Over the years, I’ve been sort of perplexed by something:
why has Microsoft historically struggled with the Japanese market? I noticed it
a lot when I was studying in Japan last year. Whenever I would walk into a
store, the video game shelf space would be dominated by Nintendo and Sony
systems, with only a small area with Xbox products, if at all. I
always attributed the lack of Microsoft products to a lack of effort on the
part of the company, but it turns out that it’s much deeper than that.
In Japan, Nintendo and Sony reign supreme. Both have a
demanding market presence, both have a long history of products that have sold
well in the country and perhaps most importantly, both are Japanese companies.
I’ve heard that people tend to favor products from their own country, but I
haven’t considered it true, especially in a country where there are so many
different types of people like America. In my case, I’ve historically taken a
liking to Sony’s video game offerings. So while the idea that people identify
with products from their own country is understandable, I don’t embrace it when
it comes to what I like in video games.
Japan is a bit different though. It’s a homogenous country
where 98% of the population is Japanese and historically they’ve been a nation
that’s tried to keep to themselves and keep foreigners out. In a country where
only 2% of the population is foreign, the word for foreigner, “gaikokujin,” (外国人) seems to be much more potent. Japanese tend to
identify and endorse domestic products.
When considering why Microsoft hasn’t sold well, it’s also
important to think about just how long Nintendo and Sony have been around in
Japan. Nintendo came out with the Famicom (“family computer”) in 1983 and Sony
came out with its first video game system, the PlayStation, in 1994. Microsoft’s
first attempt at a home video game console, the Xbox, was introduced to the
Japanese market in 2002.
With such a rich history with the likes of Nintendo, Sega
and Sony, it was hard for Microsoft to win support from Japanese developers
during the initial stages of development for the Xbox. It makes sense too. If
you have a product that’s doing well in your country (from the Japanese perspective) and that’s the market you
care the most about, then why would you manufacture products for another company?
That could potentially alienate your collaborators and there’s no guarantee
that the product would sell well. Profit was more easily assured on the existing systems. It was a huge gamble for Japanese devs and
they went with the safe bet, sticking with the Japanese companies whose
relationships they valued.
To put things simply, there are three monumental obstacles
to the Xbox’s success in the country. First, there’s the competition. Sony and
Nintendo have a dominant home-turf advantage. Second is context. It’s really
hard to do well in a country where the substitutes are perceived to be better than
your product. Lastly there’s perception. The perception of Xbox is that of a
western gaming machine that’s being sold in the east. Japanese don’t feel as if
there’s content there that was made for them (for the most part).
In the face of all that, Microsoft can’t ignore that market.
To do so would be to give Nintendo and Sony free reign in controlling the
Japanese video game market. I believe that the Redmond Washington-based company
views their presence in the land of the rising sun as something that’s better
there than not. In the transition to the current console generation, many
people were saying that Microsoft should just skip the Japanese market where
many believed it impossible to do well, but no matter how few units they sell,
Microsoft will remain in Japan.
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