Xbox is becoming more popular in Japan, and more players are connecting across different platforms within the Xbox gaming world throughout 2025. This is good news for Microsoft, especially considering Xbox has faced some difficulties lately, as Japan is a major market for video games.
Although the Xbox Series X/S and Xbox One initially sold at comparable rates, recent years have seen the newer consoles fall behind. Microsoft reported a 22% drop in hardware sales for the quarter ending June 2025. At the same time, growth in Xbox Game Pass subscriptions has been slowing down for several years, leading Microsoft to stop sharing regular subscriber numbers. Faced with these difficulties and the increasing cost and time required to develop games, Microsoft has begun releasing some of its most popular game franchises on competing platforms, hoping to increase overall gaming revenue.
Xbox Is Growing in Japan, Phil Spencer Says
Despite recent difficulties, Xbox is performing well in Japan. According to Microsoft Gaming CEO Phil Spencer, total playtime across all Xbox platforms—consoles, PC games on Microsoft platforms, and Xbox Cloud Gaming—has increased by around 20% in the last year. Spencer noted that growth has been fairly consistent across all three platforms, which aligns with Microsoft’s goal of letting people play Xbox games on whatever device they prefer.
Japan-Oriented Games May Further Improve Xbox Numbers in the Country
Looking at how Xbox is doing now, Spencer believes there’s still significant potential for growth in Japan. He explained that offering games specifically designed for Japanese players should lead to even greater popularity. This approach seems to be underway, as evidenced by the recent reveal of Forza Horizon 6, set in Japan, at the 2025 Tokyo Game Show.
Why Japan Is Attractive to Xbox (and Any Other Gaming Platform)
Xbox hasn’t traditionally been very popular in Japan, but the country is a huge potential market for any gaming company. Recent data shows Japan is the world’s third-largest gaming market, generating $16.8 billion in revenue – only behind the US and China. While mobile gaming makes up a significant portion of that total, Japan also boasts a large number of console gamers (29.7 million) and PC gamers (14.4 million), making it a key market for both platforms according to a 2024 report.
Another Promising Sign for Xbox Business: Revenue Growth
It remains to be seen if Microsoft’s recent focus on Japanese-inspired game content – through downloadable content and full games – will be a lasting strategy or just a temporary trend. It’s also unclear whether increased gaming activity in Japan will lead to continued revenue increases. However, Microsoft recently announced that its Xbox division experienced 16% revenue growth this past year (15% when accounting for currency changes), hitting a key financial goal for the first time since 2020, as reported in a recent SEC filing.
Sources: Newzoo, Automaton West, Microsoft / SEC
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2025-10-25 01:05