Thanks Widhe Sam for the heads up.
Microsoft Corp. said on Friday it had set a Japan price for its Xbox video game console at $263, firing up competition in a market dominated by Sony Corp's PlayStation 2.
But retailing at a loftier price than its rivals, the Xbox may face a hard time breaking into the Japanese market after its February 22 launch, analysts said, adding that Microsoft will be forced to lose money on it to build up market share.
PlayStation 2 (PS2) costs $225 after a 15 percent price cut in late November, while Nintendo Co. Ltd.'s GameCube sells for $189 after debuting in Japan in September.
"We feel confident with the Japanese price of Xbox given its reasonable level and the machine's power," said Hirohisa Ohura, managing director at Microsoft Japan.
Xbox got off to a strong start in the United States at a price tag of $299, selling 1.5 million units between its November launch and the end of December. PlayStation 2 also sells for $299 in the U.S. market.
But some industry watchers say it may be difficult for Microsoft to repeat that success in Japan. "The price was within our expectations," said Teruaki Minami of NEC Interchannel Ltd., which builds games for personal computers and offer Internet services.
"But for ordinary consumers, it may not look that way if they compare with PlayStation or GameCube."
Ohura declined to provide Japan shipment targets or how many consoles would be available on its launch day. But he said he was confident supplies would be sufficient.
Industry analysts expect initial shipments to be around 300,000 units.
They estimated that it costs Microsoft as much as $375 per unit to make the Xbox, a loss the company hopes to recover over time with high-margin game software.
Morgan Stanley said Microsoft could lose $1 billion on the game machine by fiscal 2004 before breaking even.
News source: Reuters - Microsoft's Xbox Set for Japanese Debut
Microsoft Corp. said on Friday it had set a Japan price for its Xbox video game console at $263, firing up competition in a market dominated by Sony Corp's PlayStation 2.
But retailing at a loftier price than its rivals, the Xbox may face a hard time breaking into the Japanese market after its February 22 launch, analysts said, adding that Microsoft will be forced to lose money on it to build up market share.
PlayStation 2 (PS2) costs $225 after a 15 percent price cut in late November, while Nintendo Co. Ltd.'s GameCube sells for $189 after debuting in Japan in September.
"We feel confident with the Japanese price of Xbox given its reasonable level and the machine's power," said Hirohisa Ohura, managing director at Microsoft Japan.
Xbox got off to a strong start in the United States at a price tag of $299, selling 1.5 million units between its November launch and the end of December. PlayStation 2 also sells for $299 in the U.S. market.
But some industry watchers say it may be difficult for Microsoft to repeat that success in Japan. "The price was within our expectations," said Teruaki Minami of NEC Interchannel Ltd., which builds games for personal computers and offer Internet services.
"But for ordinary consumers, it may not look that way if they compare with PlayStation or GameCube."
Ohura declined to provide Japan shipment targets or how many consoles would be available on its launch day. But he said he was confident supplies would be sufficient.
Industry analysts expect initial shipments to be around 300,000 units.
They estimated that it costs Microsoft as much as $375 per unit to make the Xbox, a loss the company hopes to recover over time with high-margin game software.
Morgan Stanley said Microsoft could lose $1 billion on the game machine by fiscal 2004 before breaking even.
News source: Reuters - Microsoft's Xbox Set for Japanese Debut
Japan's Limited-Edition Console
Besides the price tag, industry experts here also voiced concerns about a lack of attractive software titles for Xbox.
"The Xbox is powerful game machine, but that alone does not attract game users. Rather, strong and exclusive software lineup will be a key for their success," said Keiji Honda, president of a Japanese game developer Enix Corp
Twelve games will be available at the launch, and 22 will be available by March 31, with the launch titles including Sega's "Jet Set Radio Future," a highly anticipated game that will come to the United States later this year.
Among the Japanese publishers supporting the launch with games are Sega, Konami Co. Ltd., Capcom Co. Ltd. and Tecmo Ltd. The game software would be priced between 6,800 and 9,800 yen.
Still, Tetsu Kayama, chief operating officer at Sega, has said the Xbox, which has a built-in hard drive and Internet connection with the most powerful console specification, may have an edge over PlayStation 2 whose users need to buy a hard disk and modem.
With $500 million global marketing blitz, Microsoft's potential should not be underestimated, analysts said.
Ohura said Microsoft considers Japan a key market and to boost the presence of Xbox, the company will offer special Xbox units with a translucent case, a silver-colored logo, high-definition TV and Dolby stereo expansion packs, and an engraved keychain with serial number.
Microsoft will sell 50,000 special Xboxes at a price of 39,800 yen each.
Japanese customers will be able to order an Xbox from February 2 online and through retailers.
($1=132.21 yen)
Commenting has either been disabled on this article or you are not logged in. Click here to login or register, its free!
Note: Anonymous commenting is disabled in order to keep the quality of responses to a high standard.