Analysts Comment on Disappointing Xbox Launches in Europe, Japan
03-28-02, 08:47 PM
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Analysts Comment on Disappointing Xbox Launches in Europe, Japan
Analysts Comment on Disappointing Xbox Launches in Europe, Japan
By: Shane Bettenhausen March 28, 2002 1:58 PM PST
The Microsoft Xbox enjoyed brisk sales of 1.5 million units during the U.S. holiday shopping season, but industry analysts believe that the recent launches in Japan and Europe performed well under expectations.
During its first week of release in Japan, the Xbox moved only 123,000 of the 250,000 units shipped to retailers. Those sales figures were actually somewhat encouraging, considering the difficulty of convincing Japanese gamers to back a foreign console. However, by the third week of release, only 10,000 systems were being sold. This surprising slide in sales was likely affected by the bad press spawned from defective Japanese Xbox systems.
The recent March 14th European launch also failed to captivate consumers, so many retailers were forced to discount the price of the console by as much as 16%. Analysts predict that Microsoft may be forced to formally lower the MSRP of the Xbox in both Japan and Europe in order to stimulate sales. Experts believe that MS is already losing as much as $150 on every Xbox produced, so slashing the price further would only lead to a smaller profit margin on the console. Even Electronic Arts president John Riccitiello cites the overseas launches as dismal failures, stating: "Microsoft has had its teeth kicked in, in both Europe and Japan."
Of course, Microsoft maintains a rosy outlook, as John O'Rourke, Director of Marketing, claims: "We're off to a great start in every region...we went into this with eyes wide open, knowing we would have a successful launch, but it would be measured in different metrics.'' Even so, meeting the projected worldwide sales goal of at least 4.5 million by June may elude the industry giant.
Source: Bloomberg
By: Shane Bettenhausen March 28, 2002 1:58 PM PST
The Microsoft Xbox enjoyed brisk sales of 1.5 million units during the U.S. holiday shopping season, but industry analysts believe that the recent launches in Japan and Europe performed well under expectations.
During its first week of release in Japan, the Xbox moved only 123,000 of the 250,000 units shipped to retailers. Those sales figures were actually somewhat encouraging, considering the difficulty of convincing Japanese gamers to back a foreign console. However, by the third week of release, only 10,000 systems were being sold. This surprising slide in sales was likely affected by the bad press spawned from defective Japanese Xbox systems.
The recent March 14th European launch also failed to captivate consumers, so many retailers were forced to discount the price of the console by as much as 16%. Analysts predict that Microsoft may be forced to formally lower the MSRP of the Xbox in both Japan and Europe in order to stimulate sales. Experts believe that MS is already losing as much as $150 on every Xbox produced, so slashing the price further would only lead to a smaller profit margin on the console. Even Electronic Arts president John Riccitiello cites the overseas launches as dismal failures, stating: "Microsoft has had its teeth kicked in, in both Europe and Japan."
Of course, Microsoft maintains a rosy outlook, as John O'Rourke, Director of Marketing, claims: "We're off to a great start in every region...we went into this with eyes wide open, knowing we would have a successful launch, but it would be measured in different metrics.'' Even so, meeting the projected worldwide sales goal of at least 4.5 million by June may elude the industry giant.
Source: Bloomberg
03-28-02, 09:55 PM
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The poor launch in Japan I expected, I was unsure about europe. Even with poor launches, the xbox market in states could substain its life if MS can keep selling them here.
What xbox owners may have to except however is little support from Japan companies and less then full Euro support.
I think most "informed" xbox owners knew what they were purchasing. A US made machine with US support drived towards mostly "PC like" games. No doubt we hoped for full support, but I can hardly ever acted shocked in the future if it fails to materialize.
Things are still to early to see whats going to happen. If the GC launches really well in Europe, well then the xbox may be in some real trouble. Time will tell.
What xbox owners may have to except however is little support from Japan companies and less then full Euro support.
I think most "informed" xbox owners knew what they were purchasing. A US made machine with US support drived towards mostly "PC like" games. No doubt we hoped for full support, but I can hardly ever acted shocked in the future if it fails to materialize.
Things are still to early to see whats going to happen. If the GC launches really well in Europe, well then the xbox may be in some real trouble. Time will tell.
03-28-02, 10:10 PM
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Its going as expected. I think Microsoft knew they were in for a rough ride. They do need to pick up steam soon, but I'm not sure if their game line up will pull it off. Hopefully they will have some big announcements at E3.
