NEWS - Friday, November 10, 2006

Microsoft Bets on Fast Xbox360 Growth In Brazil

Daniel Cervantes, director of Microsoft’s Latin America games and entertainment division, predicted that Brazil’s market could be Microsoft’s biggest in Latin America for the Xbox 360 in the next five years. Microsoft started selling the console in Mexico, Chile and Colombia earlier this year. Cervantes said 500,000 to 600,000 video game consoles are sold annually in Brazil, but they are brought there by third party vendors, not manufacturers. Analysts say there is a user base in Brazil for about 11 million game machines. "We’ll be the first major manufacturer to sell a game console in Brazil’s market directly. We believe consumers will respond well to that," said Cervantes, adding that Brazil ranked 15 in the world in console sales. The company will be selling the Xbox for 2,999 reais ($1,399) in stores and on Web sites, but product brought to Brazil unofficially by third parties can be found for between 1,600 reais and 1,900 reais. Cervantes said Microsoft considers its price "very competitive" in view of the package it will sell, which includes the console, a 20-gigabyte hard disk, wireless controller, remote control and three games. The Brazilian Xbox 360 will have software in Portuguese. Microsoft hopes to sell 10 million Xbox 360s globally in 2006, about 10 percent of which will come from Latin America, said Cervantes. He did not say how many sales were expected in Brazil. Microsoft will have 14 games for the Brazilian launch, among them the much anticipated "Gears of Wars," and "Perfect Dark Zero", at a cost of 159 reais each. Cervantes said Microsoft would spend twice as much on publicity in Brazil as it did for its Mexico launch, but he declined to give specific figures. He said the company wanted to start selling in Brazil as soon as possible because 40 percent of its consoles sales for the year were in December. Microsoft wants to take advantage of being the first to sell a new generation console in Brazil because starting this month it will face competition from Nintendo’s (7974.T: Quote, Profile, Research) console Wii and Sony’s (6758.T: Quote, Profile, Research) machine PlayStation 3. "We have learned in Mexico and Colombia that when we come ahead of our competitors, our market share can double just by being the first. If we get a critical mass, it’s very difficult for us lose our lead," said Cervantes.


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