Microsoft Expects Growth in Japan Xbox 360 Business

A strong game lineup will help, Sensui said. Its strength isn’t in the number of games but their quality and variety in all the most important genres, he said. Role-playing games are the most popular in Japan, a need Microsoft will be able to meet this holiday season, he said.

Backing up the new releases will be marketing stronger than last year’s, Sensui said. Microsoft ran a 2006 holiday campaign, but now third-party publishers are poised to play a far larger role with marketing efforts to back their own 360 releases, he told us.

Microsoft has bolstered its stable of Xbox 360 Japanese game developers, the company said at a news conference a week before the show (CED Sept 17 p11). Lending Xbox 360 support are ArcSystemWorks, whose first 360 title will be Castle Shikigami III, and Success, with Operation Darkness. Efforts by Microsoft to draw game developer support for 360 in Japan grew after the first Xbox flopped there with scant third-party publisher support. Last year Microsoft had success in Japan with game Blue Dragon, but 360 still lags far behind PS3 and market leader Nintendo Wii in installed base. In the U.S., 360 leads in market share among the three new consoles. No. 2 Wii is fast catching up and PS3 is far behind. Two star Japanese developers, Tomonobu Itagaki of Tecmo’s Team Ninja and Hironobu Sakaguchi of Mistwalker, joined Sensui onstage at the briefing to endorse 360. Team Ninja will bring out Ninja Gaiden 2 exclusively for 360, Itagaki said. Mistwalker’s coming RPG Lost Odyssey ships Dec. 6 in Japan and elsewhere in early 2008, Sakaguchi said.

Microsoft missed a golden opportunity to reach media from around the world at the show, where Nintendo again was a no-show. Sony had a wealth of new products and announcements at the show and a keynote by Sony Computer Entertainment Group CEO Kaz Hirai (CED Sept 21 p4).

Microsoft “didn’t mean to exclude” foreign media from its pre-show briefing, Sensui told reporters it assembled late last week. The timing resulted from scheduling problems because of a national holiday. Sensui didn’t use the Thursday night event to make announcements or give updates on Xbox 360 sales. Nor did he announce the Japan installed base for 360.

Microsoft doesn’t analyze 360 sales by region. And it’s hard to calculate how many systems sell in a particular month in Japan. Enterbrain and Media Create, the two major videogame data trackers there don’t get sales data from all retailers in the market. Each firm’s data often contradicts the other’s.

But more than 11.6 million 360s had sold worldwide by July, according to Microsoft. That’s believed to be a figure for units shipped. Website VGChartz.com projects 11.1 million total 360s sold through worldwide, about 440,000 in Japan. That put Nintendo’s Wii at the front of the pack with world sales of 11.78 million, 3.61 million in Japan. PS3 beats 360 in Japan, too, with 1.19 million, VGChartz.com said. The PS3’s world installed base badly trails its rivals’ at 4.64 million, according to VGChartz.

Microsoft likely have more significant news to report this week than anything it said at the Tokyo show. Its game sequel Halo 3, which ships Tuesday for Xbox 360, could sell in record-breaking first-day quantities, as Halo 2 did in 2004. GameStop called Halo 3 the fastest- selling game it has ever put up for preorder.

More than 300,000 unique gamers log onto Halo 2 to play online every day on Xbox Live, 2 1/2 years after its release, Jonty Barnes, head of production at Microsoft’s Bungie Studios and Halo 3 executive producer, said Friday at a show session. Microsoft released more maps for Halo 2 in the spring. “We really want to continue” to support the game, Barnes said, and he “hopes to repeat that with Halo 3.” The first two Halo games combined have sold more than 14.8 million units, he said. Halo 2 set entertainment industry history when it logged $125 million in U.S. sales within 24 hours of its November 2004, launch, he said. Updates to the latest entry include a “theater” function. Using it, players can study prior Halo 3 competition that’s been recorded, as with a sporting event, to improve their skills, said Barnes. A public beta test of Halo 3, held for about three weeks in May, drew more than 820,000 participants for more than 12 million hours of play, Barnes said. During the test Microsoft had to triple its server capacity to accommodate demand. The beta test revealed many bugs that Bungie fixed, convincing the company of the need to build beta testing over Xbox Live into the preparation for a game’s launch, Barnes said.

During the same conference session, Phil Spencer, general manager of Microsoft’s first-party publishing, said his company’s “future endeavors go beyond simple Xbox 360 shrink-wrapped product” as it looks to boost its sales in Japan and emerging European markets in particular, but he offered no specifics. Calling Japan “the home of videogames,” Spencer said “for us it’s important to maintain relationships” with its partners there. The Tokyo event is “an exciting show for us” and Japan is “an exciting market” for Microsoft, Spencer said.