Microsoft has insisted it remains committed to the Japanese market despite Xbox 360's struggles, but admitted: "It's a challenging market."
Earlier this week we revealed the extent of the Xbox 360's Japanese woes, with sales down 46.7 per cent year on year, retailers beginning to phase out the console, and its last high-profile exclusive heading to PS3 following dismal sales. At this week's Gamescom in Cologne, Eurogamer asked Microsoft's executive VP of interactive entertainment in Europe, Chris Lewis, if the company was considering admitting defeat.
"No, of course we're not pulling out," he said. "It's a challenging market. We are up against very strong competition there. We're very respectful of what Sony and Nintendo do, and where they've come from, and what they bring."
Lewis then said that Microsoft's motion-sensing peripheral, which has done much to extend the 360's lifespan in the west, will keep the console afloat in Japan.
"Nintendo, particularly with the Wii, have opened up a market opportunity there," he said. "We've leapfrogged that handheld technology with Kinect. What we're seeing is users love using their own body without worrying about how to work a controller.
"So we see ourselves as, frankly, a company that does bring an awful lot of firsts, and we've enjoyed fabulous success with Kinect."
Lewis pinning his hopes on Kinect is a curious move. Retailers said the peripheral was "off to a pretty rough start" within days of its launch last November, and it was revealed soon after that it had sold 26,000 units in the week of its release, its best-selling game selling 6,000 units and entering the all-formats software chart in a lowly 24th place.
By the end of 2010 it had sold 90,000 units and, while we've not seen any sales data since, Japan's Xbox boss Takashi Sensui admitted last month that Kinect sales had failed to meet internal expectations.
However, at last year's Tokyo Game Show Microsoft announced five Kinect exclusives made by Japanese developers, and Lewis hinted that Microsoft has more up its sleeve for this September's show. "Japan remains important to us," he said. "We're very committed to that market. The development community there is very important. Tokyo Game Show will be a notable element in the year as usual."