Will Sony's PlayStation 4 Be a Bigger Flop Than Nintendo's Wii U in Japan?

Source: PlayStation.com

In Japan, console gaming is dead. The latest weekly sales tracking from Media Create is the latest worrying data to come out of the country. While numbers are disappointing across the board, the week's big loser was Sony's (NYSE: SNE  ) PlayStation 4. The device slipped below 10,000 weekly sales, selling a meager 8,480 units, according to Media Create's numbers. For comparison, the tracker's numbers show Nintendo's (NASDAQOTH: NTDOY  ) disastrous Wii U console moving approximately 7,600 units in the week.

The PlayStation 4 was once touted as a potential savior for the traditional Japanese games industry. Now, it seems unlikely that Sony's newest console will be able to outperform the PlayStation 3's somewhat disappointing showing in the country. What does the future hold for gaming in the Land of the Rising Sun?

What's happening with the Japanese game industry?
Recent fiscal reports from major Japanese games publishers like Square Enix, Konami, and Capcom bear a common strategy for the future. Each of these companies will move forward with an increasing focus on mobile development, while producing occasional triple-A titles aimed primarily at Western markets.

Series like Resident Evil from Capcom (NASDAQOTH: CCOEF  ) or Metal Gear Solid from Konami still have global blockbuster potential. But, Japanese publishers are not making the types of console games that have the potential to stimulate the Japanese console industry. For the most part, what sells in the region is drastically different from what's popular in the West, making it difficult to justify substantial production budgets. Naturally, this has a negative effect on Japanese console sales, and it looks like the situation has reached critical mass with the PlayStation 4.

Comparing PS4 and Wii U

Source: Nintendo.com

Post-launch, the PS4's sales in Japan have been horrific. Courtesy of Japanese gaming outlet Famitsu, Sony's latest console is actually among the fastest to drop below 10,000 weekly sales, having dipped to approximately 8,500 units sold just 11 weeks after its release. It took the Wii U 12 weeks to achieve that dubious milestone, the Dreamcast 16 weeks, and Sony's PS Vita 17 weeks to dip below 10,000 sales per week. Those are not the platforms that a company would want its new console compared to. Being outperformed by them paints a worrying picture for both Sony and the Japanese gaming industry at large.

At this point, there actually seems to be a decent chance that the PlayStation 4 will be outsold by Nintendo's Wii U in Japan. Lifetime sales of Nintendo's struggling platform are approximately 1.73 million in the country, while sales of PlayStation 4 are at approximately 567,000. The Wii U hit Japanese store shelves more than a year before Sony's latest console, so the lead is easily explainable, but it's uncertain whether or not PS4 will be able to build the momentum needed to close the gap. Based on PlayStation 4's known upcoming lineup, there is a clear shortage of titles with the potential to turn things around. Nintendo can at least rely on Mario Kart 8 and Smash Bros. to drive some interest in their ill-fated platform.

Which games could have an impact on PS4?

Source: PlayStation.com

For the time being, the only PlayStation 4 game slated for this year with the potential to spur substantial Japanese interest is Deep Down. The game was originally said to be a launch title in the territory, but the fact that the title does not currently have a firm release date makes it likely that this was never going to be the case. That said, PlayStation 4's prospects should see a bit of improvement within the next month.

While sales of the platform will continue to disappoint, June's E3 gaming show should see the unveiling of at least a few big games with Japanese appeal. Already-announced big hitters like Final Fantasy XV and Kingdom Hearts III from Square Enix will arrive after this year and prove somewhat helpful in courting gamers to Sony's platform. The console will have suffered from the effects of game drought long before these titles debut, however. A lack of games that appeal to Japanese tastes is already doing serious damage to the console.

What does PS4's disastrous Japanese year mean for Sony?
2014 is going to be a rough year for the PlayStation 4 in Japan. Without meaningful software releases, weekly sales of the system could soon drop below those of the Wii U. This performance highlights Sony's need to prepare for a future in gaming that isn't dependent on hardware. At the very least, it throws a kink into plans for future hardware releases. 

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Read/Post Comments (15) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 18, 2014, at 4:33 PM, NonCasualGamer wrote:

    Doesn't really surprise me. The Japanese love their games, and everyone knows the "PS4 has no games."

  • Report this Comment On May 19, 2014, at 6:27 AM, fredd4545 wrote:

    ps4 have loads of games! and morethen xbox one ;) not bad for 6 months

  • Report this Comment On May 19, 2014, at 11:55 AM, kdognumba1 wrote:

    Lets be honest here. The last home console to actually do well in Japan was the PS2 but even while they did well, Japan as a whole has been moving to portable devices since the Gameboy was introduced.

    Furthermore, because the handheld systems are so popular in Japan and the cost of developing games for the consoles is so high, most Japanese developers (like any developers anywhere) would think it's better to make games where the audience for their games are, especially with it being cheaper. Of course the major publishers can do what they want as they have more money but most of the devs can't do that, which is why you seen a dramatic decrease in Japanese support from PS2 to PS3 and gen 7 home consoles and even more so with this generation.

    Because of this, this left PS4 with mostly western games, leaving a very small niche audience to sell the PS4 to in Japan.

  • Report this Comment On May 19, 2014, at 12:52 PM, sonnykohler wrote:

    Apparently, in Japan, having the smallest of everything is still a good thing.

    I'll stick with gaming on my 112" Plasma. I'd probably walk in to traffic if I tried to game mobily.

  • Report this Comment On May 19, 2014, at 12:59 PM, speculawyer wrote:

    I really don't understand gaming in Japan. Dating simulators. Mobile is big but consoles are dying. The fetish with girls with big eyes and big boobs.

  • Report this Comment On May 19, 2014, at 1:07 PM, GuitarJim wrote:

    The death of console games is inevitable. The Japanese reached this point first, primarily because of the kind of games they prefer to play. When most gamers in the west have a broadband pipeline wide enough for high resolution and high framerate graphics without dropouts then we'll see a rapid migration to cloud based gaming, and the death of console games in the west.

  • Report this Comment On May 19, 2014, at 1:09 PM, bbbygenius wrote:

    I think it's important to keep in mind Japanese culture. They have the lowest child rate in a long time. Most adults are working 1-2 jobs and are always on the go. Most of people free time lies in their travel and commutes.... so gamers will prefer handheld over system. It's not getting any better either, seeing as Japan's death rate exceeds it's birth rate. meaning over the last decade... not as many kids are being born which means a large dent in the gaming market who would normally be clamoring for a new system.

  • Report this Comment On May 19, 2014, at 3:01 PM, Vitabrits wrote:

    Population density is the main reason mobile gaming took off in Japan, especially with smartphones. Even with a 3DS, you could turn it on and find someone to play a popular game with you if you wanted to. Hardly the case in NA and much of Europe.

  • Report this Comment On May 19, 2014, at 4:58 PM, pottedmeat wrote:

    Two words, Monster Hunter, no better way to move hardware in Japan.

  • Report this Comment On May 19, 2014, at 5:23 PM, awang0718 wrote:

    The Japanese gaming industry is not "dead" contrary to what most people say, but it has evolved. The last home console that sold big in Japan was the PS2 (22 million units sold), which is more than the Wii and PS3 combined. Console gaming is dead in Japan, at least on the third party side of things.

    The Japanese gaming market revolves around handhelds and mobile devices. The DS (33 million units), the PSP (20 million units) and the 3DS (16 million units and still growing) are hugely successful (The PS Vita is doing better than PS4). Japanese third parties will support the platform that is currently selling, and that is the 3DS. This is a sign that Nintendo's future handhelds will dominate the entire dedicated gaming business in Japan in the next 5 years.

    Despite the rise of portable gaming in Japan, the real reason the PS4 is selling so poorly in Japan is because there are very few Japanese oriented games like Pokemon, Monster Hunter, Animal Crossing, Dragon Quest, or Puzzle and Dragons that ever hit the PS4.

    The last time there was a major PS4 game released was Metal Gear Solid 5 Ground Zeroes. That game was released 2 months ago, and PS4 sales have been dropping since then. And yes, the PS4 sales will eventually drop below Wii U sales, if that hasn't happened already.

  • Report this Comment On May 19, 2014, at 5:38 PM, GrooveMachine wrote:

    Not sure why MF has to keep reminding everybody that the Wii U is a flop, especially with MK8 coming just 10 days away. It really is a nice system with some quality games, free online and backwards compatibility. Its the lack of advertising on Nintendo's part combined with the media constantly telling the public how poorly its selling thats giving it such a bad rap. It does have an install base of nearly 7 million (6.17 as of a few weeks ago in case anyone wants to jump down my throat, but lets be honest, MK8 should push it to 7mil sooner than later), which isn't really that bad.

    Calling the PS4 a flop is completely premature, even in its home country. Maybe its not going gangbusters like the way the western media wants it to, but this is a marathon, not a sprint. I'm sure that Sony will be just fine in its home country. Still producing great PS3 numbers and its awesome library of games probably isn't helping the new system either.

    What will be most fascinating, in my opinion, will be how the Xbox will do in Japan. Microsoft doesn't traditionally do well there. If those numbers are ridiculously low, then maybe there is something to be said for the demise of console gaming. Which is really too bad, some of us just aren't into tablet/phone gaming and will never be. Long live the consoles.

  • Report this Comment On May 19, 2014, at 5:38 PM, kdognumba1 wrote:

    @Pottedmeat

    Wii U has a Monster Hunter AND a Dragon Quest and that still isn't moving hardware. I doubt any series will make a difference in how well home consoles will do in a region that prefers portable consoles.

  • Report this Comment On May 19, 2014, at 6:34 PM, AudieMurphy wrote:

    Several people have touched on it but it's more about mobile gaming vs console than what kind of games the PS4 has. It does make a difference, but the audience in the US is all about big screen HDTV's with surround sound and all the trimmings while the market in Japan isn't. How about an article with some research into the number of gamers who still use any console, how often, do they have a big screen tv, do the watch a lot of media on it. In other words, when an American spends hours every day on his cable with 200 channels, Netflix and everything else on his Samsung 60" a next gen console fits right in. If you don't typically do that or even more so don't have all that because you rely on your phone/tablet it's not a surprise. Conventional thought is that the typical gamer plays on the go in public transportation and with friends; it would only be surprising if it found the majority still played last gen consoles but didn't want to upgrade.

  • Report this Comment On May 19, 2014, at 7:29 PM, JJ82 wrote:

    Japan is turning into a mobile gaming nation as can be seen by sales of handheld units over the last few years. The population of teens is low and the majority of gamers are mid 20s+ and working full time with lots of public transportation use.

    This plus the fact that so many staple Japanese companies just plain are not pushing out the amount of console games that are for the Japanese market, is only making it worse. The handheld systems do not have this problem.

    The PS4 released in Japan without a single game for the Japanese market and I believe they only have ONE released since then though a few are coming up in the next month, with a steady stream after that. This will boost sales and by the end of the year several big games will be released and should give the system a decent holiday shopping boost with sales.

  • Report this Comment On May 21, 2014, at 1:53 AM, kcdaf40 wrote:

    You need to remember Japanese are very simple minded. Look at the games on the WiiU and you can see what I mean. It seems like handheld systems are not as big here in the states. People here want consoles. I know I do.

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