The presentation was part of Xbox’s broader strategy to appeal to Asian audiences and gain market share in Japan, a country that has traditionally shunned its consoles. In 20 years, Xbox has sold a total of 2.3 million consoles in Japan, according to Famitsu Weekly Magazine.
“We’ve been on this journey for a long time, and we’re not giving up,” said Sarah Bond, vice president of game creator experience and ecosystem at Xbox, in an interview with The Washington Post after her back from Tokyo.
Bond said Xbox is betting the company’s investment in a slate of Asian titles will pay off and show that Xbox is more than Halo and Forza. Generally, Asian gamers preferred to buy PlayStation and Nintendo devices, where they can find more Japanese role-playing games and story-based games.
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“We invest in both the depth and the breadth of the titles that are on our platform, and that’s exactly how reputations are built,” Bond said. “We’re seeing that game creators are more willing to take risks with Game Pass because they actually know they’ll be better able to find an audience. Someone will fall in love with something that isn’t necessarily such a big brand, but provides a really, really delightful player experience.
Bond said there are over 250 developers in Japan who have created more than 150 games to date, including titles like “Tetris Effect: Connected” and “Craftopia”. These titles will be released on the Xbox platform, although many are not exclusive. During the Tokyo Game Show, Xbox announced that pre-existing PlayStation titles such as “Danganronpa V3: Killing Harmony Anniversary Edition” and “Ni no Kuni: Wrath of the White Witch” are now available on Game Pass. It plans to bring “Eiyuden Chronicle: Hundred Heroes” and several Persona titles to Game Pass over the next year.
“While Xbox Series devices aren’t expected to sell near the level of Sony’s PS5 for the next few years, Microsoft is now more competitive than it has been for at least a decade. [in Japan]said Piers Harding-Rolls, analyst at market research firm Ampere Analysis. “It shows that Microsoft’s market approach is paying off.”
Microsoft noted that its current generation of consoles are selling better than previous generations, though it didn’t share specific sales numbers.
Bond said the company reflected on its past mistakes, such as the Xbox One console launching in Japan nearly a year later than other markets.
“When we were talking about the Xbox One launch, there’s a lot of things about that launch that we know we didn’t fully understand,” Bond said. “It took us a long time to learn from our mistakes and really apply that and start growing both our hardware, our product line, and our relationships with creators.”
For the launch of the Xbox Series X and Series S consoles in 2020, the company launched the new consoles in Japan simultaneously with other parts of the world. The Xbox Series X generation is the best-selling to date, according to Microsoft. Harding-Rolls’ market research firm found that Xbox sold less than 100,000 consoles in Japan last year, compared to Sony and Nintendo’s combined sales of more than 6.7 million.
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Harding-Rolls said Microsoft’s small improvements in a tiny market share lagged far behind Japanese consoles and mobile devices.
“There are limits to what Microsoft can accomplish with its console product strategy in Japan, and [that] underscores why it seeks to reach gamers on all devices with its cloud gaming strategy,” he said.
Bond said Microsoft’s investment in growing its audience in Japan and beyond will take time.
“A generation of hardware takes a long time to build all that engineering,” she said. “It’s a five to seven year process to move this forward. Building relationships takes a long time. And building a real AAA game can – we’ve seen that it takes up to six years to build a AAA game.
In June, Microsoft Gaming CEO Phil Spencer acknowledged that Japanese developers don’t always come to Xbox and that the company is working on adding more games from the country, such as upcoming Persona titles and a non-Japanese game. announced that Metal Gear series creator Hideo Kojima is watching. Persona game developer Atlus did not respond to a request for comment.
Bond was tight-lipped about meeting Spencer and Kojima last week, simply saying, “We’re working with creators in Japan to make really special things for people who play on Xbox, and we’re going to continue to do that.”
Xbox’s current business model is to sell its hardware at a loss, and last year during Epic Games v. Apple lawsuit, Microsoft vice president of games Lori Wright said the company never made a profit by selling consoles and, instead, focuses on selling software and subscriptions. Bond confirmed that the model remains the same, even as more game titles are added to Game Pass.
“The way our business works is we build a console and then we subsidize the console so it’s affordable for the consumer,” Bond said. “Then consumers make purchases on the console, they buy games, they buy subscriptions, and then as a result we make revenue and a margin on that.”
The tech giant has its eye on most of Asia, not just Japan. In April, Xbox announced it was starting the PC version of its subscription service in Malaysia, Indonesia, the Philippines, Thailand and Vietnam. Microsoft’s acquisitions of other studios helped its Asian ambitions. Bond noted that “Deathloop” eventually coming to Xbox makes sense because the game is being made by Bethesda, which was bought by Xbox last year for $7.5 billion. As part of the same deal, the company also acquired Tango Gameworks from Bethesda, the Tokyo-based studio behind “Ghostwire: Tokyo.”
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Despite the audience differentiation between PlayStation and Xbox, there is still a lot of overlap in the titles offered on the two platforms. Earlier this month, PlayStation CEO Jim Ryan said Microsoft’s promise to keep Call of Duty on the platform for at least three years beyond the publisher’s current deal. the Activision and Sony series was “inadequate on many levels”. reported by GamesIndustry.biz. (Microsoft announced plans in January to acquire Activision for $68.7 billion in a landmark deal currently being reviewed by regulators.) Sony did not immediately respond to a request for comment.
Bond said the way Xbox plans to expand into other markets is by considering there are over 3 billion players, but only several hundred million consoles. His approach is to stop focusing on consoles.
“What we’re really focused on is enabling any of the 3 billion gamers to play any game on any device,” Bond said, when asked. whether the age-old console wars between Xbox and PlayStation would continue. “It could be a console, it could be a PC, it could be a phone, it could be a tablet, it could be some other type of handheld.”