Microsoft CEO Satya Nadella appeared on CNBC this week to talk about the future of the company, including what's next for the Xbox team. Of course, this discussion led to questions about the Activision Blizzard acquisition, and how Microsoft is responding to the current regulatory approval processes going on around the world.
In response to a question about how confident Microsoft is of the deal going through, Nadella went on a bit of a tangent about how regulators — and the industry generally — should look at how much market share Japan has in the video game industry. Here's what the Microsoft CEO had to say on the matter:
"If they [the regulators] really seriously think about competition, they have to really reflect on 'is this going to be helpful to bring more competition?'. Right, think about this, there are people who make more money in gaming who don't even build games. Maybe we should look at that.
Then, even if you look at the console market, we should probably look at Microsoft's share of the console market in Japan as perhaps a question that somebody should ask and say, 'oh, wow, I wonder why that is, that's [a small share], maybe they should actually start competing more [in Japan].'
So, I hope that the regulators take an approach that is going to truly be beneficial to gamers, it's going to be beneficial to all publishers..."
Of course, Activision Blizzard isn't exactly known for its Japanese content, but clearly, Microsoft believes getting the company and its IP on board would help Xbox close the gap on Nintendo and Sony, driving growth in the region.
However, shortly after Nadella's televised appearance, the UK CMA published its latest report on the acquisition, and it's not a very positive outlook. While the outcome of the authority's investigation is still very much up in the air, the regulator has said that the deal could be "harmful" to the industry, even proposing such moves as removing Call of Duty from the purchase altogether.
For now, the investigations continue as Microsoft pushes to get this deal over the line. Maybe this calendar year we will see an end to the ActiBlizz saga? We can certainly hope so.
What do you make of these comments? Will this deal have an impact on Japan? Let us know your thoughts.
Comments 34
OK this is pointless.
For one, ABK definitively is not going to move the needle in Japan, maybe a WoW but that wont actually help XBox or GamePass (that is never going to be part of Game Pass, guys, stop expecting WoW subs to become part of GP, you will only be disappointed.)
At the same time, regulatory agencies should not care at all about what the marketshare situation is in Japan. CMA cares about the UK. EU cares about the EU. Hell even in its current state the FDA only cares about the US and their own [current] opinions on large corporation acquisitions.
This is probably the real reason Sony doesn't want Xbox to have Activision, well that and COD being such a cash cow.
Can't have competition, that would be bad for competition!
We talking about the same Microsoft that has repeatedly showed that they can compete in Japan?
The same one that everytime had shown positive growth, pulled out since they're not immediately selling the most and actually have to put work in a territory they repeatedly abandoned?
They did the same thing with Windows Phone.
i think CEOs etc need to stop making public statements.
just let the regulator do their job.
@Kaloudz xbox gamers dont play Japanese Games, for whatever stupid reason.
small sample, but look at the January GP poll, persona and MH falling way below Goldeneye.
Usually a fan of Satya but he makes little sense here. Illogical arguments stinks of desperation and overreaching.
😂 😂 😂 You can tell that Satya is definitely not a gamer.
The only way I his whole Japan market share makes sense to me is if he is thinking mostly about the King side of things, not sure how big King is in Japan, but do know Japan is big on all forms of mobile gaming.
Still puzzled on why any western regional regulatory agency should care about Japan's marketshare.
Activision games are already on playstation in Japan and some on nintendo yet they don't sell well. So this argument is just pointless.
@UltimateOtaku91 :
> After all, Call of Duty: WWII also on the PlayStation 4 managed to sell 168,324 units when it was launched last year in Japan, beating out Super Mario Odyssey in the process.
That was from 2018 and I'd bet the series has only gained more popularity in Japan since then, so Nadella could very well be right and that could very well be what Sony is actually concerned with here.
Feel safe saying convincing Japanese devs to actually put their games on Xbox would help it compete in Japan more. You know how many Japanese games are on every major Platform except Xbox, because they still don't think there's a market on the American console? Proving to them the market is there will help more than this cope.
What about actually getting all the developers that were acquisitions years ago to make games instead of jumping around tying to buy full on publishers?? I don’t get Microsoft at all. And now this clown is saying the deal needs to happen to better compete in Japan? Nintendo rules Japan and there isn’t a COD game on the switch..
Sounds like desperation which tells me they are not that confident in this going through.
If you want to compete in Japan then you need to make and bring more Japanese games to Xbox, this is why Xbox is the worse when it comes down to Japanese games and Anime style games. PlayStation and Switch are the King's in this area.
I'm not 100% sure but Activision might be the worse publisher to help grow Xbox in Japan, Bethesda was a much better purchase in that reguard.
I'm embarrassed for both of these companies, just reading on the side. It's that uncomfortable feeling you get when you experience second hand shame. Can't all of this just be private?
Yet again I don’t know why the big guns from either side just shut up and keep this business behind closed doors.
Just focus on the games that are arriving and positive things for 2023 and 2024.
It’s ending up like a chat show, perhaps they should go on Jerry Springer, Go Jerry 😂😂😂
@Tharsman I'm actually not sure what will move the needle in Japan. I'd not thing ABK would do it. And raising console prices in Japan surely isn't going to help.
That said there's been a bit of a mystery in PS5 sales where the console is starting to sell pretty well there, but games, usually coupled to hardware sales in Japan, have just not been selling. It's been begging the question of where are the PS5's going if nobody's buying games for it? A few of us have been wondering that, One poster in one of the threads living in Japan said that, anecdotally, the people they've talked to said they wanted for Fortnite and didn't even know what the other games available were.....
.......Fortnite.......is what's moving consoles in Japan now...........I just...........T_T
If he seriously believes this then it is the perfect example of why Xbox always fails in Japan.
No it wont. Buying Square Enix may help them in Japan but not ActiBlizzard. Buying SE probably would have actually been a wiser choice especially trying to compete with Sony. I really think something is wrong over there in MS Xbox division and maybe it has more to do with Microsoft and that guy right there. I just wonder if MS cut the Xbox division loose and let them do their own thing if it would do so much better.
@NEStalgia
“......Fortnite.......is what's moving consoles in Japan now...........I just...........T_T”
This says a lot about the state of gaming in Japan right now.
@NEStalgia if we talking acquisitions, they would have to acquire someone like Capcom or Bandai Namco, sure neither is up for sale but even in that hypothetical case, they really would give a terrible perception of foreign takeover, way worse than the perception we are seeing right now over the ABK deal.
I think Microsoft has a big branding problem in Japan, hell… everywhere. Let’s face it, the name alone… “Microsoft” sounds like an 80s boring corporation.
Sometimes I think that for the good of Xbox, sooner or later, Xbox might be better off spun off into an independent subsidiary. It could still be owned by Microsoft but with its own board of directors, traded independently in the stock market, and it’s own brand. Think Pokémon Company kind of independence.
I wonder if he has mistaken Japan with China.
@Tharsman Honestly, in regards to Japan, I'm not sure buying Bamco would do much. I'm not sure Japanese games even sell in Japan anymore. They seem to be mostly focusing on selling Japanese creative appeal to the west. Heck, Mistwalker is in Hawaii. Kojima is in Cali. Didn't Suda51 move to the States too? I don't know that Japanese gamers exist, I think they were made up by the internet in order to sell lunchboxes. Disgaia 7 launched with, what a few thousand sales, TOTAL?
Yeah, lots of Japanese buy Nintendo, mostly for kids, adults don't really play on it much anymore. And Nintendos in Japan mostly just sell Nintendo games to the Nintendo market. With the recent appearance of games not really selling on PS despite PS starting to sell, and if it's true that's mostly being about Western F2P games, I'd at this point believe CoD Warzone actually would be more appealing to Japan than anything from Bamco or Capcom. We know Minecraft and Skyrim at least sell well there. TBH Microsoft's GAMES actually seem to sell better in Japan than Sony's first party games if we include those two, even if they have to sell it on PS and Switch to move them.
PC seems a bit healthier in Japan at the moment, but that's just it. It seems consoles are a dead mix of F2P casuals and Nintendo kids (disclaimer: I'm not saying Nintendo is for kids, I'm saying Nintendo in Japan is for kids.), and the "enthusiast" market remaining in Japan has almost unilaterally moved to PC. Technically that could be a window for MS, but I don't think they're really interested in using the window. (s).
I don't disagree though about spinning Xbox off. I thought they were heading that way removing it from the Windows division and making it a separate division, but I do think they're the only one of the 3 wholly integrated into a broader corporate behemoth. Though it would also mean they can't hide the numbers as well and possibly couldn't double up resources with other divisions like hardware production.
i guess too that maybe not Increase console prices there.
@NEStalgia Japan top selling games every week tend to be very Japanese (or very Nintendo) with the perpetual charting exception of Minecraft, something Xbox won’t ever leverage as an exclusive because they have made a promise to keep it perpetually multi platform (and not just the main game but every spinoff.)
Still it’s unlikely Xbox, as a console, will ever gain a lot of momentum in Japan, i think. Any game that moves the needle in interest will also be on PC and will likely sell there instead. Now, if Microsoft managed to slim down the Series S in such a way that it can become a viable handheld device…
As much as the CMA can be a little over zealous, the market share in the UK for Xbox and Playstation is a lot closer to 50/50 so I can see why they are viewing it thier way.
@Tharsman very Nintendo mostly. But that's the weird thing is traditionally Japanese console sales are coupled to new games and the games chart as consoles spike. The anomaly this gen is PS5 is starting to sell well but there's no games charting to accompany it. And it's not that the big games on switch are selling sooo well it's burying PS5 game sales. The games on the chart sold hundreds to thousands, anemic numbers associated with total failures. People are buying ps5s in decent numbers there but not buying games ..
@EliJapan wow thats pretty weird they won't do extended warranty. Though in the us extended is usually provided by third party insurance companies and cost crazy money (spot checked Walmart ps5 and it's $80 for 4 years.). I've seen worse so that's not horrible.
@NEStalgia ps5 has a backlog of games that some wanted to play on it, not on PS4, so every time it’s on stock it simply sells, not just in Japan but everywhere.
As for the charts, sites tend to only report the top 10, but much longer charts are available here and there, and you can see very traditional JRPGs and anime based games charting (sometimes even on the top 10.)
Edit: honestly, Xbox does not need to sell consoles in Japan, it’s nice but they intentionally set themselves up in a position where they can also deliver games on pc and cloud without selling Japan a console. The reason we care about the console being at least available there is we need Japanese titles on Xbox and that won’t happen without at least some console presence. You can’t even viably try to hire a studio to develop your game if they are expected to import the hardware.
@stvevan well one could argue the bulk of PS players don’t play Japanese games either. The difference is PS has a such a large player base, that it makes up for it. But looking at the COD portion of the ABL deal; it’s obvious what actually makes the money.
Now the people not buying Japanese games aren’t those on the web.. This is the very large casual gaming audience that buys Madden, Saints Row, etc.
Again PS just has a bigger players to help rebalance the scales.
@Tharsman re the charts, the thing with the charts it's that the sell numbers even in the top 10 are terrible for everything not named Pokemon. Anything not on that list sold so bad it's not even with looking at. Games, in general, are just not selling. Even switch. 9 of the 10 games are switch and only one had good sell numbers. The rest look dire. And that's the top 10.... Video games in general (not named Pokemon) just aren't moving good looking numbers. Yet hardware is selling in a place that used to at least be less likely to buy hardware without software. It's weird stuff.
@NEStalgia
Last year's top 10 video game sales in Japan included games other than Pokémon.
1 - Pokemon Scarlet Violet
2 - Splatoon 3
3 - Pokemon Legends Arceus
4 - Kirby and the forgotten Land
5 - Nintendo Switch Sports
6 - Mario Kart 8 Deluxe
7 - Minecraft
8 - Mrio Party Super Stars
9 - Smash Bros Ultimate
10 - Elden Ring
Interestingly, Microsoft Japan has higher sales than Sony Interactive Entertainment. This is almost entirely due to sales of the Switch version of Minecraft.
@NEStalgia If you try to compare to global sales, the numbers are going to look insignificant. But here is a random example from the week of Jan 29:
One Piece Odyssey
PS4, 20th place - 2,769 copies on the week, 43,129 lifetime
PS5, 27th place - 1,773 copies on the week, 32,217 lifetime
Thats 75,346 lifetime, both versions sell for ¥8,778, so that's a lifetime sales of ¥661,387,188, equivalent to $5,055,643.67 USD, just in Japan, in two weeks.
But One Piece is huge in Japan so lets use another example, from the same week:
Taiko no Tatsujin: Rhythm Festival (switch only)
2,596 copies for the week, 147,242 lifetime. This game sells for ¥6,830, lifetime sales of ¥1,005,662,860, equivalent to $7,687,286.90.
I think its safe to assume if this game only sold in Japan, the publisher would be relatively happy with the money they made, more than enough to not worry about their future, especially given the games likely don't have the budget of the likes of God of War, Halo or Call of Duty.
I could calculate more examples but this takes time, my point is, yes Nintendo games are the ones that sell so ridiculous number of units that they eclipse everything else, but that does not mean that everything else is not considered a success, or that it sells poorly.
@Tharsman But compare the raw numbers (lifetime) in Japan for any of these titles, vs the lifetime (US-only) sales of whatever game is in the same chart positions. Or against past Japanese sales of a few generations ago of games in the same position and you see the point. Which is a smaller market by population.
But that's not the original point - the original point is when you look at, say, 20th position, you still see (old) Switch games and not a commensurate amount of PS4/5 games despite the hardware starting to move. There's no software appearing on the chart over ancient Switch games on the chart to line up with the hardware sales numbers, which is not how the market there at leased used to work (and still does for Switch.) And that the numbers on Switch games in those positions are still poor, meaning it's not just that it's all selling SO well it's overshadowing normal sales of PS games. The chart is populated with ancient evergreens, like TnT, that sold decently over a many years span but sell anemically currently, yet that still is one of the better sellers.
@xboxjapanfan That doesn't include the raw numbers ,though. IIRC the raw numbers on Pokemon, Pokemon, Minecraft, and Kart, as well as Splatoon look very different from anything else on the list. Those of course are extraordinary in sales, but the numbers for say, Elden Ring, and things in lower positions on that chart drop off sharply into very mediocre sales.
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