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Members of Congress Claim Sony is Hurting Xbox in Japan With Its Exclusive Deals

Members of Congress Claim Sony is Hurting Xbox in Japan With Its Exclusive Deals - News

by William D'Angelo , posted on 02 April 2023 / 4,001 Views

Members of Congress, both Democrats and Republicans, have raised concerns to the Biden administration stating Sony's business practices in Japan are blocking US companies from competing and could be against US-Japan trade deals. This was reported by Axios.

"Today, we write to bring to your attention the imbalanced Japanese video game market, which we are concerned may be a result of a discriminatory trade practice that could violate the spirit of the U.S.-Japan Digital Trade Agreement," reads one letter signed by four Republicans from the House sent to US Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo. "We also will be focused on this issue as the Biden Administration continues to negotiate the Indo-Pacific Economic Framework (IPEF).

"Japan allows foreign gaming companies to sell to its market, but U.S. companies have never gained a foothold. Microsoft debuted its Xbox in Japan in 2002, and despite 20 years of investment, still has a negligible two percent share of the high-end console market.

Members of Congress Claim Sony is Hurting Xbox in Japan With Its Exclusive Deals

"Our understanding is that the Japanese government tolerates a range of exclusionary conduct by their domestic companies that may violate Japan’s antitrust laws, and that this inaction by the Japanese government harms the ability of U.S. companies to compete in the country. We understand that Sony – which holds 98 percent of the market – pays third-party game publishers not to make their content available on Xbox and systematically negotiates exclusivity arrangements that keep the most popular games in Japan off Xbox.

"The Japanese government’s effective policy of non-prosecution when it comes to Sony appears to be a serious barrier to U.S. exports, with real impacts for Microsoft and the many U.S. game developers and publishers that sell globally but see their earnings in Japan depressed by these practices."

The letter claims that Sony has 98 percent of the "high-end console market in Japan" and signs deals to keep popular Japanese games from releasing on the Xbox. 

A letter from six Democratic lawmakers from Washington state covers similar ground was sent to Tai and Raimondo, according to Axios. It should be noted Microsoft is based in Washington state.

"While Japan allows foreign gaming companies to sell to its market, U.S. companies have failed to gain traction. For example, Microsoft launched Xbox in Japan in 2002 and, despite 20 years of investment, still has only two percent of the high-end console market," reads the letter from Democrats.

"Reports have indicated that Sony – which holds 98 percent of the Japanese market – has paid third-party game publishers to preclude access to their content and negotiated exclusivity arrangements that prevent Microsoft Xbox from hosting popular video games in Japan on their system.

"Such actions in the video game industry can result in barriers to certain U.S. exports, with serious impacts to Washington State in particular. Japan’s actions allow a domestic company to protect its market share from foreign competitors. This can also pose an impact to the tens of thousands of jobs the video game industry creates in Washington State, and the 428,000 it supports in total across the country."

Members of Congress Claim Sony is Hurting Xbox in Japan With Its Exclusive Deals

Article 8 of the 2019 U.S.-Japan Digital Trade Agreement states the countries are to enable "non-discriminatory treatment of digital products," which includes video games. Though it isn't clear if that also includes game consoles.

Sony has had several timed console exclusive deals for the PlayStation 5 including the upcoming games Final Fantasy XVI and Final Fantasy VII Rebirth. Exclusive contracts have been a long staple for the video game industry for decades and all major players have done them.

It should be noted that while Sony has 98 percent of the "high-end console market in Japan" this does not include Nintendo, which until recently was comfortably outselling the PlayStation and Xbox.

"Sony’s anti-competitive tactics deserve discussion, and we welcome further investigation to ensure a level playing field in the video game industry," said Microsoft spokesperson David Cuddy speaking with Axios.

Microsoft didn't state how much it is involved with this push from the members of Congress.

A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.

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Leynos (on 27 March 2023)

Nintendo owns Japan. Xbox has never been relevant in Japan even when they spent millions securing exclusive RPGs and Shmups in the 360 era. The games Sony is securing are more popular in the west.

  • +16
Azzanation Leynos (on 28 March 2023)

There is more to it than that. Sony claimed Nintendo isnt competition which now puts them on a 90/10 marketshare in Japan. While also offering anticompetitive contracts to Japanese devs. Something we might find out soon.

  • -9
Qwark Azzanation (on 28 March 2023)

Microsoft also claimed that in the same graphs. Also why would the US government gives a rat damn about what Sony says.

  • +6
Leynos Azzanation (on 28 March 2023)

Do you ever not defend MS at every jumping point?

  • +6
Azzanation Leynos (on 28 March 2023)

I say it how it is mate.
Imagine being agasint it..

  • -7
ConservagameR Leynos (on 28 March 2023)

Yet MS has been for a while now, and keeps being quite friendly towards Nintendo. Is there a much bigger play happening here? I'm not saying Nin and XB are going to merge or anything like that, but working together against Sony possibly?

  • +2
EpicRandy ConservagameR (on 28 March 2023)

I don't think the two will ever gang up against Sony, much more likely that when they collaborate it's for them mutual benefits and not to Sony's expense.

  • +2
poompk (on 28 March 2023)

This is so dumb, misinformed, and petty. I hope Japan tells these Washington state politicians/lobbyists to piss off.

  • +10
KazumaKiryu poompk (on 28 March 2023)

Hope too. Microsoft is paying the US Senator, apparently $500,000. Microsoft's stats are fake, so crazy this policy.

  • -6
Libara KazumaKiryu (on 28 March 2023)

And you have evidence of this?

  • 0
Johnd Libara (on 28 March 2023)

Ya the information is there.
Try that google thingamabob.

  • -2
Libara Johnd (on 28 March 2023)

Unlike some here I actually do basic levels of research, I'm more curious where kazuma got his info and want him to post specifically where he found his source. If he can that is.

  • +1
scrapking Libara (on 01 April 2023)

It's not Microsoft paying the senator, it's Microsoft staff that contributed to the senator as individuals. It works out to about $15k a year, and that's spread around a bunch of different donors.

  • +1
Kakadu18 (on 28 March 2023)

"Systematically negotiates exclusivity arrangements that keep the most popular games in Japan off Xbox."
The most popular games in Japan are only on Switch.

  • +9
SanAndreasX Kakadu18 (on 28 March 2023)

Yep. Sony ain't getting those, either.

  • +1
SanAndreasX (on 28 March 2023)

Hopefully the Japanese government tells Microsoft and Congress to go kick rocks.

  • +9
Qwark SanAndreasX (on 28 March 2023)

Probably, because their market is quite possessive of both Nintendo and PlayStation.

  • +1
Bandorr (on 27 March 2023)

Feels like this part is important. "A letter to Tai and Raimondo from six Democratic lawmakers from Washington state — where Microsoft is based — covers similar ground."

Hell of a coincidence..

  • +9
Azzanation Bandorr (on 28 March 2023)

Its also ironic that Sony claims N isnt competition to help block the ABK deal to now whos currently competing with Sony in Japan then.

  • -6
DonFerrari Azzanation (on 28 March 2023)

Nintendo have been claiming to not being in direct competition with Sony and MS since Wii. It is time for you to let that ship sail.

  • +1
DonFerrari Bandorr (on 28 March 2023)

And if you look for the donations.....

  • +1
Cerebralbore101 Bandorr (on 28 March 2023)

Most reputable games journalists aren't covering this because what you stated above is obvious. But WDA loves his anti-Sony narrative.

  • 0
Vizigoth04 (on 28 March 2023)

There in lies a problem, though. Microsoft hasn’t “created” exclusives of their own that appeal to that Japanese market. Or else 3rd party wouldn’t be an issue. At this rate Sony could buy Square/Capcom/Konami And be like well they’re ours now since you guys have Bethesda and Activision.

  • +7
Qwark Vizigoth04 (on 28 March 2023)

Sony shareholders wouldn't agree to that. Nor are exclusive contracts breaking any laws. Nintendo and Microsoft use them too. It's a good way to boost your platform after all.

  • +5
SquidLord Vizigoth04 (on 28 March 2023)

I mean fuck every company involved they're all awful, but if we're arguing about Xbox's history of exclusives? The original Xbox had shit like Panzer Dragoon Orta, Ninja Gaiden Black, Dead or Alive, Otogi, Phantom Dust, Steel Battalion, and Jet Set Radio Future. The 360 had a more concerted push with Mistwalker's Blue Dragon and Lost Odyssey, Ace Combat, Ridge Racer, Ninety-Nine Nights, and pretty good support of non-exclusive japanese games (which always ran better than the ps3 ports). There were very serious attempts at courting Japanese devs and players on the original Xbox and the 360.

I think the western success of the 360 made them care less about getting Japanese exclusives later in the 360s lifecycle and on the Xbox One but you still had Crimson Dragon (which was bad but it counts), Dead Rising 3 and 4, Dark Dreams Don't Die, and Re:Core (which I maintain was pretty good especially once it was patched with the definitive edition release), and a concerted effort to get Japanese games on the Xbox/Game Pass in recent years, notably with Yakuza, Resident Evil, Final Fantasy, Monster Hunter, and Persona. Recently they just put out Hi-Fi Rush from Tango, and they're publishing Kojima's Overdose.

I think if we're using the strict definition of 'creating' then yeah sure Microsoft has always been reliant on development partners and third party support, but it's not as if Xbox systems have a bad Japanese library, or a lack of exclusives to point to. If we're comparing the libraries of the PS5 and the Xbox Series then you'll very few games that don't hit both consoles that weren't given money by either console manufacturer, including games from Japanese developers. My opinion on the topic is more that it's a branding issue. Xbox is a very American brand and it is therefore unappealing to Japanese consumers.

  • +3
Brimac19 (on 28 March 2023)

MS has done very little over the years to create new Ip, especially new IP that Japanese gamers would be excited for. Low effort equals low sales!!!!

  • +3
Brimac19 (on 28 March 2023)

You mean 11 Microsoft backed members of Congress!!!

  • +3
Brimac19 (on 28 March 2023)

So what about Nintendo? Did they go out of business???

  • +3
dane007 (on 27 March 2023)

Oh damn. The war has started. This will be interesting

  • +2
DonFerrari (on 28 March 2023)

And yes Sony should also complain to the US congress that Switch is selling more than PS in Japan =p while at it MS should complain at UN about this. Would this be a preemptive strike to have any dev or pub purchase in Japan be blocked?

  • +1
Mozart1511 DonFerrari (on 28 March 2023)

Sony itself said that it competes with the XBox, as they are high-performance consoles. The company sabotaged itself...

  • +3
DonFerrari Mozart1511 (on 28 March 2023)

Nintendo have been saying they don't compete against Nintendo since Wii. Phil Spencer said their real competitor were Amazon and Google. So not sure what you are worried about.

  • +3
EpicRandy (on 28 March 2023)

This is nothing more than a performative stunt and won't amount to anything IMO. Even if the matter were taken seriously there would quickly be question as to why the actual supposed wronged entity isn't the one raising the issue to authorithy.

That's just US conservatism at play they want reciprocity even when there's reason to explain the lack of one. Like european cars in US vs US car in EU. Or Candian lumber in US vs US lumber in Canada.

I think the actual goal here, the goal of the alleged lobbying effort if there is to be precise, is to create and expose a clear division between political conservatism in the congress VS political anti Big Tech stance of the FTC.

  • +1
GoOnKid (on 28 March 2023)

Oh, how the turn tables.

  • +1
smroadkill15 (on 28 March 2023)

There is a real lack of accountability on Sony's part for having a hand in the "high end console market" definition. MS basically said, well then let's play ball, so now is using this against them. With that said, I expect little to come from this, but we will see.

  • 0
Johnd (on 28 March 2023)

Wow! Did Microsoft fall and bang its head when it told these senetors that have Microsoft funding for their campaigns.
They had a mountain of exclusives from japan during the xbox and xbox 360 generation. They had capcom, sega, team ninja and konami exclusives in their pocket.
It didn't move the needle at all there so they gave up investing heavily there.
Some neck to try that sh*t.
Its well know since even the early nes days that Japanese gamers aren't bothered by western games or companies.

  • 0
dane007 Johnd (on 28 March 2023)

But Sony has always kept certain Japanese games for generations.. Just this generation alone, they already kept away 3 ff7 remake games, forspoken and Ff16 that we know off. There's plenty more for sure. Took how many generstions to get yakuza and persona on xbox.

  • +1
DonFerrari dane007 (on 28 March 2023)

And guess what, if Yakuza and Persona are showing in Xbox is guess what, because Sony never paid to keep it away from Xbox.

  • +3
mjk45 DonFerrari (on 28 March 2023)

Yep sometimes it simply comes down to where are the sales and another thing that isn't talked much about is how in the case of the rise of Persona your looking at a spinoff series of SMT a respected but niche JPRPG with early Persona sales counted in the K's and until persona 3 being pretty much non existent in the West, now being a multi million selling JPRG series, so in that situation a feeling of gratitude and loyalty toward the audience that helped them gain that success can build up over time so when it comes down to considering why certain 3rd party games aren't everywhere what can be missed among the usual Roi and other development considerations is the influence of that platform history.

  • +1
dane007 DonFerrari (on 29 March 2023)

It's only been very recent. How do we know Sony didn't pay to keep it away.

Sony is known to pay it for generations hence how they got the first party studios that they have and recent ff7 remake is one of Many evidence that they do it. Not saying you are wrong but is very plausible.

It also could be because the contract ran out or maybe they want to expand the audience and thought gamepass was the best place to try it out.

Ms claims for this is far more accurate than Sony claims for the abk deal. There has bene many good jrpg that xbox had done for them during the 360 era anx few in the xbox one era. Theres more to it then Japan doesn't like American company. Also if its hard for American company to buy Japanese company then it should vice versa

  • -3
DonFerrari dane007 (on 29 March 2023)

Because if Sony had paid for it to never show on Xbox it would never show. Look at SFV, we are going to see SFVI on Xbox but not SFV.
For Yakuza you aren't seeing only 8 on Xbox, you saw all of them, same with Persona. So it was just something that when Sega done their ROI analysis it was better for them to have just PS version, dunno if you know but Yakuza 4 and 5 if I'm not wrong skipped the west on PS3, they only showed up when Zero and Kiwami made a good sale number on PS4 and then they started porting and remastering the other titles to PS4 (they were only PS3 titles and in Japan), and when MS approached them and offered money to go GP they accepted the deal, probably won't release the next one outside of GP because I doubt the sales of Yakuza on Xbox have been noteworthy, similar wise with Persona. Even though Persona 4 already being on PS2 and PSVita and Persona 5 already seeing 2 versions on PS4 (which would be BC for PS5) where do you think most of the sales of the Persona games remasters for current gen came from? Yes PS.

If there is a deal for permanent exclusivity it will never launch no matter what. FF VII likely had a deal of being PS only for a certain number of years (so years later you saw a PC release, but N64 couldn't run it so it didn't launch there, and there was no remasters and the like until recently but then FFVII,VIII,IX, etc launched their remaster PC versions on Xbox and Switch), from what we know SFV is forever console exclusive.

If there was a time duration for these deals it wouldn't make sense that Yakuza 1 and 8 would expire at the same time.

Some of the X360 exclusives RPG never launched on PS and we are over 10 years after that gen ended, so it was permanent exclusivity, some others were temporary and we saw launch 12-24 months after (some with performance being much poorer on PS3 others being complete edition with all DLCs).

So all in all, nope I don't trust MS claim even more when they go and list a title that was a Sony IP with co-development like Bloodborne as one of the allegedly titles that Sony made a deal that was specifically "never release on Xbox, but you can release anywhere else". First thing is that MS would have no legal way to have those documents at the time they made the comment. And from the documents Sony delivered in February we still haven't heard anything.

  • 0
dane007 DonFerrari (on 29 March 2023)

Add your

Its probaby why we are getting all the latest yakuza series. Looks like it did well enough despite not being available for awhile.

You can't exact persona to sell well after it's been out for many generations. Series itself totals 15.5 million according to google. That's not alot per game considering they ahd alot games out.

Which games? Mistwalker games such as blue dragon and lost odyssey never came out is probably because mistwalker doesn't make console games anymore. Their last one was last story on the wii. We never got some of ps3 jrogs as well like the enchanted arms and more.

You are probably right with sfv
My guess would be they paid for their development..

  • 0
DonFerrari dane007 (on 29 March 2023)

Series grow in number of people playing not in sales right?
Persona series only had major sales in number with 5, and there is no link between the entries like most of the sequeled games.

  • +1
dane007 DonFerrari (on 29 March 2023)

In order to grow people they need to download the game to play which is same as buying it digitally. Plus there's a massive sale for the series on xbox where most are 6.95 nzd. Fair to say I bought all except for yakuza 7

  • 0
SanAndreasX dane007 (on 28 March 2023)

A lot of Japanese franchises are on Xbox. Guess what? Xbox still sells like shit in Japan. They don't want what Microsoft is selling, full stop.

A lot of big franchises skip Nintendo on both sides of the Pacific. Nintendo still has four platforms that all sold better than the most successful Xbox console. Maybe it's Nintendo that needs to complain to the government about being locked out of high-profile titles. /s

  • +4
dane007 SanAndreasX (on 29 March 2023)

Not really.

Ff15 would have sold more than 1 million or even 2 million min

Post oddysey sold more then 1. In saying that most jrpgs don't sell many copies outside of final fantasy. Scarlett nexus sold around 2 million units total. Xenoblade chronicles 3 sold around 1.81 as of Dec 2022. Tales of arise sold around 2 million combined with xbox and ps. Xbox gets all takes of arise games. So for games like lost oddysey to do that on just impressive

Nintendo doesn't get many third party because their system is not powerful enough. That's a Nintendo problem. Switch is fairing better because switch is a big jump from wiiu and 3ds. If switch was as powerful as current gen consoles, they will have all the third party games

That's why. Ms is complaining.. They have invested but its not going anywhere. If Japanese companies can do business easily then it should be vice versa. I don't know what legal. Agreement USA and Japan has but if Japan is breaking the law then it should be penalised. Also if sony is complaining unfair advantage in the console space with abk deal then ms has the right to complain about unfair advantage in the console space in Japan

  • 0
SanAndreasX dane007 (on 29 March 2023)

That's not Japan's problem, though. American companies compete just fine. Apple and McDonald's are huge in Japan.

The problem is entirely a Microsoft problem. 22 years later, they are still just as completely ignorant of Japan and Japanese consumers as they were in 2001. Their executives consistently act boorish and domineering in their dealings with Japanese companies, like the Japanese companies should gladly submit to Microsoft's superior knowledge and authority. Now they're hiding behind the Congress of the United States, which frankly has bigger problems to deal with than somehow trying to force Japanese consumers to like Xbox.

Microsoft needs to face a cold, hard truth: they have no place in Japan and are lucky to be getting what Japanese companies are providing them.

I personally don't care about Sony. What I care about is that, when the Xbox Series X|S dies yet another ignominious death in Japan like its predecessors, that Microsoft doesn't drag some Japanese studio with a long legacy into the grave with it, having denied content to that studio's fanbase by locking it behind an ecosystem they don't want. It's far from the first time they've made ill-advised purchases only to destroy what they bought.

  • 0
dane007 SanAndreasX (on 30 March 2023)

You are not comparing apples with apples. Ofcourse apple will do well. Everyone needs mobile phones. Same with ms, that's the only os that everyone needs on their pc or laptop. So of course they would be popular in Japan. Not every person needs a gaming console. What do you mean ignorant?. They have tried quite hard and have made strides with this generation. Sure thy stuffed up with xbox one but with series s and x they made more effort. Have you not notice series x form being nice, small and compact which is good for Japanese homes. Gamepass been value for money which has shown that it has helped expand the genre despite being an old game. They have had more Japanese type games in all genre this generation and it looks like it may outsell 360 lifetime sales there. What ms needs is to buy 1 or 2 publishers. Preferably capcom, Sega or atlus or all 3.

Wht ecosystem are they locking now?. With gamepass you don't have to buy a console to access it.. It's the most consumer friendly product out there in the gaming industry.

Sony has done the same with their ill purchases that they destroyed. It happens as no one is perfect.

If what they said its true and there's a legal agreement between the 2 nations and Japan is breaking that agreement, then changes may happen. Changes need to happen with gaming in Japan. It needs to be shared equally like how it is in the US

  • 0
Mozart1511 (on 28 March 2023)

Democrats and Republicans agreeing on something? That's a rare thing to see lol.

And now Lina Khan? If before it was just Republicans questioning the gaming market, how do you feel about Democrats questioning that too? Can you still sleep peacefully?

  • 0
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VAMatt (on 28 March 2023)

I hope the fallout from this merger isn't going to lead to a bunch of new regulation or even just regulator attention on the video game industry. That's the last thing that we need.

  • 0
Imaginedvl (on 27 March 2023)

Well Sony played balls now they may really regret it and I feel this is only the beginning.

  • 0
KazumaKiryu (on 28 March 2023)

Microsoft pays American politicians to publish false government-level statistics and tries to weaken Sony.
500.000 Dollar for US-Senatorin Maria Cantwell, by Microsoft- is that official now??!
If true, wow.

When asked what about Nintendo(sales figures): "They don't care, their games are just for kids" lol? this is an insult, isn't it? Microsoft is becoming more and more arrogant and trying to keep competition small.

When asked why PlayStation is so much more popular in Japan, the response was cautious. The interest of the Japanese people probably doesn't matter. Microsoft also criticizes the fact that so few Japanese developers want to work with their group.

It is ironic that Microsoft accuses its competition of monopoly. Microsoft has bought more studios and ip's in recent years than Sony. Sony could have bought maaaany the studios in the PS2 era, but didn't - because laws and rules come first in the world. the big US group Microsoft wants to take further steps to directly weaken Sony - even outside of America. In my opinion an absolute smear campaign.

  • -2
Mozart1511 KazumaKiryu (on 28 March 2023)

Playstation sold three times more than the XBox in the last generation. The VGChartz confirms this! Sony has sabotaged itself at the FTC, CMA and EU lol. It managed to draw all the attention of politicians to the gaming sector, and it still wants to use political influence against a company that participates in several projects for the American government, so these are the fruits that Sony itself has sown.

Sony did not buy more studios, as Microsoft itself before 2020 did not invest in its gaming sector, it always let Sony buy more exclusives from third-party studios, but Sony competes with a company with broad resources, so for it to change its destiny of its XBox division is a question of "how much will we invest to compete with Sony and Tencent?" Sony's desperation is that its net profit was US$ 7 billion and its competitor's was US$ 68 billion, so it knows it cannot compete, but it never thought of establishing a partnership with big tech.

  • +1
DonFerrari Mozart1511 (on 28 March 2023)

Where did you got that PS4 sold 3:1 against Xbox? That would be something close to 120 vs 40M and it isn't near that from what we know it is closer to 2:1

  • +1
ClassicGamingWizzz (on 28 March 2023)

I am sure they got some " funds " to do so. But we will find out soon. Edited, wait it already been found. Sad

  • -3
Azzanation (on 28 March 2023)
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