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Sony’s PlayStation Reportedly Losing Faith in Japan While Microsoft Seeks Acquisitions

Xbox Series X PlayStation 5 Japan

PlayStation employees and developers are reportedly losing faith in Japan as a market, while Microsoft is seeking to seize it with acquisitions.

Bloomberg report discusses how Microsoft are attempting to attract more consumers in Japan, while dissension and doubt is growing with Japanese Sony employees.

Bloomberg cites Sony employees who wished to not be named, stating that the company had begun to focus more on the US after the PlayStation 4 had been disappointing in Japan.

Citing Famitsu, Bloomberg report that the PlayStation 4 sold less than 10 million units in Japan. This was despite global sales of the console reaching over 113 million (citing Sony). Finally, Macquarie Group Ltd. analyst Damian Thong stated that 35% of Sony’s video-game revenue came from the US, compared to 10% from Japan.

Bloomberg had previously reported numerous claims from anonymous sources familiar with the matter or were employees; stating that Sony were struggling to find parts for the PlayStation 5, and meeting fluctuating production goals [1234]. Sony Interactive Entertainment (SIE) would later deny these claims.

Likewise, Sony spokeswoman Natsumi Atarashi denied these fresh claims. She reportedly stated (in Bloomberg’s words) “any suggestion that Sony is shifting its focus away from Japan is incorrect and doesn’t reflect the company’s strategy.” 

Atarashi noted that the PlayStation 5 was not only launching first in Japan, but that Sony’s “home market remains of utmost importance.” It should be noted that Japanese fans were not happy with Sony’s decision to switch the X and O commands to the western standard, and two major PlayStation 5 livestreams premiering at 5 a.m. JST.

More doubt about Sony’s focus can be seen in late December 2018. SIE Japan Asia President Atsushi Morita stated the then recent spate of censorship of anime-styled sexual content on PlayStation 4 games had been to meet global standards.” This censorship was seemingly forced up Japanese developers.

A “senior figure inside PlayStation headquarters in San Mateo, California” (who did not wish to be named), told Bloomberg of their frustrations of the Japanese marketing team failing to sell more PlayStation 4 units.

According to several employees of PlayStation Japan, this resulted in the Japanese office being (in Bloomberg’s words) “sidelined” when it came to planning the promotion of the PlayStation 5. Employees from Tokyo told Bloomberg they have been waiting for instructions.

Former employees also told Bloomberg that the Japanese developer support teams have been reduced by a third “from their peak,” with rolling contracts not being renewed at Japan Studio.

Employees from the California headquarters told Bloomberg that the US office believes (in Bloomberg’s words) “the PlayStation business doesn’t need games that only do well in Japan.” 

Morningstar Research analyst Kazunori Ito told Bloomberg “It’s analyst consensus that PlayStation no longer sees the Japan market as important. If you want to know their take on the Japanese market, you need to ask about it because otherwise Sony wouldn’t talk about it.”

Tokyo game consultant Serkan Toto had simillarly damning predictions for PlayStation’s future in Japan.

“Many PlayStation 4 owners in Japan would eventually move to the PlayStation 5, but that would largely depend on how strong the PlayStation team in Tokyo will be in pushing the needs of Japanese customers to the American headquarters. Considering the current power balance between the U.S. and Japan, I can’t expect much, unfortunately.”

Local retailers also told Bloomberg they had not received more first-batch PlayStation 5 units compared to the PlayStation 3. This was despite the PlayStation 3’s initially limited production run. As aforementioned however, SIE may have had manufacturing issues brought about by the coronavirus pandemic.

In spite of this, SIE aims to sell over 7 million PlayStation 5 units this year; greater than the PlayStation 4 in its launch year. This was further elaborated by Sony Chief Financial Officer Hiroki Totoki, stating the goal was over 7.6 million units in five months; and to ultimately sell equal to the PlayStation 4 lifetime sales (113.5 million units at this time of writing).

 

Comparatively, Head of Xbox Phil Spencer stated at Tokyo Game Show 2020 that Japan is their fastest growing install base.” Despite this, Bloomberg note the Xbox brand has (in their words) “virtually zero presence in the country;” with Xbox One sales this year until November being 0/1% of console sales (10.1% for PlayStation 4, and 89.9% for Nintendo Switch; citing Famitsu).

Analyst Hideki Yasuda from the Ace Research Institute in Tokyo told Bloomberg that Microsoft had the chance to strike big, and Sony could lose out on their home turf. “The Xbox has a chance to make Japan its second-largest market after the U.S. if it takes the right steps for years to come. Sony’s attention is drifting away and fans have started to notice that.” 

Yasuda further theorized that Microsoft will focus on the Xbox Series S in the region, as prior consoles had been criticized for being too large for Japanese living rooms.

In addition; while Sony have reportedly been giving Japanese developers the cold shoulder, Sarah Bond of Japanese Xbox Relations states the company have been reaching out to Japanese developers. One of these includes Koei Tecmo Games, with president Hisashi Koinuma willing to release more games on Xbox consoles if the company shows continued interest in Japan.

Microsoft are also reportedly interested in acquiring more Japanese companies. While none of them are “big names,” anonymous individuals told Bloomberg “several Japan-based game developers, from small to big, said it had approached them about buying their businesses.”

 

Despite this, game Serkan Toto had little praise for either company; instead thinking Nintendo will rule the roost. However, Microsoft may have made the right first step.

“Many PlayStation 4 owners in Japan would eventually move to the PlayStation 5, but that would largely depend on how strong the PlayStation team in Tokyo will be in pushing the needs of Japanese customers to the American headquarters. Considering the current power balance between the U.S. and Japan, I can’t expect much, unfortunately.”

[…] “Microsoft will continue to have a hard time in Japan, and I don’t see any reason why the next Xbox should do better in Japan than the previous models. All signs point that for the next years, Nintendo will stay king in Japan, and I really don’t understand why Microsoft is still so obsessed with Japan.

“Microsoft won’t be able to take Sony’s position as No. 2 in Japan anytime soon, but at least it has started to make changes. A big tide always starts with a small change.”

Image: Xbox, PlayStation

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Ryan Pearson

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Taking his first steps onto Route 1 and never stopping, Ryan has had a love of RPGs since a young age. Now he's learning to appreciate a wider pallet of genres and challenges.