MS reveal price for Xbox in Japan

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

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