Almost eight months after the Xbox 360 went on sale in Japan, Microsoft is still struggling to crack the market. In the last week of June, sales totalled 1,897 units, compared with the PlayStation 2's 23,133 units, according to market tracker Media Create.
That placed it in the number-two position among consoles ahead of Nintendo's GameCube, which sold 1,002 units in the same period.
"Globally we are doing very well but Japan has always been tough," said Darren Huston, president and CEO of Microsoft's Japanese unit, at a company event today. "We launched early and with not enough Japan-specific content."
An optimistic start
When Microsoft launched the 360 in Japan last year, it hoped things were going to get better for its games business in the country.
The market, home of Sony's PlayStation console, had been a tough one for Microsoft, which saw its Xbox thoroughly outsold by the PlayStation 2. But it thought that the early start its Xbox 360 had over Sony's PlayStation 3 would give it the upper hand in the next round of the video-game wars.
After all, the Xbox 360 was the first next-generation console to launch. It was the first to support HD (high-definition) games and it debuted when HDTV sales were booming. Microsoft had also brought in some big-name Japanese developers to produce games with greater appeal to a local audience.
Of the games promised by Microsoft for Japan, some still haven't arrived. One of the most eagerly awaited, the N3 Ninety Nine Nights RPGs (role-playing game) by Tetsuya Mizuguchi of Q Entertainment, was released in April along with another popular local title, Final Fantasy XI.
The result of those launches has been a rise in Japanese sales, said Takashi Sensui, general manager of Microsoft's Xbox division in Japan. Sensui took up the post earlier this year.
"Since March we've had plenty of good titles coming out," he said. "RPGs are one of the biggest game segments in the market [in Japan] but it's taking a lot of investment to make large-scale RPGs."
Looking ahead, things are likely to get more competitive for Microsoft in Japan. Sony is due to launch its PlayStation 3 console in Japan on 11 November, roughly 11 months after the Xbox 360 went on sale. Many gamers appear to be waiting for the Sony console.
A poll conducted in May by Cross Marketing among 366 gamers found that 256 of them said they want a PlayStation 3. Of the respondents, who were allowed to select more than one next-generation consoles, 127 said they want Nintendo's forthcoming Wii console, and 93 said they want an Xbox 360.
Huston said Microsoft would continue to push original content as its key weapon, but he acknowledged that a tough battle lies ahead. "I can't say I'm beaming with confidence in Japan," he said.