Xbox Might Not be Able to Acquire Japanese Studios, Analyst Claims

Dr. Serkan Toto of Kantan Games talks about how Xbox making moves in Japan will be pretty difficult for reasons both cultural and otherwise.

Posted By | On 08th, Feb. 2022

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Head of Xbox Phil Spencer has expressed his desire to bring Japanese studios under the Xbox Game Studios banner for some time now, although Dr. Serkan Toto of Tokyo-based consultancy Kantan Games believes that the Redmond-based giant would have a hard time in acquiring publishers such as the likes of Sega and Capcom.

In the latest issue of Hit Points By Nathan Brown (former editor Edge magazine), Toto talks about how Microsoft acquiring a publisher in the Japan region would be much bigger news in his opinion than the $70 billion acquisition of Activision Blizzard. Historically, foreign companies (both Asian and Western) haven’t been able to acquire Japanese giants for a variety of reasons- both cultural and otherwise. That said, Microsoft entering into a partnership with Sega and buying Tango Gameworks (part of ZeniMax Media) is just the start of the many moves that it will most likely try to make in the region going forwards.

“Nothing can be ruled out in this day and age,” Toto says. “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. They are generally considered the antithesis of the Japanese way of doing business, and almost always a very bad idea. A foreign entity taking over a publicly traded studio against its own will would be a suicide mission: everybody would leave instantly. I would bet my house this will not happen, ever.”

The article delves further into this idea, explaining how the Japanese concept of ‘keiretsu’ involves these giants looking out for each other instead of inviting external investment. While the concept’s popularity has somewhat waned over the years, this philosophy combined with the profitable nature of many of the biggest Japanese publishers (meaning they likely wouldn’t want to get acquired) makes it hard for Microsoft to make any moves in the region.

Additionally, there’s also unconventional ownership structures as well as a diversified portfolio (for instance, Konami has gyms while Sega has resorts) that might be difficult for Microsoft to manage. Of course, Sony itself being a Japanese company makes it easier for the Tokyo-based giant to make moves in the space, which Toto believes it will make soon.

“Sony of course has the home-field advantage, and some of the challenges that would come up for Microsoft would not apply to Sony,” he says. “It doesn’t have to be one of the publicly traded powerhouses, but I believe Sony is at least considering making a move in Japan soon.”

That said, Sony has spent the better part of the last decade burning bridges with Japanese audiences, instead trying to further its presence in the Western region with its games and policies- read more on that through here.


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