Xbox off to sluggish start in Japan

Microsoft: Improvements expected


A sales assistant in Tokyo finds an eager buyer for an Xbox, but the price may prove tough for all but inveterate gamers

By Kristie Lu Stout
CNN Hong Kong

TOKYO, Japan (CNN) -- The Xbox is off to a slow start in Japan, with sales of just over 190,000 units since its February debut.

According to game magazine Enterbrain, Microsoft has sold just over 190,000 Xbox consoles in the two months since its launch.

In stark contrast, Sony sold almost one million PlayStation 2 units in just three days after its March 2000 launch in Japan.

Sinking confidence

The poor performance not only jeopardizes Microsoft's target, to ship up to 6 million Xbox units by June 30, but it could also mean a loss of critical support from Japanese game software developers.

RESOURCES

Play with 3-D models of the Xbox, GameCube and PlayStation 2

"For software makers, they want the numbers and sell-through when they are planning their projects that take one to two years," said WestLB's Tokyo-based game analyst Zachary Liggett.

"When they see that sales data look as poor as it does, it doesn't usher much confidence for them to make projects for Microsoft."

Microsoft has struggled to take on Japanese game giants Nintendo and Sony on their home turf.

A higher cost tough to bear

The Xbox retails in Japan at around 34,800 yen ($263), more expensive than the Sony PlayStation 2 and Nintendo GameCube -- a high price point that may be hard to justify for non-hardcore gamers.

The company has also been hit by high-profile complaints that the Xbox scratches game disks, prompting some stores to halt sales of the machine.

But analysts say a lack of compelling software titles is mostly to blame for Microsoft's weak game debut.

"Microsoft doesn't have the content to take advantage of their online capabilities," said Liggett. "Right now, it's zero. They don't have the service running yet."

The company admits that it's not meeting expectations in the key Japan market, but is confident that the performance of the Xbox will soon improve.

Gradual pick-up

"In terms of absolute volume of sales of the Xbox console in Japan, we were a bit lower than what we expected," said Microsoft's Hong Kong-based spokesman Olivier Richard.

"With commitments we have with Japanese game developers, we have the position to improve gradually, and get more and more sales of the Xbox in Japan," he added.

Earlier this week, Xbox director Robbie Bach tried to shift focus to strong game-software sales, as an indicator of the console's rising popularity.

Japanese customers bought an average of 1.6 games per Xbox, whereas PlayStation 2 users bought only 1.0 game per console after its launch, Bach said.

Analysts say when the next wave of game titles is released, the Xbox will finally enjoy the boost it needs to make it big in Japan.

"With the second generation of games, that's when it will pick up," said Liggett. "It did for Sony in November of last year."