Why PS4 is struggling in Japan

Sony Computer Entertainment boss Andrew House discusses the bad egg.

The PlayStation 4 is struggling in Japan. But why?

The PS4 launched in Japan in February 2014 (four months after the UK and US) and has now sold 620,000 units there. In Japan, over the last couple of weeks, the Wii U outsold the PS4. Last week the PS4 outsold its predecessor the PlayStation 3 by only 500 units.

"It's doing okay," was Sony Computer Entertainment boss Andrew House's assessment of the PS4's performance in Japan so far when quizzed on the subject by Eurogamer at the Develop conference in Brighton.

This is in stark contrast to the performance of the console in the west. In the UK the PS4 is the fastest-selling console ever. Globally, the PS4 has shifted seven million units, and is selling at a faster rate than the phenomenally successful PlayStation 2 over the same time period.

So, what's going wrong in Japan? House highlighted the lack of PS4 games designed by Japanese companies - rather than the fact it launched in Japan after it did in the west.

"We're conscious of the fact we have not had yet the sort of groundswell of Japan native content from Japanese publishers and developers," House said. "I view that as temporary.

"There's definite developer and publisher enthusiasm for the platform, especially having seen the overarching success it's had in markets outside of Japan, and again this outpacing of the PlayStation 2. We'll see that come into games people in Japan will get excited about, but unfortunately a little bit later than has happened in other markets."

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SCE boss Andrew House at the launch of PS4 in Japan.

House said Japanese publishers and developers failed to get behind the PS4 when Sony was discussing the console with them ahead of launch because they were comfortable with the PS3 and reluctant to invest in making games for a new and unproven platform.

Japan game sales data shows that unlike in the west, in Japan there is still much interest in the last generation. Last week the best-selling PS4 game in Japan was Ubisoft's open world hacking game Watch Dogs, which sold 65,000 copies. But PS3 games continue to do well there. Bandai Namco's Kamen Rider: Battride War 2 sold just shy of 60,000 units. And the PS3 version of Watch Dogs sold just under 40,000.

"For whatever reasons, when we were evangelising around the platform, we were having a tougher sell with Japanese publishers and developers," House admitted.

"There was a comfort level around PS3 that was playing into that. There was a slight level of concern around the viability of the console market in Japan. But we've really turned a corner on that and demonstrated that if you're a publisher that wants to reach a global market with good and immersive games then the PS4 is definitely the place to be."

At the Tokyo Game Show in September 2013, senior Sony executives told Eurogamer that they decided to launch PS4 in February because that was when Sony expected more games to be ready for its home market.

"Sony just wants to make sure that when PS4 launches in Japan there is a good line-up of titles for Japan," the console's lead architect and Knack creative director Mark Cerny said.

"Perhaps you could say that a few western developers have been more aggressive in readying titles for the hardware."

But despite the extra time that good line-up of titles for Japan failed to materialise.

Some analysts are sceptical of PS4's potential success in Japan. Indeed there is a general scepticism about the future of home console gaming there as consumers trend towards smartphones and tablets. Xbox One launches in Japan this September.

Japan game industry consultant Serkan Toto recently reported on research by Japanese magazine publisher Enterbrain that found console game revenue had remained static for the first half of 2014 compared to the first half of 2013 - despite the launch of the PS4 in February.

It's worth highlighting the handheld gaming factor here. Sony Worldwide Studios boss Shuhei Yoshida added Japanese developers have been less focused on next-gen because of the ongoing success of the likes of the 3DS in their home country.

"That's definitely a major factor when we decided where to launch when," Yoshida said. "The readiness from the publisher standpoint, and consumers and the media - everybody was ready. We were constantly told we should release new hardware!

"Compared to that, Japan is completely different. It's more portable-heavy, but the PS3 is catching up. Of course, after we announced PS4 in February, luckily publishers are showing an interest. But it's a completely different picture of readiness compared to western publishers."

There may be another factor at play that is hampering sales of the PS4 in Japan - and this one Sony may not be able to do anything about.

In the west streaming entertainment is already established and hugely popular. On these shores the likes of Netflix and Amazon Instant Video (formerly Lovefilm) have apps available on pretty much all the consoles. In Japan streaming is in a different place.

According to House, this has meant that for Japanese consumers there is currently no secondary reason to buy a PS4.

"I don't wish for this to sound like an excuse but it's something I've observed in Japan as I do live there," he said.

"There's a primary reason to buy a PS4, which is great games. The second thing I definitely think has happened - it's certainly happening in Europe maybe more than elsewhere - is that much earlier in the platform's lifecycle, we are reaching a broader audience than just a core gamer. One of the factors behind that is that all of the work we did on PS3 to offer people this secondary reason to purchase, including catch up TV services.

"If you look at the US PS4 user, yes by far the biggest engagement is around games on the platform, but a major factor in there is the likes of Netflix and Amazon video. That tells me there is already a secondary reason for purchasing this device.

"If you look at the Japanese market, for a variety of reasons, you have not seen a dominant player in streaming services happen. You see an inherent conservatism around film and TV content holders that doesn't allow for the rise of these brand new services. I think that's another factor.

"We'll see over time great games coming from Japanese publishers and developers. That's point number one. Point number two, which is hampering us a little bit, is for a variety of other structural reasons around the entertainment industry in Japan, we're not seeing that secondary usage. Those two are colluding together."

PS4 system architect Mark Cerny, who Eurogamer also interviewed at Develop, is playing the waiting game.

"It's because the products are not there to compel the people to buy the console," he put it, plainly. "We'll have a much better read on that a year or two after the Japanese publishers start releasing those interesting titles."

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