By: ac
Microsoft swung into full-scale marketing mode last week, opening its stylish and swanky Xbox 360 Lounge in Tokyo. Dozens of celebrities were limo'ed in for the evening unveiling – including legit industry heavy-hitters like Metal Gear's Hideo Kojima and Capcom's Keiji Inafune – as well as the usual gaggle of game journalists and members of the media. Cameras rolled, industry insiders grinned, and Yuji Naka seemed oddly giddy throughout the whole thing. It was the kind of affair that seemed trite and phony – yet tinged with the undeniable, unbiased excitement that always seems to accompany the imminent launch of a new console.
Just a controller's throw from the pricey, upscale shops of Harajuku, the Lounge is part of Microsoft's effort to drive sales of the upcoming Xbox 360 in Japan, a market where its predecessor was humiliated. In 2002, Microsoft's Xbox (released in late February) sold 327,699 units in Japan. That same year, Sony's PS2 moved a whopping 3.7 million units. In terms of software market share, Xbox tallied a measly 0.5 percent, compared to 55.2 percent for PS2 and 12.4 percent for Gamecube. Even Sega's flagging Dreamcast outpaced Xbox, earning 0.8 percent of the software market. And things only went downhill from there. In 2003, Xbox sold about 97,000 units – only marginally better than the ancient PSOne (61,000) and JVC's WonderSwan Crystal (47,000). In 2004, that number dropped to about 40,000 – or, just 10,000 more than Nintendo's non-SP Game Boy Advance. Over this three-year period, Microsoft sold roughly 464,000 units in Japan, compared to 9.2 million for PS2 and 2.59 million for GameCube. It's no wonder that not a single Xbox game has ever managed to crack the Japanese yearly top 50.
However, Bill Gates' chunky, black box has performed much better in America. Microsoft claimed 468,000 consoles sold in November 2002 alone. And in the two-year period from 2003 to 2004, Xbox sold over 7 million units in the U.S. Compare that to PS2's 10.9 million over the same period, and one can see that – in America, at least – Microsoft's got it going on. So, why the collapse in Japan?
"Games like Halo and Splinter Cell don't really appeal to me," said Matsuo Taiki, 20, a student observing the crowds outside the 360 Lounge. "However, some people like them. I would like to see more variety for Xbox 360. Games that will appeal to more Japanese players."
Indeed, the very games that propelled Xbox sales in America turned off Japanese gamers in droves. In a land where shelf space is dominated by anime-style RPGs and dating sims, Western-flavored first-person shooters and the latest iteration of Madden aren't just unusual, they're unwanted. And while Xbox Live was (and is) certainly a hit with American gamers, offering a robust, well-engineered online service that trumped Sony's similar efforts, it was a non-factor in Japan, where online gaming – outside of a cell phone – simply isn't very popular. Finally, there is the typical Japanese gamer's historical bias against Western games. Aside from the few non-Japanese titles that enjoy moderate success there (GTA comes to mind), the majority of American and European titles either flop or are simply never released. For a system engineered in the U.S. and whose library consisted largely of U.S.-developed games, this was a problem.
But in this, the latest battle of the never-ending "console wars," Microsoft seems prepared to come out blasting. Redwood recognizes the importance of conquering Japan, the industry's second-largest game market.
"The Japanese market is the most important key for the Xbox [360]'s global strategy," said Yoshihiro Maruyama, general manager of the Xbox Division in Japan, at a recent press conference. "Microsoft is committing fully to its success in Japan."
Any missteps the 360 might make in Japan could spell doom for Microsoft's "global strategy." Fewer hardware sales mean fewer 3rd party titles in development. Lackluster 3rd party support means lackluster consumer interest. And if Japanese gamers are reluctant to pony up their yen for the 360 (which will reportedly retail for the equivalent of $350), then Microsoft may once again find itself with a console that soars in the U.S., but stalls in Japan.
In a recent interview with GamePro.com, Maruyama commented: "Unlike the U.S., the Japanese market has always been a winner-takes-all market. My goal is to be number one in the Japanese market. Unless you become the number one console, you cannot keep making money."
The potential lack of sales in Japan may be comparatively small versus the Xbox 360's almost certainly strong performance in the U.S. But when you're talking about a "global strategy" and fighting for every dollar on an industry-wide, $25 billion battlefield, a few percentage points can mean a great deal.
The Ups & Downs of Microsoft's Xbox 360 Marketing
by James Brightman
While much of the advertising for the Xbox 360 and its games has been well executed, there are certain elements that don't seem up to snuff. Microsoft's full-blown marketing efforts are still forthcoming, but we take a look at what we believe was done right so far and what could have used some improvement.
Marketing agency AKQA made headlines in May when it announced that it had been tapped to create the much-discussed user interface (or dashboard) for Microsoft's stylish Xbox 360. The 10-year-old agency had worked with Microsoft before for the company's Forza website, but despite being in the works for years, AKQA's dashboard involvement still came as a surprise to many. The Xbox 360 UI combines form and function in a way currently unmatched in the console space, but is unsurprising coming from creative marketers.
Met with considerably less fanfare was the news that AKQA was designing the 360's entire launch campaign, including the relaunch of Xbox.com and the marketing campaigns for all first-party launch titles. GameDAILY BIZ took a look at what the agency did right, and what opportunities were perhaps not fully taken advantage of.
Perfect Viral Approach
It's clear that Microsoft is positioning Perfect Dark Zero as this Xbox generation's Halo, counting on console FPS fanatics to not be able to live without the experience. The most prominent of all first-party launch titles aptly has received the most prominent marketing push, centering around an interactive website that also utilizes viral elements.
| [ | "... Microsoft's huge opportunity is to get consumers at the retail level, at playable kiosks... that is what will make them say 'Wow,' " David Cole, DFC Intelligence | ] |
"[The target audience members] have very highly evolved media habits and don't like being marketed to. They're also highly opinionated about entertainment releases. Taking that into account, our strategy is always to create entertaining experiences that would resonate with that particular audience and that they would choose to participate in and share with their friends," AKQA Account Director Rikki Khanna recently told ClickZ.
The navigation of the site itself has gamers walking around a dark room, finding screenshots, movies, and other PD0-related goodies through exploration. The true innovation comes from the site's viral element. When sent a link to the site by a friend, you're greeted with a first-person view of doctors frantically working to revive you. Upon failure, the toe-tag reveals that it was you they had been working on. The person who initiated the email then receives a phone call (if they opted in), letting them know that the job has been completed.
The online campaign is already being backed up by a print campaign in the enthusiast press, with upcoming TV and online spots presumably driving traffic to the site as well.
Unusual Print Decision
Microsoft's print spots for their first-party offerings have been described by some as a missed opportunity, or perhaps a bit of a miscue. These first party pushes don't just need to sell consumers on the game, they need to sell them on the hardware as well. Yet Kameo and PD0 both have two-page spreads currently running that feature no in-game assets. The screenshots in the PGR3 two-page spread are so small that it's impossible to see that the game is better looking than current-gen racers.
None of the spreads are poor; the PD0 ad features a futuristic cityscape that is nearly impossible to flip past without pausing to take it in. The problem is that these pages represent a lot of real estate that could have been used to convince hardcore gamers that they need to spend $300-$400 on new hardware this holiday season. Right now no piece of 360 marketing is highlighting the graphic leap the system brings to console gaming.
DFC Intelligence President David Cole hypothesized that the industry's marketing decisions of the past contributed to the shape of the current 360 campaign. "TV commercials have been using CG cut-scenes that look nothing like the real in-game footage for years now," he told GameDAILY BIZ. "It would be very hard for Microsoft to sell gamers on the 360's enhanced graphics through print or TV spots, no matter how much you assured consumers that it was all being done in-game."
"I believe that Microsoft's huge opportunity is to get consumers at the retail level, at playable kiosks," he continued. "When they can get their hands on it and experience for themselves and see the leap it is over their current Xbox, that is what will make them say 'Wow.' "
Abstraction Distraction
Some companies have also quietly expressed concern that Microsoft is taking a too "high-minded" approach with their 360 marketing, opting to use abstract imagery and photographic elements of hip-looking gamers of many nationalities to brand the system. The company is clearly trying to cultivate "cool," but at a time when many analysts believe MS is poised to capture market share from Sony, the decision has been met with some understandable apprehension.
Still, for every possible marketing miscue there has been an equally insightful decision on Microsoft's part. An extremely strong viral campaign at ourcolony.net was pulled off on a scale that had not yet been attempted by anyone else. A primetime MTV special proved to be anticlimactic for hardcore gamers, but undoubtedly had a significant impact on 360 mindshare among casual gamers.
The one thing that can be consistently said about 360 marketing efforts across the board is that every aspect seems to be breaking new ground. Although some of that ground may have been better left unbroken, it's very possible that the marketing ingenuity displayed will end up selling more 360s than the hardware specs themselves would have moved, come November 22nd.
by James Brightman
Comments or questions? Send them to editor@gamedaily.com
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