At Osaka's Bic Camera, one of the city's largest electronics superstores, the games department is buzzing with shoppers. But while US stores this holiday season were teeming with gamers clamoring for Microsoft's new Xbox 360, consumers here were ignoring it in favor of the PlayStation 2 (PS2) and Nintendo game aisles.
"I'm not sure whether I will buy Xbox 360 or not, because it has very few games now," says Sagayama Yuichi. Akiyama Yuya simply shrugs his shoulders and says, "PS2 has the games that I want."
Ever since its 2002 release, Microsoft's Xbox has been a colossal sales flop in Japan. The company was hoping for some success with its Xbox 360, released in Japan Dec. 10 - some months ahead of the PlayStation 3 and Nintendo Revolution. But sales numbers indicate that it is even less popular than its predecessor.
While Japanese consumers have been turned off by its lack of games and the clumsy look of its original console, experts say Microsoft's failure to gauge cultural tastes has played a major role in allowing the Japanese market to slip out of its grasp.
"The main problem is that major corporations believe that all problems can be solved with hard work and money. And this is not always the case ... cultural products are very elusive," says Gonzalo Frasca of the IT University of Copenhagen.
Indeed, Microsoft has produced games geared toward Americans, such as the WWII combat simulator Call of Duty II, currently the bestselling Xbox 360 game in the US.
"It caters to a Western audience," says Ben Hourigan, a PhD candidate at Australia's University of Melbourne who is in Japan researching the political aspects of role-playing video games. "The countries that were once the allied powers [such as the US] have a very polarized view of WWII ... 'we were the good guys, they were the bad guys' kind of thing. And that comes out in their video games."
Such games don't appeal to the Japanese, he says. And it's that failure to appeal, experts note, that has led to weak Xbox sales, which in turn discouraged Japanese companies from developing games for it.
Despite America's place as the world's leading pop-culture exporter, no US company manufactured consoles for almost two decades after the market for Atari crashed in 1983-84. Since then, all the major console makers - Nintendo, Sega, NEC, and Sony - have been Japanese, whereas North America and Europe's strengths have been game development. The Xbox's 2001 arrival in North America broke that trend.
But despite its almost overnight success in the US, Xbox hasn't been a hit in Japan. In 2005, the Xbox 360 sold 81,770 units in Japan, while the original Xbox sold 123,000 units in the first three days of its 2002 release, according toFamitsu/Enterbrain, Inc.And Microsoft controls only 5 percent of the Japanese market, compared with an estimated 80 percent for Sony.
"[Microsoft] thought that whatever they did in America would work in Japan," says Mr. Hourigan. But neither the Xbox nor the 360 have offered many role-playing games (RPGs), which are "absolutely crucial to the success of any game console in Japan," he explains. The Dragon Quest series being the most popular RPG in Japan, it is available neither on the Xbox nor the 360.
Japanese game development studio Mistwalker is currently developing RPGs for Xbox 360 however, which are expected to hit stores in mid-2006.
"When these games come out in Japan," says Hourigan, "there are going to be a lot of fans of Final Fantasy and Dragon Quest who will have a reason to buy Xbox 360." The firm is employing some very big names, including Final Fantasy art director Hideo Minaba.
Appealing a generation that has grown up on anime and manga, Japanese games often employ the skills of graphic artists who have become legends in Japan.
In addition to showcasing artwork, Japanese games also appeal to that culture's special emphasis on relationships. "There is a sentimental focus on human relationships in some Japanese games," says Hourigan. "Generally, Japanese popular culture has a sentimentality that Western pop culture doesn't have."
But despite low sales numbers, some analysts feel Microsoft has actually made a noteworthy accomplishment in Japan. "They were able to jump into a very closed market and become a major player," says Mr. Frasca. "Sure, they burned a ton of cash doing it but, still, it is a major achievement."