these people are waiting to buy the Xbox
these people are waiting to buy the Xbox

one console fans line up around the
one console fans line up around the

world for the newest gaming consoles and
world for the newest gaming consoles and

products but there's one place that's
products but there's one place that's

never seen a reaction like this for Xbox
never seen a reaction like this for Xbox

Japan in the early 2000s when Microsoft
Japan in the early 2000s when Microsoft

launched the Xbox Japan was the gaming
launched the Xbox Japan was the gaming

juggernaut of the world Japan was home
juggernaut of the world Japan was home

to three big console makers Nintendo
to three big console makers Nintendo

Sega and Sony and Japanese game
Sega and Sony and Japanese game

developers were considered the best and
developers were considered the best and

most revolutionary on the planet around
most revolutionary on the planet around

the time as a launching the Xbox
the time as a launching the Xbox

Japanese game developers as the most
Japanese game developers as the most

important in the world the success of
important in the world the success of

any new game platform depended in large
any new game platform depended in large

measure on whether or not you can get
measure on whether or not you can get

the best Japanese game developers and
the best Japanese game developers and

their titles more importantly on your
their titles more importantly on your

platform so when Microsoft launched the
platform so when Microsoft launched the

Xbox in 2001 the gaming world was
Xbox in 2001 the gaming world was

suspicious of an American console made
suspicious of an American console made

by a company known for its software not
by a company known for its software not

its hardware they were kind of perceived
its hardware they were kind of perceived

as the bad guy coming into the Japanese
as the bad guy coming into the Japanese

market kind of invading the homeland and
market kind of invading the homeland and

competing with Sony and Nintendo all
competing with Sony and Nintendo all

three launches of the Xbox were a total
three launches of the Xbox were a total

failure in Japan but at the same time
failure in Japan but at the same time

since its debut in 2001 the Xbox has
since its debut in 2001 the Xbox has

become one of the biggest consoles
become one of the biggest consoles

globally the release of the Xbox one in
globally the release of the Xbox one in

2013 was a huge success for Microsoft
2013 was a huge success for Microsoft

for the three years following its
for the three years following its

release the Xbox one was the world's
release the Xbox one was the world's

second most popular gaming console of
second most popular gaming console of

its generation the Xbox one has sold
its generation the Xbox one has sold

almost forty six point nine million
almost forty six point nine million

units worldwide through the second
units worldwide through the second

quarter of 2019 but only a tiny fraction
quarter of 2019 but only a tiny fraction

of global sales just 0.3% have been in
of global sales just 0.3% have been in

Japan
Japan

so why has the Xbox never caught on in
so why has the Xbox never caught on in

Japan despite its worldwide acclaim
Japan despite its worldwide acclaim

elsewhere
elsewhere

when Microsoft started developing the
when Microsoft started developing the

Xbox in 1999 it wasn't known as a gaming
Xbox in 1999 it wasn't known as a gaming

company its reputation was all about PCs
company its reputation was all about PCs

its office products and a big antitrust
its office products and a big antitrust

lawsuit Microsoft had a PC gaming
lawsuit Microsoft had a PC gaming

business in the late 90s known for
business in the late 90s known for

Microsoft Flight Simulator and Age of
Microsoft Flight Simulator and Age of

Empires developing the Xbox was all part
Empires developing the Xbox was all part

of Microsoft's plan to bring its
of Microsoft's plan to bring its

technology into consumers homes Sony was
technology into consumers homes Sony was

the leader in the consumer electronics
the leader in the consumer electronics

market in the early 2000s its
market in the early 2000s its

PlayStation 2 was considered a threat to
PlayStation 2 was considered a threat to

Microsoft for its potential to replace
Microsoft for its potential to replace

PCs as a way to get internet access at
PCs as a way to get internet access at

home
home

Bill Gates's motivation was more about
Bill Gates's motivation was more about

maintaining Microsoft dominance and
maintaining Microsoft dominance and

position and ecosystem of software bill
position and ecosystem of software bill

really got it because games are software
really got it because games are software

that is entertainment that can stand
that is entertainment that can stand

right alongside a movie Denyce Chowdhury
right alongside a movie Denyce Chowdhury

a designer who worked on the original
a designer who worked on the original

Xbox remembers that Microsoft got into
Xbox remembers that Microsoft got into

gaming as a challenge to Sony Bill Gates
gaming as a challenge to Sony Bill Gates

wanted to get Microsoft's technology
wanted to get Microsoft's technology

into Sony consoles so he went to Japan
into Sony consoles so he went to Japan

and suggested a partnership Microsoft
and suggested a partnership Microsoft

Bill Gates specifically saw an
Bill Gates specifically saw an

opportunity to take something that was
opportunity to take something that was

established that Sony was already doing
established that Sony was already doing

the PlayStation and sort of integrate
the PlayStation and sort of integrate

technology and software that Microsoft
technology and software that Microsoft

was the master of which was home
was the master of which was home

computing and kind of bring that
computing and kind of bring that

together sony was not interested
together sony was not interested

sony was basically like thanks but no
sony was basically like thanks but no

thanks and Bill Gates said okay then
thanks and Bill Gates said okay then

I'll do it myself
I'll do it myself

video game journalist Dean Takahashi
video game journalist Dean Takahashi

thinks companies were weary of working
thinks companies were weary of working

with Microsoft because of its antitrust
with Microsoft because of its antitrust

lawsuits
lawsuits

already and I trust cases happening
already and I trust cases happening

against Microsoft and everybody knew
against Microsoft and everybody knew

that if she if you sort of let them in
that if she if you sort of let them in

the door it was kind of like a church of
the door it was kind of like a church of

course you might lose control of your
course you might lose control of your

business the way say the PC makers like
business the way say the PC makers like

IBM had lost control of the business
IBM had lost control of the business

this wasn't the first time Microsoft
this wasn't the first time Microsoft

would hear a no from a Japanese company
would hear a no from a Japanese company

on the Xbox
on the Xbox

Chowdhury says Mitsumi the company that
Chowdhury says Mitsumi the company that

made circuit boards for Sony's
made circuit boards for Sony's

PlayStation controllers at the time
PlayStation controllers at the time

refused to make a circuit board for
refused to make a circuit board for

Microsoft Mitsumi could have jeopardized
Microsoft Mitsumi could have jeopardized

its relationship with Sony by giving
its relationship with Sony by giving

Microsoft the same technology Mitsumi
Microsoft the same technology Mitsumi

didn't respond to CNBC's requests for
didn't respond to CNBC's requests for

comment
comment

so child you had to use a larger circuit
so child you had to use a larger circuit

board for the Xbox controller Microsoft
board for the Xbox controller Microsoft

moved quickly to launch the Xbox the
moved quickly to launch the Xbox the

consoles hit shelves in the US in
consoles hit shelves in the US in

November 2001 and in Japan in February
November 2001 and in Japan in February

2002 later than expected Microsoft has
2002 later than expected Microsoft has

released three consoles in the Xbox
released three consoles in the Xbox

series the Xbox the Xbox 360 and the
series the Xbox the Xbox 360 and the

Xbox one while all three console
Xbox one while all three console

releases failed in Japan the Xbox was a
releases failed in Japan the Xbox was a

huge hit elsewhere in the world
huge hit elsewhere in the world

Microsoft eventually secured the coveted
Microsoft eventually secured the coveted

number one spot in the global market
number one spot in the global market

from 2011 to 2012 with the Xbox 360
from 2011 to 2012 with the Xbox 360

nobody expected we were going to be a
nobody expected we were going to be a

hit product in Japan we understood what
hit product in Japan we understood what

the playing field was like and we were
the playing field was like and we were

just trying to not embarrass ourselves
just trying to not embarrass ourselves

Sega and Nintendo and Sony dominated the
Sega and Nintendo and Sony dominated the

video game market in Japan when
video game market in Japan when

Microsoft came onto the scene before the
Microsoft came onto the scene before the

Xbox launched sony and nintendo devices
Xbox launched sony and nintendo devices

accounted for basically 100% of the
accounted for basically 100% of the

global video game market and not much
global video game market and not much

has changed since then as of 2019 sales
has changed since then as of 2019 sales

of the Xbox don't even begin to rival
of the Xbox don't even begin to rival

that of a PlayStation 4 or Nintendo
that of a PlayStation 4 or Nintendo

switch there are three main reasons the
switch there are three main reasons the

Xbox console didn't sell well in Japan
Xbox console didn't sell well in Japan

today game developers are from all over
today game developers are from all over

the world but in the early 2000s most of
the world but in the early 2000s most of

the best developers were Japanese and at
the best developers were Japanese and at

the time the Xbox launched Japanese game
the time the Xbox launched Japanese game

creators were hesitant to put their
creators were hesitant to put their

content on a console that wasn't popular
content on a console that wasn't popular

in Japan Japanese gamers and developers
in Japan Japanese gamers and developers

favored role-playing games over the
favored role-playing games over the

shooter style games that were more
shooter style games that were more

common in the u.s. in order to convince
common in the u.s. in order to convince

gamers to switch to Xbox Microsoft
gamers to switch to Xbox Microsoft

needed big-name Japanese developers to
needed big-name Japanese developers to

defect from Sony and Nintendo and
defect from Sony and Nintendo and

developers saw pros and cons in
developers saw pros and cons in

defecting to Microsoft the graphics
defecting to Microsoft the graphics

power of the Xbox and his ability to
power of the Xbox and his ability to

create realistic games exceeded other
create realistic games exceeded other

consoles at the time we were pretty
consoles at the time we were pretty

successful convincing them that Xbox
successful convincing them that Xbox

represented a platform would enable them
represented a platform would enable them

to do new and interesting things and
to do new and interesting things and

most importantly would enable them to
most importantly would enable them to

sell those games to a Western audience
sell those games to a Western audience

but for many developers the
but for many developers the

disadvantages outweighed
disadvantages outweighed

potential upside some game creators like
potential upside some game creators like

the Xbox's hard drive which was faster
the Xbox's hard drive which was faster

than the PlayStation cd-rom but they
than the PlayStation cd-rom but they

worried the high cost of Microsoft's
worried the high cost of Microsoft's

technology would drive consumers away
technology would drive consumers away

and then there was loyalty it was really
and then there was loyalty it was really

difficult to convince a developer who'd
difficult to convince a developer who'd

already had a relationship with Sony and
already had a relationship with Sony and

Nintendo to take a gamble on Microsoft's
Nintendo to take a gamble on Microsoft's

unproven Xbox the second problem is that
unproven Xbox the second problem is that

the Xbox was just too big it was huge
the Xbox was just too big it was huge

and Japanese homes were small that was
and Japanese homes were small that was

sort of one of the first things that
sort of one of the first things that

made the Japanese people wonder is this
made the Japanese people wonder is this

company know what it's doing the
company know what it's doing the

controller was another problem
controller was another problem

PlayStation used a folded circuit board
PlayStation used a folded circuit board

made by Mitsumi in its controller it was
made by Mitsumi in its controller it was

a single circuit board cut in half and
a single circuit board cut in half and

stacked so that it was smaller than a
stacked so that it was smaller than a

typical circuit board Microsoft's team
typical circuit board Microsoft's team

asked Mitsumi for the same circuit and
asked Mitsumi for the same circuit and

Mitsumi simply said no they would not
Mitsumi simply said no they would not

budge they would not give us the same
budge they would not give us the same

circuit board since Microsoft couldn't
circuit board since Microsoft couldn't

get the folded circuits from Mutsumi it
get the folded circuits from Mutsumi it

had to make do with large circuit boards
had to make do with large circuit boards

meaning the controller was bulky that
meaning the controller was bulky that

controller never actually launched in
controller never actually launched in

Japan so we can't know how Japanese
Japan so we can't know how Japanese

consumers would have reacted to it the
consumers would have reacted to it the

Xbox team instead expedited production
Xbox team instead expedited production

on a smaller controller called the
on a smaller controller called the

controller s4 the Japanese launch
controller s4 the Japanese launch

Chowdhury says even Microsoft's own team
Chowdhury says even Microsoft's own team

in Japan refused to endorse the Xbox
in Japan refused to endorse the Xbox

because of its bulky design finally
because of its bulky design finally

timing was also a problem for Microsoft
timing was also a problem for Microsoft

the company delayed its Japan launch to
the company delayed its Japan launch to

February 2002 that meant that the
February 2002 that meant that the

console and game developers missed the
console and game developers missed the

crucial holiday period in Japan when
crucial holiday period in Japan when

kids got money from family members to
kids got money from family members to

celebrate the new year
celebrate the new year

the Xbox 360 was Microsoft's most
the Xbox 360 was Microsoft's most

successful console with Japanese
successful console with Japanese

consumers so what made it less of a flop
consumers so what made it less of a flop

in Japan with the Xbox 360 M Microsoft
in Japan with the Xbox 360 M Microsoft

tried to address a few problems that had
tried to address a few problems that had

with the Xbox first Microsoft planned to
with the Xbox first Microsoft planned to

launch the console ahead of a holiday
launch the console ahead of a holiday

season and before Sony launched its
season and before Sony launched its

competitor the PlayStation 3 Microsoft
competitor the PlayStation 3 Microsoft

also worked with a Japanese design for
also worked with a Japanese design for

him on the new console and collaborated
him on the new console and collaborated

with Japanese creators to make games for
with Japanese creators to make games for

the Xbox but that didn't make a dent in
the Xbox but that didn't make a dent in

Playstations hold on Japan sales in
Playstations hold on Japan sales in

Japan of a PlayStation 3 which launched
Japan of a PlayStation 3 which launched

in 2006 vastly outnumbered sales of the
in 2006 vastly outnumbered sales of the

Xbox 360 which launched one year earlier
Xbox 360 which launched one year earlier

Microsoft's next console the Xbox one
Microsoft's next console the Xbox one

also had a strong start when it was
also had a strong start when it was

released in 2013 Microsoft sold more
released in 2013 Microsoft sold more

than 2 million of the Xbox one consoles
than 2 million of the Xbox one consoles

globally in 18 days breaking a record
globally in 18 days breaking a record

for the company but in Japan the Xbox
for the company but in Japan the Xbox

ones are yet another lackluster response
ones are yet another lackluster response

of the 46 point nine million Xbox one
of the 46 point nine million Xbox one

sold worldwide through the second
sold worldwide through the second

quarter of 2019 less than half of a
quarter of 2019 less than half of a

percent of them have been in Japan for
percent of them have been in Japan for

comparison PlayStation 4 has sold ninety
comparison PlayStation 4 has sold ninety

nine point eight million units globally
nine point eight million units globally

through q2 2019 with eight point six
through q2 2019 with eight point six

percent of them in Japan in a statement
percent of them in Japan in a statement

to CNBC Microsoft said Japan remains an
to CNBC Microsoft said Japan remains an

important part of our global gaming
important part of our global gaming

community and a major contributor to
community and a major contributor to

Microsoft's future plans we're committed
Microsoft's future plans we're committed

to bringing innovative and homegrown
to bringing innovative and homegrown

content from Japan's leading game
content from Japan's leading game

creators to a global audience
creators to a global audience

but Microsoft's inability to appeal to
but Microsoft's inability to appeal to

Japanese consumers may be the least of
Japanese consumers may be the least of

its problems right now global sales of
its problems right now global sales of

the Xbox one have been lackluster as
the Xbox one have been lackluster as

users shift more to mobile and streaming
users shift more to mobile and streaming

games
games

analysts say is a problem impacting all
analysts say is a problem impacting all

console makers in Microsoft's earnings
console makers in Microsoft's earnings

release for the quarter ended June 30th
release for the quarter ended June 30th

2019 the company said Xbox hardware
2019 the company said Xbox hardware

revenue declined 48 percent primarily
revenue declined 48 percent primarily

due to a decrease in volume of consoles
due to a decrease in volume of consoles

sold experts say Microsoft is adapting
sold experts say Microsoft is adapting

to a video game future that's not
to a video game future that's not

dependent on hardware sales by selling
dependent on hardware sales by selling

subscriptions to game libraries why is
subscriptions to game libraries why is

the Xbox 360 doing so well or wise are
the Xbox 360 doing so well or wise are

other people's things doing well it's
other people's things doing well it's

that software capability and that's a
that software capability and that's a

bet that we made at the beginning of the
bet that we made at the beginning of the

company in fiscal year 2018
company in fiscal year 2018

Gaming revenue increased 14% compared to
Gaming revenue increased 14% compared to

fiscal year 2017 driven by Xbox software
fiscal year 2017 driven by Xbox software

and services growth Microsoft noted that
and services growth Microsoft noted that

Xbox hardware revenue was lower
Xbox hardware revenue was lower

Microsoft's 2018 annual report shows its
Microsoft's 2018 annual report shows its

shift away from hardware dependency the
shift away from hardware dependency the

surge in popularity of streaming gaming
surge in popularity of streaming gaming

has fundamentally changed Microsoft's
has fundamentally changed Microsoft's

relationships with one of its longtime
relationships with one of its longtime

rivals Microsoft and Sony made a
rivals Microsoft and Sony made a

surprising announcement in May 2000 19
surprising announcement in May 2000 19

they're working together to develop game
they're working together to develop game

streaming technology using Microsoft's
streaming technology using Microsoft's

cloud cloud gaming allows players to use
cloud cloud gaming allows players to use

any device with an internet connection
any device with an internet connection

to play games and Microsoft has made
to play games and Microsoft has made

several big moves in the space including
several big moves in the space including

plans for a new cloud streaming service
plans for a new cloud streaming service

called Project X cloud that would allow
called Project X cloud that would allow

users to stream their entire Xbox one
users to stream their entire Xbox one

libraries to mobile devices the
libraries to mobile devices the

partnership comes as giants like Google
partnership comes as giants like Google

are getting into gaming by developing
are getting into gaming by developing

its own cloud gaming service that
its own cloud gaming service that

represents a seismic shift in video
represents a seismic shift in video

games with faster internet speeds games
games with faster internet speeds games

can be played without a console on a
can be played without a console on a

cell phone or a computer cloud gaming is
cell phone or a computer cloud gaming is

projected to be less than 2% of the
projected to be less than 2% of the

forecast total games market by 2023 but
forecast total games market by 2023 but

Japan is poised to be a leader there in
Japan is poised to be a leader there in

2018 Japanese consumers accounted for
2018 Japanese consumers accounted for

about 46 percent of the 387 million
about 46 percent of the 387 million

dollars consumers spent on cloud gaming
dollars consumers spent on cloud gaming

worldwide Microsoft knew Japan was going
worldwide Microsoft knew Japan was going

to be its most challenging market but
to be its most challenging market but

blackly says sales figures aren't the
blackly says sales figures aren't the

only way to measure the market in the
only way to measure the market in the

long run Microsoft didn't mean Japanese
long run Microsoft didn't mean Japanese

consumers to make billions of dollars
consumers to make billions of dollars

when the console launched it was crucial
when the console launched it was crucial

for Microsoft to get Japanese game
for Microsoft to get Japanese game

developers on board but Japanese
developers on board but Japanese

consumers were less of a priority the
consumers were less of a priority the

issue with Japan was never the amount of
issue with Japan was never the amount of

revenue that are represented the issue
revenue that are represented the issue

was the amount of revenue that the games
was the amount of revenue that the games

from Japanese developers represented
from Japanese developers represented

blackly says the Xbox changed the
blackly says the Xbox changed the

philosophy on game development you know
philosophy on game development you know

one of the things about game consoles
one of the things about game consoles

prior to Xbox was that the hardware is
prior to Xbox was that the hardware is

arcane Xbox had a different philosophy I
arcane Xbox had a different philosophy I

really had the
really had the

idea that the biggest market could be
idea that the biggest market could be

addressed and can be captured by
addressed and can be captured by

Microsoft through democratizing game
Microsoft through democratizing game

development through making the tools of
development through making the tools of

game development widely available easier
game development widely available easier

you
you