Xbox Launch

Back to Contents of Issue: April 2002

Are Japan's notoriously picky video game fans going to make Microsoft a player?

by Kurt Hanson


Xbox, Microsoft's bold bid to break into the video game market, has finally arrived in Japan, and none other then Bill Gates himself showed up in Tokyo to kick start the launch on February 22. He even mixed it up, politician style, with a crowd in Shibuya that had turned out for the debut and a chance to catch a glimpse of a billionaire. Microsoft sees gold in the home video game market and is dipping into its deep pockets to ensure success. One thing is for certain: Bill Gates plays to win.

With strong sales and acceptance growing in the US, the big question is whether Xbox can succeed in Japan -- Sony's home turf and a traditionally tough test for American consoles. At JPY34,800, Xbox is priced JPY5,000 higher then PS2, and it currently offers only 12 games, versus PS2's 300 plus (albeit, including previous-generation PS1 games). Microsoft promises that 22 Xbox titles will be released by the end of March, and nearly 100 titles are in the pipeline for release by the end of 2002.

If early indications are correct, Xbox just may give PS2 a run for the money. Over the debut weekend of February 23-24, Akihabara was abuzz. There was no doubt that Xbox had arrived as Microsoft plastered the area with green and black Xbox banners and posters. Throngs of eager gamers braved the cold and wind and lined up five deep in some places to check out the consoles on storefront pods. Our impromptu vox populi shone some light on the strengths and weaknesses facing Xbox in Japan.


Visuals seem to be Microsoft's saving grace. One novice female game player twiddling the controls on a storefront console summed up Xbox's graphics: "It's very good. It's fun. Fantastic! It's like watching a movie. And the girls in the games are very pretty and sexy. I think young men will like it."

An experienced gamer gave the thumbs up: "Resolution is much better then on PS2. I'm looking forward to more games." Another customer was more cautious: "I'm not going to buy one now, I'm waiting because of the price. I want the price to drop, and I would like to see more software. The graphics are much better than PS2 and the games are great. But I'm going to wait another year before buying."

One man came to Akihabara with his young daughter just to check out the new game. They have a PS2 at home but were still interested in Xbox. "It's cooler then PS2," the girl said, "The action and movement are much better." The dad chimed in, "We are thinking about buying, but there is not enough software. The price is a bit too high and it does not include a DVD player. PS2 has DVD. We are going to wait a year for the price to come down, but if there is more software coming out I may buy sooner."


At Sofmap's shop in Akihabara, the entire ground floor was dedicated to the Xbox -- a veritable shrine to the game. Sales were brisk, as customers waited in long lines to snap up games, consoles and peripherals. The manager claimed sales were, "pretty good. We sold 700 the first day and 350 on Saturday."

In fact, sales were better then expected with 122,900 game consoles sold in the three-day period. The initial surge was due in part to game fanatics buying the console with little regard for price or lack of games. They had to have it no matter what. The real test is whether Microsoft can sell to average consumers and crack a market where nearly 20 percent of Japanese households already own PS2.

Yukie Saito, research associate at Lehman Brothers, tracks the game market in Japan and says weekend sales were, "slightly better then expected." Sales were sporadic depending on location; Shibuya and Akihabara were good. However, she cautions, "It's too early to judge whether it was successful or not. Based on numbers, it's okay, but I believe PS2 will remain the giant." Sales could be slow she says, "because attractive games are very few." Saito predicts that by May or June total shipments will hit 300,000 in Japan.

It will be exciting to see how the battle between PS2 and Xbox unfolds. One thing is certain -- the winner will be the consumer, who will benefit from lower prices, better games and more choices. @

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