NEWS - Friday, December 9, 2005

Xbox 360: Battleground Japan

Microsoft Corp. begins selling its new Xbox 360 video game console in Japan on Saturday, launching its attack on the industry's third-biggest market and the home turf of market leader Sony Corp. Xbox 360 will the first next-generation game machine to enter the market, putting the world's biggest software maker at an advantage versus competitors Sony and Nintendo Co. Ltd, which plan to launch their latest consoles next year. But some have tempered expectations for Microsoft's Japan launch even though the console quickly sold out in North America and Europe. It remains in short supply in those markets. "Pre-orders on the Internet look solid, but I don't think the retail stores will sell out of Xbox 360s in the first day," said Takeshi Tajima, an analyst at BNP Paribas in Tokyo. "Serious game fans will likely rush to buy them, but I think most people are going to wait and see," said Tajima, who added that "Dead or Alive 4," a 3-D fighting game that was supposed to be the hot new game for Xbox 360 in Japan, has been delayed until after the launch -- removing a key reason for fans to rush to buy the console. Japan is only getting the premium Xbox 360 package, which costs 37,900 yen and includes a removable hard drive that lets owners play games written for the first Xbox. The price on the console is cheaper than the comparable package in the United States, where it runs around $400. Pre-orders for the Xbox 360 had been better than expected at Bic Camera, one of Japan's largest electronics retailers. "I don't think there will be many units left after the first day," a Bic Camera spokesman said. PLAY AGAIN The Xbox 360 gives Microsoft a chance to learn from its mistakes in Japan, where according to some estimates the company sold fewer than 500,000 of its original Xbox consoles. Estimates put Sony's share of the Japanese console market at 80 percent, compared with less than 5 percent for Microsoft. The Xbox came to market almost two years after Sony's PlayStation 2 and about six months after Nintendo's GameCube, which are both home-grown systems with broad libraries of games. "The company has (made) an effort this time to woo well-known Japanese game makers, but it's unclear whether they will be hits," said Hirokazu Hamamura, president of Enterbrain, the publisher of Japanese game magazine Famitsu. He added that games are still geared more toward U.S. and European tastes. Japanese consumers were turned off by the bulky black appearance of the original Xbox. By contrast, Microsoft's new console is sleek and pearl white, similar in appearance to the PlayStation 3 due out next year. Microsoft also fumbled with customer relations in its first attempt, grappling with reports of complaints that a very small number of Xboxes put scratches on DVDs. Some U.S. owners have complained that the new Xbox overheats and freezes up. Microsoft, which said the issue affects a very small percentage of units, has been quick to respond, but a Chicago man has already sued in a proposed class action. "If it gets worse and Microsoft doesn't deal well with it, they have a problem," said Matt Rosoff, an analyst at the independent research firm Directions on Microsoft.


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