Microsoft Development Japan establishment and transition to Xbox 360 (2004–2009)
Aspiring to work with big Japanese creators and studios, Microsoft Game Studios Japan approached video game producers Akihiro Hino, Yukio Futatsugi, and Hironobu Sakaguchi to draw concepts for future Xbox games. Hino and MGSJ discussed concept ideas that resulted in the development of True Fantasy Live Online, an MMORPG developed in partnership with Level-5 and aiming to rival PlayStation 2's Final Fantasy XI. The game was officially announced at E3 2003, with an initial release date planned for late that year.[34] Futatsugi joined Microsoft shortly after left Japan Studio, and internally formed a team within MGSJ who contributed to the development of Magatama, before successfully pitching the idea for Phantom Dust, revealed at 2003's Tokyo Game Show.[35] After leaving Square in 2003, Sakaguchi and Microsoft discussed a number of ideas, which quickly became the first drafts of Lost Odyssey.[36] Following the success of Dead or Alive 3, which revitalized the series, Itagaki and Tecmo's Team Ninja decided to continue its strategic partnership with Microsoft Game Studios Japan, resulting in the reboot of the Ninja Gaiden series released in 2004, who achieved critical acclaim and spawned multiple sequels.[37] Dead or Alive Ultimate, a remastered compilation of Dead or Alive and Dead or Alive 2, was also released in 2004.[38]
MGSJ decided to postpone True Fantasy Live Online until late 2004 due to further restructuring within the division and recentralization of internal projects, including Level-5's inexperience with online network coding, ultimately leading to its cancellation in June 2004.[39][40] This also led to several delays in the development of Lost Odyssey, which went from being an internal project of Microsoft Game Studios Japan, with Sakaguchi leaving Xbox Japan to establish Mistwalker to continue development of the game, which had foundation funding and a minority stake from MGSJ.[41][42][43] During its transition, Artoon and Microsoft Japan released Blinx 2: Masters of Time and Space in November 2004, a sequel to the original game released in 2002, aiming to build a Japanese-mascot for the Xbox brand.[44][45]
In 2005, Microsoft Japan and its divisions searched publishers and studios to support its new console, the Xbox 360. At the time, MGSJ was already working in multiple projects, both internally and externally development support, including Every Party with Game Republic for the console launch in Japan, and Ninety-Nine Nights with Q Entertainment and Phantagram in the console's launch window.[46][47][48] MGSJ and Tecmo also released Dead or Alive 4 ahead of the launch of Xbox 360.[49][50]
In February 2005, Microsoft Game Studios Japan announced Sakaguchi was joining the company to work on multiple games for the new Xbox 360.[51] Around the same time in May 2005, Microsoft established Microsoft Development Japan in Chōfu, Tokyo, merging the Xbox's Japan division and the Microsoft Game Studios Japan unit in it, with Yukio Futatsugi being point as General Manager of Design and Head of the Games Unit of the new division, overseeing projects for the Xbox 360 and judging whether certain titles were suitable for release in Japan.[52] The Microsoft Development shortly grow, by expading to 342 employees in 2006.[53] During Xbox Summit in Japan, Microsoft revealed Blue Dragon, one of the two role-playing games in development by Mistwalker, a partnership between Microsoft Game Studios Japan with Sakaguchi, Akira Toriyama, and Nobuo Uematsu.[54] The game was directed by Takuya Matsumoto, who previsouly worked in Blinx 2 at MGSJ, and was released in December 2006 on Japan, and in August 2007 on other regions.[55] In February 2006, Maruyama ressigned as the Head of Xbox Japan at Microsoft Development to a estrategic position within Microsoft's
Famitsu announced Microsoft Game Studios Japan's new game, Infinite Undiscovery, in their weekly magazine in September 2006. Hajime Kojima and tri-Ace will provide development support, and the game stated to release in 2007.[58][59] At the TGS 2007, tri-Ace revealed Square Enix as the new publisher of the game because of their "know-how" with role-playing games, and Microsoft Japan would maintain its work on the project and serves as the copyright owners of the game.[60][61][62] Also at that year' TGS, Microsoft Japan unveiled Ninja Gaiden II for the Xbox 360, following the successful reboot and its re-release Ninja Gaiden Black in 2005. Microsoft will publish the game worldwide apart from Tecmo, and shares co-development and supervision with its Microsoft Game Studios Japan.[63]
After a number of delays, MGSJ and Mistwalker released Lost Odyssey in 2007. Alongside Microsoft Game Studios Japan, Feelplus was brought in to assist with the game's development, and the game transitioned from the original Xbox to Xbox 360, adopting the Unreal Engine 3. A number of MGSJ developers were recruited to Feelplus to work on the game, including most staff who worked on Phantom Dust, Ninja Gaiden, and Infinite Undiscovery.[71][72] Cry On, another Mistwalker role-playing game in development for the Xbox 360, was ultimately cancelled in December 2008.[73] The game draws inspirations from The Last Guardian, and after its announcement in 2005 alongside Blue Dragon and Lost Odyssey, it went silent until its cancellation by AQ Interactive after revaluing current market and Microsoft's Japanese divisions slowly less interest in the internal development of role-playing games.[74][75][76]
