In principle, foreign game companies can enter Japan through any of the following avenues (in descending order of resource requirements):

• Incorporation
• M&A
• Joint venture
• Investment (Scopely’s case)
• Strategic Partnership
• Remote market entry

Savvy Games Group-owned Scopely has been active in Japan in different forms for several years now, also via Niantic’s Tokyo office that was opened by the Pokemon Go company (which Savvy also acquired) all the way back in 2015.

Scopely says the deal’s goal is not only expanding their business in Japan but also developing IP and fostering creators.

In this case, AuKnow is led by Takuma Akitsu whose claim to fame is his role in planning, development, and live-ops for Japanese mobile game sensation Uma Musume – a position he left in 2024.

I have been active in this business for 15 years now and cannot remember such an announcement.

What is further interesting is that this is a typical early venture deal, as AuKnow is a brand new studio with (most probably) no revenue, no released products, just 30 employees and October 2025 as its establishment date.

Scopely seems to bet that Akitsu’s background and that of his team will enable them to pull off its mission successfully, namely to combine the creation of hit mobile (and PC) games with innovative IP production and cross-media development.

Terms of the deal were not disclosed. Scopely in Japan is led by Niantic graduate Kei Kawai.

XBOX’ Long List Of Japan-Specific Initiatives

Over this long time, XBOX tried a lot to win in Japan:

Bill Gates was personally present in Tokyo in 2002 when the original XBOX launched in the country, they bankrolled several exclusive made-in-Japan RPGs, funded made-in-Japan action games, went ultra-niche, locally developed for-Japan games through “Microsoft Game Studios Japan”, announced to buy a local studio (and actually did), sent former XBOX boss Phil Spencer and other execs here here frequently, signed Hideo Kojima, had booths at the Tokyo Game Show, hired top talent from competitors to run the business in Tokyo, tried pushing Game Pass into the market with discounts and POS promotions, brought the XBOX FanFest to Tokyo, ran expensive TV commercials in Japan, tried supporting local indie developers with the ID@XBOX program, scored Palworld early, made the ROG XBOX ALLY available in Japan, did PR, etc. etc. etc.

However, all four XBOX generations failed in Japan, and there is a plethora of articles, think pieces and videos online discussing why.

I myself believe there is no single major reason but rather a mix of them.

Let me pick just one: It is often very hard for US execs to understand the importance of certain Japan-specific peculiarities, including mind-bogglingly easy-to-fix points like not even getting the translation of the console’s own UI right – after literally decades of operating the business in Japan.

Local users absolutely catch these “details” and do not view them as minor annoyances but as a reflection of how serious XBOX actually is about Japan – and they react accordingly to the brand.

XBOX’ Possible Next Tactical Steps In Japan

It was clear that the new management would not pull out a hammer but an entire bulldozer to “fix XBOX”, and I said that much in February this year.

In Japan specifically, I believe there is a whole range of possible and radical steps the company could take in a tactical sense, so allow me to speculate about them.

1. Let me start with a thought experiment regarding the brand.

XBOX as a brand in Japan has been rather lifeless for a long time now: If it is known at all, XBOX is perceived as a foreign name that never made it.

This may sound radical, but one countermeasure would be to de-emphasize or even remove the XBOX brand name in Japan altogether.

I am totally aware this is easier said than done (XBOX is internationally used across games, services, hardware, company websites, stores and other properties), but there is a precedent for this, namely how Samsung in Japan once dropped its own name on its own phones sold here.

In 2015, Samsung decided to rebrand all devices and associated services to just “Galaxy” due to political tensions between the two countries and the low perception of Korean products back then in Japan.

Again this is all more of a thought experiment, but Samsung did succeed and put their own brand name on their phones in Japan back again in 2023.

2. This is not a recommendation, but I believe the rumored job cuts (as of June 30, 2026) in Microsoft’s XBOX division might also affect the gaming team in Tokyo in certain departments, possibly along with top staff reshuffling.

I might (and hope to be) wrong about this, especially because the Japanese team does not draw particularly high salaries and is rather modest in size.

This point rather refers to point 4 below.

3. I would also not be surprised to see the opposite for the XBOX software team happen in Japan, a stronger mandate to further try to identify and then “export” excellent Japanese games to the global XBOX audience.

For instance, I am not sure about how and by who exactly Palworld was “discovered” internally at XBOX (and brought to Game Pass day 1), but it would be great for XBOX globally if more Japanese games like that mega hit join the platform in the future.

My point is: Initiatives like with Square Enix, Kojima Productions or Atlus to break PlayStation-exclusivity are not going to move the needle for the platform in Japan anymore, but they do have a global effect and make a lot of sense.

4. One can only estimate on how much money XBOX lost with hardware over the last 24 years in Japan (I once did, and my head still remembers itself spinning).

It is not only the hardware in the box per se, but everything associated around it: negotiating, setting up and managing entire sales channels and supply chains online and offline, customer support, warranty and repair services, marketing, legal and compliance, etc. etc. – and all this must be done locally by locals.

The problem: As mentioned above, XBOX hardware sales in Japan have been a catastrophe for over two decades now.

As the most recent example, 434 Series X and 29 Series S units sold earlier this month in Japan (June 15 to June 21, 2026, according to Famitsu). Since launch in November 2020 until today, both variants sold less than 700,000 times in Japan combined.

Who gains anything from this? What is the purpose of having numbers like this?

I understand there are reasons like prestige, corporate pride, the need for visibility in the world’s gaming country (or perhaps just a good dose of a decade-long mix of complacency and defiance) involved here, but this business in Japan stopped making economic sense a long, long time ago.

As one consequence, physical XBOX game sales are embarrassingly minuscule in Japan (much lower than anywhere else), too.

So this would be another radical tactic, but I would not be terribly surprised to see this niche physical business get axed or transformed in some way by the new management.

5. The upcoming hardware “Project Helix” is in a different bucket, as it will be marketed as a hybrid between XBOX and PC – a platform that is actually growing in Japan.

Success is not guaranteed and details around the device are scarce, but it might have better chances to sell well in Japan than any platform before it, also because Project Helix as more of a PC is at least set to avoid directly competing with Sony and Nintendo.

6. As hinted at above, XBOX has been trying to push Game Pass in the Japanese market over the years, but in my perception at least, the efforts have been very modest – dramatically too modest.

This has always been very surprising to me because I believe in Japan, Game Pass is the biggest asset for XBOX – more so than their exclusive games, and more so than in other countries.

For example, they used this billboard in a station in Tokyo to promote the service a few months ago: It says “This is our play style!” in Japanese – without any information of what Game Pass is, how much it costs, which platforms it supports or how to get it. The game shown is US-made. What sense does this make?

Still, Game Pass is perhaps the biggest opportunity for XBOX has to turn around things in Japan: It’s not cheap (anymore), but the software catalogue is great, it offers a whole range of Japanese games now, and it is the brand’s ultimate USP here, too.

So XBOX now might really put their entire focus on this service in Japan, possibly diminish the XBOX brand to some extent (just call it Game Pass?) while doing it and combine all that with a focus on PC gaming and/or Project Helix (see point 5).

Now, what I hope will not happen is what I recently heard during a business dinner I had with certain Japanese gaming royalty where one of the attendants brought up a more theoretical, much simpler and very brutal tactic: that XBOX might exit Japan altogether and never look back.

Please watch the video here (roughly 15 minutes):
https://www.cnbc.com/video/2026/06/05/one-year-of-nintendo-switch-2-expectations-are-in-super-mario-galaxy.html

• Net sales: 531 billion yen (US$3.3B) or + 29.3% on the year on a yen basis
• Operating profit: 144 billion yen (US$900M) or + 43.0%
• Net profit: 120 billion yen (US750M) or + 70.7%

All of these are record numbers for TPC, and keep in mind the yen-US$ conversion rate makes the sum look rather small in dollar terms.

In the fiscal in question, TPC released blockbuster Pokémon Legends: Z-A on the Nintendo Switch and continued to see ridiculous sales in its printed trading card business worldwide.

What is particularly striking is the big plus in net profit.

As a private company, TPC does not publish any statements on these numbers, but as I repeat every year, revenue sharing or any other internal arrangements between the company and its owners Nintendo, Creatures and Game Freak remain a mystery.

It is public that Nintendo holds 32% of voting rights in TPC.

More on who owns The Pokemon Company in my video from last year:

Please have a look: www.kantangames.com

To be clear, I could not get into all details and all my thoughts on the company, but please have a watch:

One of the most critical steps for foreign mobile game studios entering Japan is how to tackle user acquisition (UA) in Japan – and over the last 15 years in this business, I have seen the most incredible things when it comes to UA (many of them very, very bad for the studios).

(We can talk about concrete examples next time you see me at an event out there in the world.)

There are a lot of topics I could cover about the uniqueness of doing UA in Japan, i.e.:

• The prevalence of flat 20% commission fees as a general rule
• The “interesting” role of dominant players such as Dentsu and CyberAgent in UA in Japan
• The level of gossiping about foreign clients among the different UA providers that are theoretically supposed to compete with each other (i.e., if you try to play hardball with provider A, they might tell provider B and C and D the next second)
• The significance of TV advertising in UA in Japan (yes, it still works and is still being used aggressively)
• The “Junior UA expert” with no experience they might put on your account as a foreign studio without a clue about Japan

The Dominant Role Of Agencies In UA In Japan

One major unique point in this context is the critical role agencies play in the Japanese market.

Among Japan’s mobile gaming companies, UA is typically outsourced to advertising agencies – often in full and with adjacent activities such as traditional marketing, PR etc. on top.

This includes almost everybody, including the several publicly traded, large-cap mobile game studios in Japan: Needless to say, these companies do have staff with UA or marketing expertise in-house, but the heavy lifting is typically handed over to outside agencies.

These agencies handle the entire UA spectrum for their clients, i.e. ad buying, consulting, data and analytics, influencer relations, creatives, managing dashboards, partnerships (i.e. with brands for collaborations), etc.

It is a stark contrast to the West, where mobile game companies usually not only have most or all of their UA activities internalized but view their UA teams as valuable assets that they need to stand out in and compete in a cutthroat market. (I realize Western studios, too, hire UA consultants or agencies – but again, nowhere near the same level as in Japan).

The usual suspects in the Japanese UA space include the aforementioned CyberAgent and its subsidiaries, Septeni, Adways or Carta Marketing Firm (formerly known as Zucks). In several forms, the “traditional big 3″ Japanese agencies Dentsu, Hakuhodo, ADK (now part of Korean PUBG studio Krafton) do play a role, too.

For foreign game companies planning to enter the Japanese market, it is critical to understand not only the UA landscape itself but also the role of agencies within – and, most importantly, which one to choose.

As an ending note, I can say from experience that most of the times, foreign studios can start by exploring the Japanese market “remotely” first – meaning without a local agency, as the range of UA channels to reach Japanese users has become more global in recent years. An “upgrade” to cooperate with a local agency is always still possible later, i.e. if the time has come to go “full-on Japanese” on local ad networks, local social media or TV.

If you are interested in discussing business related to gaming, Web3 and Japan, let me know and we can meet up in person.

Please get in touch via Email (Serkan at kantangames.com), LinkedIn or X.

I made this video to provide some background on who controls the Pokemon brand, ownership of The Pokemon Company in Japan and a quick look at Pokemon financials such as sales and profits.