Xbox in Japan: 3 video game studios Microsoft could buy

Xbox consoles typically don't sell very well in Japan, with the Xbox One struggling to sell even 100 units in the entire country each week. Now that the Xbox Series X is released with Yakuza: Like a Dragon as a next-gen exclusive, and Project xCloud is coming to Japan very soon, it's clear that Microsoft is interested in gaining more market share in the country.

But there are conflicting reports about just how interested Microsoft might be in acquiring a new developer from Japan as part of the company's multi-year game studio acquisition spree. If you thought Microsoft acquiring Bethesda earlier this year felt huge, who knows what might come next.

We've broken down what we know about Xbox Game Studios' current strategy in Japan and which developers, if any, they're most likely to pursue.

What is Xbox's current strategy in Japan?

As we mentioned, Xbox has had trouble courting Japanese audiences, but they are trying to change that with the Xbox Series X and S in Japan, which both launched in the region on November 10. Microsoft’s VP of Gaming Ecosystem Sarah Bond acknowledged this to IGN in September.

"It was very clear to us out of the gate ... that the Xbox One launch had layer after layer of missteps and, in particular, related to Japan, that we were not going to repeat," she said. "We were very transparent with them about [Xbox Series X] being a global, simultaneous launch, our commitment to the content and the developers, and ultimately our vision to put the player at the center of everything we do."

A Bloomberg article on November 9 further detailed Microsoft's plans in Japan, even claiming that the company is meeting with different Japanese developers big and small with the intention of acquiring another studio from that region.

Currently, Microsoft's only development team based out of Japan will be GhostWire: Tokyo developer Tango Gameworks after Microsoft fully acquires ZeniMax Media in 2021. Still, that Bloomberg article makes it seem like Microsoft is eager to add another Japanese developer to their studio lineup ASAP.

Xbox boss Phil Spencer has previously denied such rumors, however, as recently as in a November 11 GameSpot interview.

"I don't think we're out there with our business card, throwing them out on the corner, trying to find people," Spencer said. "I've talked about my affinity for Japanese studios and thinking back in the day when we had more games that were created in Japan as part of our first-party ... So it's an area that I'm interested in, but no, ... I think that's not accurate."

Obviously, Spencer can't confirm anything if business deals are being made behind closed doors, but his statement is a bit contradictory to Microsoft's other messaging.

He could also just mean that they are only targeting specific studios, rather than the more broad approach suggested by Bloomberg. But if Microsoft were to acquire a Japanese developer, who should they choose?

What other Japanese developers could Microsoft acquire?

FromSoftware — Microsoft has had a great relationship with FromSoftware for a long time, and games like Dark Souls 3, Sekiro: Shadows Die Twice, and the highly anticipated Elden Ring have all been revealed during Microsoft events.

Spencer even confirmed in the aforementioned GameSpot interview that he has a close relationship with FromSoftware and has played "quite a bit" of Elden Ring. If the two companies are that close, an acquisition could make sense if both parties are interested.

Sega — When it comes to bigger Japanese game companies, Sega has been significantly downsizing and struggling due to Covid-19, and Microsoft could be their saving grace. This would also be a huge acquisition that would make franchises like Sonic the Hedgehog and Yakuza Xbox-only.

Spencer also told GameReactor that Microsoft is interested in acquiring studios that create E-rated games, and Sega has quite a few of those.

Koei Tecmo — The Bloomberg article namedrops Koei Tecmo as a potential Microsoft partner, though its with regards to game exclusives, not studio acquisitions. Microsoft could be interested in Koei Tecmo if they want to own franchises like Dynasty Warriors, Dead or Alive, and Ninja Gaiden. But Microsoft probably wouldn't acquire Koei Tecmo outright.

For now, it's purely a guessing game as to which Japanese game developer or publisher Microsoft might be interested in acquiring. While Phil Spencer's comments make an acquisition in near future unlikely, don't be surprised if a major acquisition happens if Xbox is able to get a foothold in Japan.