lilo more... 30 years ago, j-games == quality. Even foreign IP owns know they have to outsource to Japan. If a game can do well in Japan, can do well in the world. PS1~3 era, while the west is heading towards active ragdoll, organic programming and all those new techniques and programming concepts, Japanese programming mindset tanked (stuck in NES era I'd say). Their western dominance is failing too. Old classics, old IPs are mostly gone (thanks to 恩義マン like Kojima and Noguchi). PS4 era… we (j-publishers) can smell something is rotten miles away... we need to do something while we still have some cash in the bank. We cannot head west due to those culture difference, let's head east! China&Steam is the new market. Japanese console market continue to shrink. 2017 Switch came out and broke the curse. But non-Nintendo games still aren't selling. PS5 era… what should we do? We admit our games are niche (subculture is still just subculture, even in Japan. And you have to compete with figuring, anime and other products, after all, most of'em have limited storage space and money), we need to broaden our user base. The answers is? Xbox. Xbox Virtual Machine, XPA, xCloud == mega trend. 2020 onwards, the IPs that they think that might have some global appeal, will come to Xbox and PC. Even it's unannounced... cross-platform is their 1st priority. Do you know what Japanese kids are playing nowadays? Not JRPG. Besides Animal Crossing, it's Minecraft and Fortnite. It's FPS. It's also why Sony closed j-studio. And Level5 closed their US branch. j-games is niche, even in Japan.
  • PS brand has been killing Japan console market since 10 years ago...
  • My question is...has any non-Japanese electronic maker (other than apple) had success in Japan? I'm glad to see the Series consoles performing better than the XB1, but the bar was so low, that I'm not surprised. I do think Phil's push to get more Japanese made games on the platform has helped immensely, but I'm still skeptical. I think once Xbox starts making any headway, Sony will tweak their strategy, and squash all of that, but time will tell.