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X-7: Japanese Xbox Invasion

After a very successful North American Xbox launch last November, Bill Gates had hoped he could roar into the Japanese marketplace last month with Godzilla-like ferocity and replicate his success there during the Japanese launch, making the Xbox a serious contender for Japan’s gaming yen to Sony’s PlayStation 2, the undisputed home console market sales leader. Instead, despite a huge marketing campaign in Japan and a good quantity of launch titles along with the most advanced home console out there, the Xbox’s entry into Japan has early on been a serious sales disappointment, looking more like Gadzooky than Godzilla in the Japanese videogame sales charts.

Gates had hoped all the pre-launch hype would translate into selling out the initial 250,000 Xbox systems placed into Japanese stores. But sales have been sluggish at best, with approximately only 165,000 of those units sold so far to date. Software sales have been weaker than expected too. In North America, there were close to three games sold for each Xbox purchased. In Japan, that figure was almost half. Software is where the profit making takes place, and if Japanese consumers aren’t heavily buying software (let alone the system itself) the Xbox is in for a rough Japanese ride.

If Microsoft had assumed those early disappointing numbers would reverse, then they couldn’t have been too thrilled with the latest sales reports out of Japan. In a recent tallying of Japanese hardware sales for a week, Sony sold over 80,000 new PS2s. The sales figure for the Xbox that very same time frame? Try 2,000. Yeah, you read that right: a paltry 2,000. That means that Sony’s technologically inferior PS2, which has been available for 18 months, outsold the Xbox by a hard-to-believe 40-1 margin. The PSOne outsold it by 2,000. And Nintendo’s GameCube, struggling itself to chop into Sony’s console sales stranglehold, placed 15,000 ‘Cubes into Japanese gamers hands. Even harder to believe is that the now-defunct Dreamcast outsold the Xbox by 1,000. If anything speaks volumes of the Xbox’s long-range prospects in Japan, being outdistanced sales-wise by the Dreamcast certainly does.

Why is the Xbox struggling so mightily in Japan? To start with, the home console market has traditionally been controlled by Japanese companies (with the exception of Atari early on) such as Nintendo, Sony and Sega. And quite frankly, the Japanese have a penchant for not being interested in non-Japanese hardware. Just take a look at the Jaguar and 3DO’s Japanese failures. Japan’s gaming market is truly a unique one indeed. The first-person shooter Halo, universally considered the best Xbox game available, isn’t doing well in Japan among those who purchased an Xbox. Why? Because the first-person shooter genre isn’t popular among the Japanese gamers. Games that sell well in North America and Europe don’t always cross over successfully to Japan, and vice versa. Having very lukewarm support for the Xbox by Japanese software developers also isn’t helping Microsoft’s Japanese cause. Developers there have been slow to start Xbox projects until it shows it is a viable (meaning profitable) system to make games for, particularly in Japan itself. In today’s unstable worldwide economy, taking risks is out of the question. Japanese developers are playing it safe by sticking with developing software for the top-selling system, the PS2.

Launching the Xbox in Japan five months after it hit the North American market didn’t help matters much either. Traditionally, console launches have followed the reverse pattern. The Japanese usually had a system in their hands six months before it reached North America.

Sony also has a well-established library of games, and has titles and series like Final Fantasy that appeal to Japanese gamers that won’t appear on an Xbox anytime soon. If you combine the PSOne and PS2’s library, the total number of games available on a Sony console is close to 1,000. The Xbox has maybe 75 so far. Don’t think that doesn’t make a difference when someone is deciding which system to purchase.

Microsoft seemingly can’t buy a break in Japan. Shortly after the launch, reports of Xbox units causing scratches to the Xbox games led to the temporary pulling of the systems from Japanese store shelves. Even though Microsoft said that the games would still play despite any scratches and would quickly replace any units that consumers felt were defective, the damage had already been done to the Xbox’s reputation.

Despite its miserable start in Japan, the Xbox may be in a unique position in the history of home console makers to survive without the support of the lucrative Japanese gaming community strongly in its corner. Before the Xbox launched even in North America, it was predicted to lose 2 billion dollars in its first five years (Yes, that’s BILLION), which only a company under the influence of the deep pockets of Bill Gates can afford to drop without much concern. We saw what happened to Sega when the Japanese gamers spurned it en masse, and Sega is a Japanese company. But they weren’t in the financial shape to withstand a long-lasting entrapment in red tape. Microsoft can. Of course, the way the Xbox has so far failed in Japan may also turn out to be a case study on how important the Japanese really are to prosperity in the videogame world and that no console can last without them. Only time will tell.

- Lee Cieniawa

lcieniawa@armchairempire.com

Next month: Xbox at E3

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