The Little Red Yen

For those who game, Japan may be the most important country in the world. It’s also the least understood. Despite being one of the U.S.’s closest economic and political allies, one of the most culturally significant and the most Westernized country in Asia, to most people, Japan remains at best enigmatic, at worst downright crazy.

The enduring Japanese stereotype is still that of the mysterious, shifty traditionalist, captured in such ridiculous perfection in nonsense like the Sean Connery movie Rising Sun – a stereotype that reared its head in the days following the 360’s lackluster launch in Japan.

Suddenly, a thousand amateur market analysts sprung up overnight, each one with his explanation of why the Xbox was failing in Japan. The excuses ran the gamut, suggesting mild Japanese nationalism to outright xenophobia and hatred of American products, but they all focused on one thing: an irrational desire to buy Japanese.

“[The] Xbox will fail because it’s American. Japanese are only interested in flooding our markets with their products, but not accepting any of ours,” said a poster on a popular business site.

“Anyone who denies there is an anti non-Jap video game mentality in Japan is living in a fantasy world,” said another on a big gaming website.

After years of dominance by Japanese manufacturers, the arrival of Microsoft as a serious force in the game market has seen fanboy-ism take on a worrying new face – that of flag-waving, fist-pumping nationalism, an us-and-them mentality that is surely the exact opposite of what the international language of videogames should be inspiring.

For American gamers who had happily bought Japanese consoles, the failure of the Xbox brand in Japan was a slap in the face. Is there really a racist element to the Xbox’s lack of success? Or is it all down to software, and if it is, what is wrong with what the Xbox offers? Just what do the Japanese buy, and why?

Tainted Love
In search of an answer, I spoke to Hirokazu Hamamura, President of Enterbrain, the parent company of Japanese videogaming bible Famitsu.

“Unfortunately, the Xbox 360’s slump in Japan continues,” said Hamamura. “There are many reasons for this, but the biggest reason is that it lacked titles for Japanese tastes.

“Furthermore, the hype at the time was unfortunate. At the time of launch, the Nintendo DS was causing a sensation. Under the pressure of the extraordinary popularity of the DS, Xbox couldn’t create any kind of movement. In terms of timing, I think Microsoft were unlucky.”

Certainly, the 360’s launch coincided with the sudden rush for DS units. Was nationalism a factor?

“I don’t believe there’s any truth to that,” John Yang, a market analyst with Standard & Poors in Tokyo, told The Escapist. “Many non-Japanese products have done well in Japan, like luxury cars from Mercedes and BMW.”

Indeed, far from being a disadvantage, foreignness in Japan can lend a company a coolness factor that marketing can’t buy. Witness how iPods fly off the shelves, while brands by Sony and Toshiba gather dust. The Starbucks in Shibuya is reputedly the busiest in the world, and McDonalds outlets are everywhere. Disney is simply impossible to avoid, despite Japan being one of the world leaders in animation.

These companies distanced themselves from their competitors, tailoring their product to Japanese tastes. With the original Xbox, Microsoft tried to beat the PlayStation at its own game – and they lost spectacularly. The big-name titles Microsoft secured were ports of old PS2 titles everybody already owned, like Metal Gear Solid and Onimusha. The PS2 had the market sewn up long before Microsoft ever arrived.

In their desire to show up Sony with an ultimately botched simultaneous worldwide launch of the 360, Microsoft may have destroyed the one chance they had to recover.

“The titles we had hoped for [Blue Dragon and Lost Odyssey] weren’t available at launch time,” Kenichiro Yamazaki, the PR Manager for Microsoft Japan’s Xbox Division, told The Escapist. “We learned from the first Xbox that we did not offer enough titles that were of interest to Japanese gamers, and we’ve taken the necessary steps to resolve this issue.” But they launched without them to make that worldwide launch window.

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“It will be challenging for Microsoft to recover,” says Yang. “One crucial way for Microsoft to stir growth is to convince the market that Xbox is a home appliance. PS2 did very well because Sony was able to convince the market that the PS2 was a home appliance and a DVD player. For now, the Xbox is only selling itself as a game console, not a home appliance, hence any further growth is a challenge.”

Microsoft isn’t ready to throw in the towel just yet. “Our goal has never been to be the market leader in Japan,” says Yamazaki. “Our focus from the get-go has been on building long term success in Japan.”

Out of Line
One way they can do that is the 360’s superb Xbox Live service, which lets gamers all over the world connect to play with one another – and be insulted by 12-year-olds. But despite being one of the most broadband-connected countries in the world, Japanese customers are only starting to fall for online gaming the way American, Chinese and Korean gamers have. It is no coincidence that it took Microsoft, an American company, to open up online gaming on consoles.

“Xbox Live has been tremendously successful in Japan and in fact, the percentage of users connected to Xbox Live in Japan is not that far off from the percentage of users connected to Xbox Live in the U.S.,” Yamazaki said.

But this statistic is not representative of the general population. Given the small amount of 360s that have been purchased in Japan, it is no stretch to imagine that those buying are the gaming hardcore – not the average John Q. Tanaka.

And in comparison to Korea and China, where stories of gamers keeling over at their keyboards from playing too much Lineage are not uncommon, the popularity of strictly-online games in Japan still lags far behind traditional story-driven titles on consoles.

“The popularity of online games in [other parts of] Asia is due to the fact that packaged games just don’t make successful business,” says Hamamura. “It is only in network games, where there is little room for pirated versions to flourish, that a market can be built. On the contrary, the culture of packaged games in Japan far exceeds that of other countries. In particular, Japanese tend to like the story in games. I do believe the genre of online games, which are based on the enjoyment of communication, will gradually become more accepted and permeate in the future.”

This is the one area where Microsoft has the most experience – provided they supply it with software for Japanese tastes.

Root Beer or Squid
If Japan-oriented software is the answer, the obvious question is: Just what is Japan-oriented software, and why do Japanese gamers favor identikit RPGs and dating simulators over the young-male-targeted muscle games that the 360 specializes in?

In reality, asking why American games fail in Japan is the same as asking why schoolgirl dating sims fail in the U.S. Just as Americans like root beer and the Japanese like dried squid, some inexorable cultural differences still exist. The only question we can attempt to answer is where these cultural differences come from.

Although it is changing, Japan is still an incredibly homogenous, highly literate country. Hollywood movies do decent business, but of far more cultural impact – particularly to the younger age group that games have traditionally targeted – is Japanese-made manga and anime.

“The visual culture of Japanese games has its roots in anime and comics,” says Hamamura. “I believe that’s why games that have their roots in comics and anime easily become hits, rather than ones that try to recreate the real world. I believe that the success in Japan of RPGs in particular is due to those roots.

“There is also the view that America, which has Hollywood movies as the basis of its visual culture, has fundamentally different tastes.”

Arguably the most fundamental of those differences is that of the FPS genre, which dominates in the West yet barely make a dent in the Japanese sales charts.

“Perhaps the reason FPS games are not popular in Japan is down to a difference in lifestyle,” says Hamamura. “Japanese people have no guns around them in their life, so it could be that FPSes don’t connect with a desire to simulate reality.”

There is no gun culture in Britain or Canada, one might say, but FPSes are still equally popular there; but this would be a misreading of Hamamura’s words. Despite differing gun laws in Western countries, the Western media as a whole surrounds us with more guns than the NRA could ever hope to.

The latest Hollywood blockbuster, Casino Royale, is a perfect example. James Bond is the archetypal Western hero – he shoots to kill, takes no prisoners, and rarely lets moral considerations affect him. Bond himself is aging, but his replacement for the 21st century already exists, in 24’s Jack Bauer.

But while both of these heroes enjoy moderate success in Japan, there is no Japanese James Bond, no Japanese Jack Bauer. As evidenced by anime like Bleach or best-selling games like Dynasty Warriors, Japan has always been a culture of swords, not guns. Protagonists on Japanese dramas are decidedly less trigger-happy than in Western ones. Japanese youngsters are more likely to want to emulate the samurai manga Vagabond, a retelling of the classic Miyamoto Musashi tale, than James Bond.

Just what games the Japanese do want – and where the 360’s line-up falls down – is easily told from a reading of last year’s top 30: six games based on anime franchises, two Winning Eleven soccer games, a baseball game, two Tales games, a Square RPG, Pokémon, Mario and Gran Turismo. Factor in the DS games that blew away Microsoft’s hype and the 360’s anemic launch line-up – heavy on the FPSes and light on RPGs – and it’s easy to see Microsoft hardly had a hope.

Riding the Wave
Although Microsoft’s venture into Japan has been a failure to date, the company has deep pockets. Nationalism is unlikely to be a factor if Microsoft can overcome their past failures and carve out their own niche in the market, as Nintendo has done.

The Japanese game market is now buoyant with hope for the first time since 2004, when statistics showed that the domestic games market had contracted some 40 percent since 1997.

“Thanks to the DS, the industry has successfully created a new class of game fans,” says Hamamura. “This year, the so-called next-generation machines, PS3 and Wii, will be released, and 2006-2007 is expected to be the highest-selling year in a decade.

“After that, the total sales of hardware and software will decrease. Then, five years from now, when new machines come out again, there will be another swell. Looking at it from the long term, the game market will keep repeating this wave.”

In the end, that “mysterious Japanese” stereotype has held true – no one could have predicted that the DS would not only spoil the 360’s launch, but tap into a whole new market. Is there room in there too for Microsoft? Assuredly. But to quote John Connor, Sean Connery’s character in Rising Sun, they are already playing “that most American of games – catch-up.”

Gearoid Reidy comes from a land where neither root beer nor dried squid are considered consumable, and that’s just how he likes it. Find him at

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