Why Xbox Failed in Japan (Eurogamer)

Terrific Eurogamer article on Xbox’s failure in the home of Nintendo and Sony. A couple of excerpts are interesting:

Microsoft’s Xbox team received all sorts of feedback from Japan. Ed Fries, then vice president of Microsoft Game Studios and one of the co-creators of Xbox, remembers being confused by the advice he was given. An earlier PC game Microsoft had brought to Japan had a main character with only a few fingers, and Microsoft was told that was a taboo because it had a connection to the Yakuza cutting fingers off.

When it came to the Xbox, the befuddling feedback continued. “We were told we couldn’t call it the Xbox because X is the letter of death,” Fries remembers. “We were told we couldn’t make it black because black is the colour of death. I was like, isn’t the PlayStation black? Rules that apply to you as an outsider don’t necessarily apply to insider products.”

The so-called cultural divide between East and West is an eternally vexing and yet quite straight-forward phenomenon. It can be – and often is – both overplayed and under-appreciated. The right conclusion is drawn in the article, again by Ed Fries:

“I would take a realistic approach to it. Think about anime culture in the US. That’s pure Japanese culture influencing the culture in America. And likewise our culture can influence their culture. And our products can influence them. We should be what we are. That doesn’t mean we shouldn’t work with Japanese developers and develop Japanese content. But we should be what we are and be our culture, and to whatever extent they’re willing to accept that, that’s great. That’s my attitude.”

All this talk about the Japanese culture of respect and the supposedly crucial relationship-building is certainly relevant but also misleading. Microsoft could have taken every Japanese game developer to hostess bars and karaokes every night for three years and Xbox would still have failed; short of giving away 360s free to millions of Japanese gamers, it would not have gained the traction Microsoft was looking for. Microsoft tried even harder than the article mentions: it secured – I don’t know how – exclusivity (timed or otherwise) on not just the usual suspects like the Ace Combat franchise and the Tales series, but also Japan-only otaku favourites like Idolmaster and Dream Club. It pried open Sony’s fingers from sacred treasures like Final Fantasy and Devil May Cry, and got Square to release not one but three huge and hugely expensive exclusive RPGs in The Last Remnant, Infinite Undiscovery and Star Ocean: The Last Hope (two of them would later be released for PS3). Microsoft tried harder than was perhaps necessary to crack the Japanese market, and their failure wasn’t because they misunderstood the culture or had bad meetings with rock star developers.

Some will attribute Xbox’s failure in Japan to xenophobia or patriotism, and while not completely without currency, it fails to provide the big-picture explanation. Asking Japanese people to buy an Xbox was akin to asking Germans to buy a Camaro or a Mustang, when companies from their very own country made BMWs and Audis. Similarly, HTC and Motorola have closed down their business in Korea, not just because Koreans naturally only want to buy Korean products, but because Samsung makes great smartphones. The equation is this: given two products of equal quality, if one is made by a domestic company, consumers will more likely gravitate towards that product. This is due to more than jingoism: often the domestic company offers better warranty, better and more friendly after-sale service, quicker repairs, and of course more marketing exposure.
Let’s use another example: Apple is enormously popular in Japan, and iPhones and iPads are the market leaders in that country, even though it’s an American company. Japan has a long heritage of phone manufacture. Sony, Toshiba, Sharp, Panasonic, and Fujitsu have been making phones for years, yet Japanese consumers are buying iPhones. This isn’t because Apple somehow understood the Japanese culture better than all the other American companies and this enabled them to gain the foothold. It goes back to Fries’s conclusion: Apple did what they did best, and released a product that was more desirable than anything that domestic companies could offer. Same with Korea: Samsung’s smartphones have 70% marketshare and drove all the other companies out, but iPhone 5’s release just over a week ago saw people form the kind of long lines that Samsung and LG can only dream of, even in their home turf. The lesson, then, is this: if a product is compelling enough, it will sell, even in supposedly foreigner-shy markets. Or put another way, has Xbox 360 been that much more attractive than PS3 to overcome the decade of trust, goodwill and record of quality that Sony had built with PS1 and PS2? When all is said and done, Xbox 360 and PS3 have been much of the same thing, give or take a Halo or an Uncharted, and the global sales record – 70 million for the former versus high-60 million for the latter – reflects that.


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