Xbox Experiences Growth in Japan Amid Challenges

Xbox is seeing growth in Japan, with cross-platform player engagement across its gaming ecosystem rising significantly throughout 2025. With Japan being one of the world’s largest video game markets, this newly reported momentum offers an encouraging sign for Microsoft, standing in contrast to recent challenges that Xbox has faced.

Xbox Logo over Earth

Although Xbox Series X/S sales have lagged compared to the Xbox One in recent years, Microsoft reported a 22% year-over-year decline in hardware sales for FY25 Q4, ending June 2025. Meanwhile, Xbox Game Pass growth has slowed significantly.

Xbox Is Growing in Japan, Phil Spencer Says

According to Microsoft Gaming CEO Phil Spencer, Xbox is experiencing an uplifting performance in Japan. He noted a 20% increase in total playtime, indicating growth across Xbox consoles, PC games played through Microsoft platforms, and Xbox Cloud Gaming users.

Phil Spencer

Spencer held that providing engaging content for Japanese players is vital for future growth, especially with recent announcements like Forza Horizon 6, set in Japan.

Why Japan Is Attractive to Xbox (and Any Other Gaming Platform)

Despite a history of modest presence, Japan remains a critical opportunity for any gaming platform, ranked as the third-largest market in terms of revenue, with Newzoo statistics indicating a market value of $16.8 billion. Japan also has 29.7 million console players and 14.4 million PC gamers as per the latest CESA Game Industry Report.

Another Promising Sign for Xbox Business: Revenue Growth

Microsoft has reported annual revenue growth of 16%, the best performance since 2020, indicating a potential turnaround for its gaming division after grappling with prolonged growth issues.