Xbox has an embarrassing Square Enix problem

Xbox, to hear Microsoft tell it, is losing. This has been the crux of its argument to persuade the world’s regulatory bodies to approve its acquisition of Activision Blizzard, something which would bring the likes of Call of Duty, World of Warcraft, and perhaps most pointedly King’s suite of mobile games, including Candy Crush, under the Xbox banner. It’s a huge acquisition, which is why it’s garnered so much attention. But Xbox’s argument is clear: we’re just a widdle guy. We need this. Sony is miles ahead.

And so it is in most territories, honestly. It’s not a mischaracterization of the situation. But one element of the Activision Blizzard acquisition that has always baffled me is the optics of what Xbox gains. Which of Xbox’s problems does it solve?

Yeah, Call of Duty is massive, and would be a huge gain. But it’s not like Xbox doesn’t have access to IPs and have games in development that could shake up the shooter world. Warcraft is likewise a huge tentpole, but Microsoft already has both an MMO and an RTS in Elder Scrolls Online and Age of Empires. These don’t fill a gap.

I guess Crash and Spyro do fill a niche – before you say it, yes, they are more recognizable than Banjo. So that bit makes sense. So too does King: Xbox is weak in mobile, and King feels like the most important piece of this puzzle, even though the regulatory fight is over Call of Duty.

But none of this addresses what I think is the largest gap in Xbox’s core gaming offering. It’s a question of and a problem with Japan. And nowhere is it better exemplified than in Square Enix.

Square Enix has just announced that Live A Live, the previously Switch-exclusive remake of a stone cold 16-bit classic, is coming to other consoles. What’s it coming to? PlayStation 4, PlayStation 5, and Steam. That’s it. Sorry, Xbox owners.

This is a pattern. Depending on how you want to count it, Square Enix has almost or well in excess of 10 announced releases for this year – and not one of them has or is set to be published on Xbox.

Forspoken was a PlayStation 5 exclusive, also on PC. We also know that Sony had its fingers (and cash) in that game’s development, so that one tracks. The same is true for Final Fantasy 16, which is why its producer keeps jokingly referring to the ‘Power of PlayStation’ when presenting it. But then it gets weird. Theatrhythm: Final Bar Line, a relatively low-impact rhythm game, was only on PlayStation and Switch. Theatrhythm will likely come to PC later – I’d happily bet that Square Enix was worried about piracy and modding of a rhythm game when there’s DLC still to land, and so pushed PC out. But it probably won’t come to Xbox.

The most bizarre example is Octopath Traveler 2, of course. It was on everything – PC, Switch, PS4, PS5 – but no Xbox. This is even more bizarre because the first Octopath Traveler was on Xbox, but not PlayStation. I feel like I’m about to go cross-eyed.

This ain’t new, either. Star Ocean: The Divine Force, The Diofield Chronicle, Stranger of Paradise, Chrono Cross, and Crisis Core Reunion all came to Xbox last year, but the list of things that hit almost everything else but skipped Xbox is far longer. Discounting true exclusives last year Xbox missed out on Romancing SaGa, Tactics Ogre Reborn, Valkyrie Elysium, Voice of Cards, The Centennial Case and even bloody Babylon’s Fall. Quite a few of these games struggled despite being brilliant, too. One would think being on more platforms would’ve helped.

Many future games are slated to not come to Xbox, too – including all six of the Final Fantasy Pixel Remasters, which will probably be dated and released any week now.

Basically, if you’re interested in a certain type of game out of Japan and have an Xbox, you’re probably s**t out of luck. It’s not just Square Enix, to be clear; smaller brands like Nippon Ichi also continue to largely skip Xbox. In the best case scenario, it’s a coin flip. Square Enix’s random scattershot approach to its releases on Xbox (Octopath 1 but not its sequel, Crisis Core but not FF7 Remake) simply exemplifies it. Plus, Square Enix is Japan’s most prolific third-party publisher.

Sure, if you just want Japanese games, Capcom has you covered. But Capcom also aren’t making these same sorts of games, generally; visual novels (where’s a new Ace Attorney, you cowards?!) and, yes (with apologies to Naoki Yoshida) Japanese RPGs.

To me, it’s a problem. Xbox does appear to be making efforts, too. But the question is… are these efforts actually making a dent with publishers?

Let me give a specific example. A couple of years ago, Xbox threw a bunch of money at Square Enix to bring a selection of its games to Xbox and Game Pass. We got a buffet of Final Fantasy titles in Game Pass across a couple of years, and also Dragon Quest 11 and Octopath Traveler. Before that, Xbox had made strong overtures to secure Final Fantasy 15 and Kingdom Hearts 3. But, a few years later, Xbox is out in the wilderness for Square games again.

Anyone made a new Final Fantasy fan by Game Pass now has to go to Steam, PlayStation, or Switch to play more titles. Will Dragon Quest 12 and Kingdom Hearts 4 even be on Xbox? Neither has platforms announced, but absurdly, it feels unlikely.

Some wannabe ‘analysts’ and professional morons on Twitter are squinting through their binoculars with the lens covers still on and ruminating that this is probably all part of a plan, that this is indicative that a deal for Sony to acquire Square Enix is already in place, just waiting for the Activision mess to wrap up. The argument is Square Enix isn’t producing titles for Xbox because it knows that offer is coming. Further, the suggestion is that the fire sale of Square Enix’s Western studios last year was also part of preparation for a deal. All of this seems fairly far-fetched for two public companies, honestly. If Sony does acquire Square Enix, I doubt these actions have much to do with it.

But equally, there’s clearly a strong relationship here – perhaps from the days when Sony owned a large share of the company (it no longer does), or just from the echoes of the Japanese concept of ‘Keiretsu’: thinking that stretches from iron-clad agreements to the simple idea that corporately and culturally aligned companies might casually help each other.

And then there's the sales, obviously. Cutting fat Game Pass deals helps to move the needle, obviously - but publishers also need to feel like their games are going to sell to put them on Xbox. The only way to do that is to build an audience for those games... and the only way to do that is to have the genre itself, in a broad sense, available on Xbox. It's a vicious circle. And the only thing that can break that is consistent investment from Xbox itself, as they're the only ones truly incentivized to care. Unless there's a Game Pass offer on the table as for Dragon Quest or Octopath Traveler, why should Square Enix care if they predict the sales will be negligible?

The real imminent test is probably Persona. Xbox has made the same moves again, courting Sega and securing Game Pass debuts for ports of Persona 3, 4, and 5. This is a great move for Xbox as it gets a top-tier Japanese game in a series experiencing an explosive growth of popularity. It’s also huge for Sega and Atlus, as it can expose Persona to a new, untapped audience. But for Xbox, if Persona 6 is a PlayStation exclusive in the same way Final Fantasy 16 is, the platform-holder will just look like a wanker, having spent aggressively on late ports of entries 3-5.

Some of you will undoubtedly say that these are niche games with small sales, and even smaller on Xbox. And to some degree, you’d be right. I also might be a little biased; as well as VG247, I’m the co-owner of RPG Site, a website whose lifeblood is at least in part these sorts of games. But by the same token, each of these small misses is another little nick in Xbox’s proposition that its hardware and subscriptions serve all gamers. It also just makes Xbox look weak, being unable to secure ports of remasters of SNES games despite them being on hardware with breathtakingly similar architecture.

And also, not all of these games are small. None of them are CoD, sure. But Live A Live sold over half a million copies on Switch, and Octopath Traveler ultimately sold over 3 million. If Persona 6 proves to grow the series further, it’ll likely sell well over 6 million. These games have audiences – and would likely find audiences on Xbox if given the chance.

There was a time, a couple of generations ago, when it really looked like these games were in trouble, their relevance waning. But the tide has turned back now. They matter again, significantly. Their western audience has also grown immensely – so even Xbox’s lack of a foothold in Japan doesn’t explain away the lack of support. And even if it did, there’s only one answer to those market share issues in Japan; to have more titles Japanese games want to play, day-and-date with other platforms. xCloud’s potential in Japan feels enormous, with the country's mobile focus and brilliant data infrastructure – but it’ll only work with games that demographic actually wants to play on Xbox.

Or to put it another way, Sony might think losing Call of Duty carries the risk of being a mortal blow, but in certain market sectors, Xbox is in the midst of experiencing death by a thousand cuts.

What can Xbox do about it? Well, that’s a complicated question, and way above my pay grade. What I know is that it’s a problem, and it needs to be addressed.