Amidst Xbox's recent acquisition spree, there always seems to be talk of expansion into Japan. The region is seen as one of Xbox's weaker areas, and one Phil Spencer himself has spoke about improving on in the past. However, according to some, buying developers in the region will be very unlikely.
Ex-Edge Editor, Nathan Brown, touched on the subject is his recent 'Hit Points' newsletter. Brown spoke about the Activision Blizzard deal, and whether that type of purchase could ever spread to Japan.
"While I understand the thinking, particularly from those who live solely to feast on salty PlayStation fanboy tears, I would be very surprised indeed to see it happen. It is terrifically rare for Japanese companies to be acquired from overseas, and on the rare occasions such a deal goes through it doesn’t tend to end well [...] This does not make it impossible for Microsoft to acquire a Japanese game company, but it certainly makes it unlikely."
Brown also gathered other info to back up his thought process, including the opinion of Dr Serkan Toto, a Japanese game industry analyst and consultant. Toto talked about Japanese culture in regards to foreign takeover, and how such events are extremely rare.
"But in some ways, Microsoft taking over a big Japanese publisher would be bigger news than the Activision deal. So far no foreign game company has been able to acquire a Japanese studio — and I can guarantee you there have been attempts, from both western and Asian players. [...] Hostile takeovers are very, very rare in Japan, even local ones."
So, yeah, don't hold your hopes for too long on a Japanese takeover for Xbox. Sure, it's not impossible, but a major company acquisition of someone like Capcom or Square Enix is unlikely. Of course, there's always the indirect route, like how Xbox now owns Tango Gameworks, courtesy of the Bethesda deal.
Pie in the sky, which Japanese company would you like Xbox to pick up? Let us know your thoughts below.
[source hitpoints.substack.com, via videogameschronicle.com]
Comments 38
Playstation or nintendo will more likely to buy a japanese studio, and my moneys on either sony acquiring square enix or Nintendo acquiring either level 5 or platinum games
Is 'Tango Gameworks' not a japanese studio for him?
I just want more Final Fantasy, Tales of and Naruto games! Give me all of them. But please no more online only or multiplayer games. I want single player story games.
Its much easier to start up studio's in Japan than for a 'western' company to acquire a Japanese studio. I think Sega would be an 'easier' option due to their tier system, but that would still be very complicated because of Sega Sammy and their other interests.
It makes much more sense to try and strike up Partnerships with those Publishers/developers to ensure they release their games on your platform. You can argue that MS don't 'need' to buy EA because they have a good working partnership which sees EA Play on Game Pass Ultimate, all EA games releasing to that platform etc so MS could form a partnership with Sega, Capcom etc instead
I don’t see MS buying a Japanese studio or Nintendo due to the very valid reasons above, but I do see them skipping through fields of flowers hand in hand with Nintendo in an alternate timeline maybe.
I do think Microsoft is going to find some way to buy a Japanese company if they really want to and if said company is willing to sell. After all, they want to add as many different games as possible to Game Pass and the major area they're severely lacking in is Japanese games. There's no doubt in my mind that they want to buy a Japanese studio or publisher right now in order to cover that area.
I've said this before, but Sega would definitely be a good fit for Microsoft. Tons of iconic IPs, lots of studios, most importantly ones that make Japanese games but also some PC developers like Relic Entertainment and Creative Assembly (who have worked with Microsoft in the past on Age of Empires IV and Halo Wars 2 respectively). On top of this, Sega isn't doing as well compared to other Japanese publishers like Square Enix and Capcom. Not to mention that they recently exited the arcade business and thus are losing a sizable revenue stream. Considering Microsoft has been acquiring publishers that have had some form of problems (ZeniMax with supposed financial issues; Activision Blizzard with recent scandals) it does make a lot of sense for Microsoft to acquire Sega.
@Murray different situation. Tango was at the time a very small team, essentially Zenimax just bought Shinji Mikami onboard and he took Tango works with him
Doesn't need to acquire a japanese studio, especially if none are willing to sell to a western company. Just do what sony does, pay for exclusivity, or entice someone with money and other intangibles, to make an exclusive for xb. I hear platgames really wants to finish scalebound. On the off chance that ms does buy a japanese studio, who's to say the devs don't leave. Studio is one thing, talent is another.
@PapaGlitch I think tango was bought within a few months of them announcing their new studio, don't even think they showed any games (to the public) by the time they were bought either
They seem to be doing fairly well without spending a lot of time/money courting Japanese studios. The industry has been moving more and more away from Japan in both sales and influence for decades.
It may be worth while to instead focus on improving market share and developer relations in more up and coming parts of the world.
@UltimateOtaku91 @PapaGlitch @Murray
"Shortly after development on this game began, Tango ran into financial issues; according to Mikami, "something happened".[1] American video game publisher Bethesda Softworks stepped in to assist and had its parent company, ZeniMax Media, acquire the studio, which was announced on 28 October 2010."
Yeah, they hadn't released anything, and seemingly was struggling anyway.
For all intents and purposes, they might as well have been founded by Bethesda.
@Richnj @PapaGlitch @Murray @UltimateOtaku91 I think the person meant publisher not studio. Big difference. It is easy for an overseas company to buy a studio. As fast as I know they don’t fall into this “protected class” structure that Japan has. And it’s tiered system from what I understand.
To you give you an example Netease acquired Grasshopper recently. Whatever that would apply to the US as far as purchasing a Japanese company would apply to any forreign entity.
Also companies like Square and Sega have divisions based in other countries that are in some cases their own company. Like how NISA is mostly independent of NIS.
@Richnj ah I didn't know all the in and outs, but that makes sense, and clarifies the difference between the tango acquisition and MS buying someone like Sega. That said, I would've said it would be highly unlikely MS could ever but Activision a month ago - you can never get on anything in these crazy days!
What is the obsession with Japanese studios/games? Hopefully they are focused on the most talented studios available regardless of where they are located.
I like avalanche studios. If xbox cant acquire that studio I dont think I would ever say they better focus exclusively on grabbing another swedish studio instead.
Doesn't bother me...I find most Japanese games weird and boring
@mousieone that's what I meant. Buying a massive publisher such as a Capcom or Sega is far more complex, not least due to (and I'm probably massively over generalising here) the culture of Japanese business clashing with the Western approach
@Somebody I can't stand anime stuff, so I largely ignore a large portion of the Japanese market myself, but they're undoubtedly massively popular. And MS have made no secret that they hope to make inroads in this area
@Somebody I agree about the "most talented studios available".
But lumping Avalanche in there is a weird one. Just Cause, Mad Max, Rage 2... pretty much the definition of average games. Some talented folk no doubt, it's not easy launching ANY games, but no where near the top of the field.
The whole article was definitely worth a read and informative. Even if it's just speculation they certainly seem to know more about it than most.
Fascinating especially the bit about culture and staff leaving foreign owned companies.
"A foreign entity taking over a publicly traded studio against its own will would be a suicide mission: everybody would leave instantly."
@themightyant avalanche is a rumored studio that MS is interested in. I was only using as an example of how weird it is to be looking at a studio specifically for its geographic location. If they miss out on avalanche you dont say we desperately need a different swedish studio. The narrative around japan and xbox is that they desperately need to acquire any japanese studio.
Even though I do think avalanche is a good developer and would be a great team to help xbox expand on 3rd person action games.
@PapaGlitch they could do their own game right now inspired by anime. I dont get why it has to be produced in Japan for some people to like it.
Microsoft Japan. Problem solved.
@BomberBlur07 I thought that too, but it surely can't be as simple as that right?
@Somebody at one point Japanese devs were at the top of the developer chain. Japanese games not only defined genres but created many. Like Resident Evil and Silent Hill. It always felt like the West was playing catch up.
However, now the brightest and/or biggest games minus a handful; aren’t Japanese any more. Studios like Naughty Dog and Insomniac are the top tier now.
It’s reality a lot of people haven’t woken up to yet.
@mousieone That's 100% true. BUT i'd argue a lot of western devs have also become very formulaic and are removing some of the basic childlike joy of video games.
Often a completely OTT Japanese game, jank included, is exactly the palate cleanser many want. A lot of them are just bottled fun and don't take themselves too seriously. That's not for everyone, but it is for many.
I think both sides of the industry could still learn a lot from each other at this point if i'm honest.
What is likely, is one of them to get a studio, which wouldn't cause any issue as long as they want to sell.
Look at Platinum Games right now, clearly looking for either investment or acquisition.
Arc System Works would be a great fit for PlayStation with EVO, and Mistwalker could be a great fit for Xbox with JRPG on console and mobile.
There's always the narrative that Japan basically isn't important in the industry anymore, it's moved Westward, and in some areas sales seem to indicate that. On the other hand sales also indicate that Nintendo continues to curbstomp the other consoles with pretty much an exclusive focus on Japanese games and I wonder how everyone is looking over their shoulder so often.
Platinum Games seems to be looking for a parent company like Tango back in the day. There is no reason why Microsoft could not found Xbox Tokyo/Kyoto Studio with Japanese developers. Sega could be interested in becoming part of Microsoft... The possibilities are endless. However, it seems that Square Enix and Capcom are not interested in Sony, Nintendo nor Microsoft owning them. I think that Koei Tecmo might be interested and that one would be fascinating because of Project Zero/Fatal Frame.
There'd be a massive backlash if Microsoft acquired a notable Japanese studio. It's just not a good idea.
If Microsoft wants more Japanese games, they can partner with companies to ensure support continues. I mean, they must have already been doing that to some extent, considering stuff like Dragon Quest, Yakuza, Octopath, etc. has been hitting Xbox in recent years. Even better is if they work with these companies to commission platform exclusives. Remember when they collab'd with Sakaguchi and games like Lost Odyssey, Blue Dragon, etc. were hitting the 360?
Stuff like that would be a massive incentive to pick up an Xbox Series console in the coming years.
@Xiovanni It's not getting the same amount of attention, but there's definitely a limit to what Microsoft is willing to host. For example, Inti-Creates had to cancel the planned recent Xbox release of Gal*Gun Returns once it was clear they'd have to censor it to some degree on that platform, which they weren't willing to do. Which is interesting, considering it's a remake of a game that originally released on the 360.
I agree, btw. One of the big reasons the PS1 exploded in popularity and support like it did was because Sony didn't have the same puritanical content standards that Nintendo was enforcing at the time.
Ironically, Nintendo is by far the least restrictive of the platform holders when it comes to what they're willing to host on their system now, and they've been poaching so many smaller Jp developers that previously worked primarily with Sony.
If I was an Xbox gamer, I know I'd want Microsoft to enter negotiations with NIS to port their games to Xbox consoles. It'd be very cool to see series like Disgaea, The Legend of Heroes, etc. go to Game Pass as well.Edit: Nvm, apparently even some Disgaea games are showing up on Xbox, lol. The Legend of Heroes games are still a big hole in their JRPG support, though. No reason the Trails games shouldn't be on Xbox.
@Ralizah wait what !?! Link me source.
Hostile takeovers
That is the point: Microsoft has made absolutely no hostile takeover attempts. IF MS acquires a Japanese studio, its because the studio itself is interested in the deal.
Also keep in mind: Microsoft has an entirely "independent" Japan subsidiary, with its own CEO. Despite said independence, they still answer to the parent company since its the major stockholder. MS could do all sort of legal maneuvers through that entity.
I do find it funny, though... "never has this happened" is a terrible reason these days.
I'm sure we can say the same for a lot of things.
Never before has a game subscription service become successful.
Never before has a platform holder bought a company as large as Bethesda.
Never before has anyone bought a company as large as Activision Blizzard.
Whatever happens next, it will just be another "never happened before, but now it happened."
Edit to add:
I been digging a bit, and still don't have enough info so don't quote me on this, but my understanding is that Japan does not actually have any laws preventing the acquisition of local companies, but they have plenty of roadblocks to ever do a hostile takeover successfully.
The complexity comes with something I am still trying to understand called cross-shareholding, an example of this is if a company borrows money from a bank, the bank also gets to own shares on the company while at the same time shareholders get seats in the bank. This might involve many banks and corporations, making the process of takeovers extremely complex and unlikely to succeed. By proxy, I guess you could say its also hard for enough agreement between all involved parties to be willing to sell, but thats still more likely than hostile takeovers.
If the corporation happens to be private, there are zero roadblocks other than the owners be willing, but I dont think any of the big japan game studios are private.
@mousieone A source for what?
@Ralizah the Disgaea source ? Unless you mean the pc poet?
@UltimateOtaku91
https://www.nintendolife.com/news/2022/02/nintendo-says-it-wont-compete-with-microsoft-and-sony-in-an-acquisitions-arms-race
@Captain_America he said they don't want anyone thst doesnt have the Nintendo DNA which platinum games, level 5, capcom and square enix have made quite a lot of Nintendo exclusives over the last 20 years so technically they would have that DNA they are looking for. Basically he means no western studios
@mousieone Well, Disgaea 4 was on GP for PC, it seems.
Microsoft definitely still needs to get NIS on-board, then. Xbox consoles are pretty much the only modern platform NOT getting Disgaea games at this point. Ditto with Trails games.
Games like this might not have massive pull in and of themselves, but little exclusions like these add up over time. Thankfully, Xbox is doing so much better with Japanese games these days. Not up their 360-era highs, but the Japanese advantage Sony had early last gen has almost evaporated at this point. Even Vanillaware is breaking free from Playstation's iron grip again.
@Ralizah Alright well, NISA wanted in on the GP money, but didn't want to do an Xbox port. That's all D4 on GP for PC was. However, I'd love it if they made PC GP games streamable to console (Or at least a few of them). I feel like that would open a can of worms that MS isn't ready to deal with, but again a few specific ones could be easier and written into the contract. I say that because it would solve a lot of their issues with specific Japanese companies like NIS/NISA and Falcom. At least in Disgaea's case, a streaming version of turn based strategy game to a stationary console, would work well and prove whether or not you have an audience there. Also, stationary consoles are often hard wired into the internet. Now, of course, no one could play the game, but at least you have a way in. Granted, you'd have to convince NIS/Falcom to do it. Personally, though I'm glad they got Spike Chunsoft and Marvelous playing ball.
Falcon just started making internal Switch ports. They are so risk adverse; they are risky. But I really want Gust games
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