PC gaming is experiencing a remarkable surge in Japan, presenting Microsoft with a distinctive opportunity to enhance its presence through the PC Game Pass subscription service.
Market Growth and Opportunities
Recent data from the Computer Entertainment Supplier’s Association (CESA) reveals that the PC gaming market in Japan has witnessed substantial growth. Analyst Dr. Serkan Toto from Kantan Games highlights that revenues from PC game software have nearly tripled between 2019 and 2023, escalating from 82 billion yen (approximately 1 million) to an impressive 236.4 billion yen (around .589 billion). This surge translates to a 187% increase in revenues and a compound annual growth rate (CAGR) of 23.5% over the five-year span.
In terms of market share, the contribution of PC game sales to total software earnings has risen significantly, climbing from 5% in 2019 to 13% in 2023. This notable shift indicates a growing preference among gamers for PC gaming in Japan.
As the appetite for PC gaming expands, Microsoft finds itself in a prime position to capitalize on this trend through its Xbox Game Pass for PC. While subscription-based gaming models have historically faced skepticism in Japan, where gamers often prefer to purchase and own their titles, the compelling value and extensive content offered by Xbox Game Pass appear to be persuading a segment of Japanese users to embrace the subscription model.
Phil Spencer, CEO of Xbox Gaming, confirmed that the number of Xbox Game Pass PC subscribers in Japan has quadrupled this year, underscoring the service’s rapid growth. He remarked,
“Xbox Game Pass has an important meaning on Xbox. In particular, the growth of PC Game Pass is remarkable. The size of the Japanese PC game market has roughly doubled in the past three years, but the number of PC Game Pass users has quadrupled. Game Pass is growing faster than the market, which is great for the Xbox brand as a whole.”
Spencer also noted that the company is witnessing significant growth across Asia, which encompasses a variety of regions beyond Japan. He stated, “We’re continuing to see growth in the region. This year, more people are playing with Xbox, across all devices in Asia, than ever before. We’ve seen the largest number of Xbox console players in the region to date.”
Microsoft has been diligently working to establish a foothold in the Japanese gaming market, forging partnerships with prominent publishers like Square Enix. However, it is important to note that Xbox console gaming still represents a relatively small segment of users in Japan, highlighting the distinct dynamics of the console and PC gaming landscapes.
