Microsoft’s struggles selling the Xbox in Japan are legendary, and here is the definitive account of its failure, at Eurogamer. The factors at play range from a poorly received introductory speech at the 2001 Tokyo Games Show by Bill Gates, to a lack of understand of and respect for complex Japanese customs by Microsoft businessmen, to a controller that the Japanese simply hated,
…seemingly made for hands the size of those pointing finger gloves you see at baseball games. It was everything the Japanese thought an American-made games console would be…The Japanese “flipped out”, [then Xbox director of third party relations Kevin] Bachus says. “They said, ‘obviously this is going to fail. Nobody is going to buy this.’ Then they started rethinking their commitments to the platform. They said, ‘this combined with the enormous giant console says you really don’t intend for this to be successful in Japan.’
The Xbox team didn’t come to this year’s Tokyo Games Show; imagine Sony or Nintendo simply skipping an E3. For all we talk about the decline of Japanese gaming in America, American gaming has never really even had the chance to decline in Japan.