The video game industry is fickle.  Partly because the genre is so new, and partly because it reinvents itself every few years.  The long standing staple of the industry, and of video game makers in general, is the home console.

By Robert Graves

The failing of a console is seen as the definitive death nail in a company’s coffin.  Never mind that industry juggernauts such as SEGA and even ATARI manage to solider on.  The perception is there, and in the hype based world of video games, perception is key.

There are three major markets in the video game industry: Japan, Europe, and North America.  Each has its own nuances and hard wired culture that present unique marketing challenges.  A hard lesson to learn in video games, one size does not fit all.

The Xbox is a great example of this.  The Microsoft console was built around the design of a PC and a great success in the North American market. In the video game world, the Xbox wasn’t a true competitor until it crossed the Pacific into Japan. It was an utter flop.  Indeed, the Xbox360 went on to struggle, selling 1.7 million at the time of this writing.

 

From day 1, Microsoft has been in a war of attrition.  In a PS2 dominated world, they quickly gained foothold as an alternative to Sony’s style and PC’s expensive and clunky entry point.  Xbox gave the world cool LAN parties.  Xbox360 continued the tradition, slowly wooing the Japanese market while solidifying its market share at home.  Sales were still dismal in Japan, but higher than ever before.

What then is the point.  Why should Microsoft try to invade the Japanese borders again? The Xbox One is even more localized to the North American region than any other previous console before it.  Many of its features only work inside the United States.  The most popular game to date is Titanfall – a First Person Shooter the Japanese are historically disgusted by.

None of this matters.  Microsoft could ship an empty Xbox One box to stores across Japan. But they have to ship something.  If they beat 2 million Xbox360 sales, its a win.  To stay relevant, to stay in the game, Microsoft MUST produce a console and they MUST sell it in Japan. If Microsoft does not sell the Xbox One in Japan, it will be perceived as an admission of failure.  Microsoft will never be able to shake that stigma, not in this industry. There is nothing in the unwritten rules that say it has to succeed.  Perception is king of the hype train.