The Xbox experiment in Japan is a demonstration of a company never really learning how to engage its market. The failure of the platform here is usually explained as the marketplace being hostile to foreign products. Japan has the homegrown PlayStation and would never accept another console. Certainly not an American one.
This explanation comes from people representing the company and it is their job to explain away failure as not being the fault of the company they work for. The harsh reality is there is rather strong empirical evidence to demonstrate otherwise.
The Xbox consoles are made by Microsoft. Windows is also produced by Microsoft. If Japan were hostile to American products, particularly American ones, then Windows would not be the defacto standard in every office in the country. If Japan were really that hostile to foreign products and technology then some homegrown variant of an operating system would have risen up in its stead.
To further support Japan’s openness – the iphone. In 2016 it held 72% of the market share for smartphones. The homegrown Sony Xperia has only about 20%, showing that not only can Japan, as a market, be broken into, it can be dominated with the correct branding and message.
No one ever staples xboxs to their head in Japan
The argument could be made that gamers are a different breed with stronger brand loyalties, but look at the introduction of the Xbox360. There was ample advertising and great interest. The first Xbox sold poorly in Japan, managing just over half a million units between 2002 to 2005.
Despite this weak install base the 360 managed to sell 1.5 million units over a similar time period. This is despite the poor reputation the 360 garnered when it was released. The high failure rate (the red ring of death) at launch was jumped on by the media as a scandal that demonstrated the comparable weakness build quality of American products.
Still, the 360 managed to gain ground. They had poor sales in comparison to the much more expensive PS3 (60,000 yen), the Xbox 360 was almost half the price if you bought the basic system, but it wasn’t enough to get over that initial gaffe. The marketing strategy was to make the 360 look fashionable where consumers wanted a better price (which the 360 had) and higher gaming specifications.
To make the Xbox One successful in Japan efforts needed to be doubled and the focus needed to be on video games. Xbox 360 sales spiked when JRPG Blue Dragon was released as an exclusive title.
Everyone who showed up for the XboxOne release…that guy.
A better system, a larger selection of games aimed at the local market (more RPG’s, less shooters) and a campaign directed at people who played games, not people who wanted a home entertainment system and Microsoft would have a real foot in the door.
At this point, Microsoft clearly gave up. There were a few television commercials that showed the machine, again, in a stylish and cool way, without making a clear appeal to players or demonstrating any advantages over the PlayStation.
There were few exclusive titles to pull people away from the PS4 and there were some ads on the Xbox 360 dashboard stating the release date of the new console. If the company wasn’t going to put effort into the market on release, then clearly the market was going to respond appropriately and buy the system marketed to them.
A secondary failure in this is the fact that on release the Xbox One was bundled with the Kinect. A camera that was touted as being “always on” that could respond to voice and gesture controls. Japan is a very privacy conscious culture and the idea of the camera watching people in their homes at all times was a massive turn off. This fact alone could have guaranteed failure in Japan, even if everything else was perfect. That is how serious privacy is to Japanese people.
Mircosoft then reduced shelf space in stores to save money. In Japan, the amount of shelf space a product gets isn’t always based on popularity and demand, it’s often paid for by the company. The reduction in space sent a message to consumers that the Xbox brand was on it’s way out, thus furthering the impression that it was not the console to choose since there would be less support in the future.
How did this not sell people?
Xbox One sold 23,562 units on the first day. To date they have sold a little over 76,500 units. The did 30% of their sales on the first day and as everyone knows, the initial sales are generally the peak.
Now comes Microsoft’s latest effort, Project Scorpio, later revealed to be the XboxOneX, obviously named by a 12 year old clan member. Last February Phil Spencer (head of Xbox Division) came to Japan in an attempt to garner interest for the platform and get some Japanese games on the console. Something Xbox One suffered from greatly as it just went further to demonstrate that Japan was no longer a market of interest.
If Microsoft wants any hope of making an impact on Japan it needs those Japanese games. With two main consoles in competition, the one that has more games will always come out on top. Of course, Spencer’s comments on the trip have been positive, but with all the failures in the past to make up for his task in Japan must be focused and well designed to bear out any kind of success. This may be Xbox’s last chance to see Japan as a viable market at all.