Xbox price war rages in Germany
04-06-02, 05:16 PM
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Xbox price war rages in Germany
Thought this was an interesting article that I saw on Gamespot's website.
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After the launch of the system, retailers in Germany continue to lower the price of the Xbox.
When the Xbox launched in Europe on March 14, a major price war was initiated by German retail chain Media Markt, which sold the Xbox for 399 euros ($350) instead of 479 euros ($420). Other chains have followed suit. Media Markt has also started another price war--for example, one of its stores in Regensburg is offering the Xbox for 149 euros ($130). According to industry publication MCV, this bundle consists of an Xbox and two Siemens C45 cell phones, but those who purchase the bundle must sign a contract with a cell phone service provider. This strategy is not uncommon, since mobile phone network providers have been looking for ways to increase their market presence through deals like these for the past few years.
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___________________________________________________
After the launch of the system, retailers in Germany continue to lower the price of the Xbox.
When the Xbox launched in Europe on March 14, a major price war was initiated by German retail chain Media Markt, which sold the Xbox for 399 euros ($350) instead of 479 euros ($420). Other chains have followed suit. Media Markt has also started another price war--for example, one of its stores in Regensburg is offering the Xbox for 149 euros ($130). According to industry publication MCV, this bundle consists of an Xbox and two Siemens C45 cell phones, but those who purchase the bundle must sign a contract with a cell phone service provider. This strategy is not uncommon, since mobile phone network providers have been looking for ways to increase their market presence through deals like these for the past few years.
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04-08-02, 01:22 AM
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It's becoming pretty apparent that the XBox's high price is a huge deterrant to it's success overseas. Sales of the console in Japan have just about grinded to a halt. Here's a Bloomberg article speculating on the necessity for an immediate XBox price cut in Japan:
http://www.bloomberg.com/fgcgi.cgi?T...wWjRRzTWljcm9z
"In the week ended Sunday, it sold a little more than 4,300 Xboxes in Japan, while Sony's PlayStation 2 sales topped 100,000 and Nintendo's GameCube sales reached almost 25,000, Media Create said"
I'm going to quote the whole article at the bottom of the post since I'm not sure how long Bloomberg keeps links to their articles active.
European sales have been lukewarm at best. They've been respectable in England, but in Germany and France, it's been pretty disappointing. All last week, analysts were busy cutting their estimates for MS revenue this quarter to accomodate the slower sales of the XBox. Ironically, earnings isn't expected to be hurt since the consoles are sold at a loss anyway.
It's only been the continued strong support, from customers and developers alike, here in the US that keeps the XBox from being doomed to irrelevance. Even so, despite their public assertions to the contrary, there's little chance that MS will hit even the low end of their goal of 4.5 to 6 million units sold worldwide.
It'll be interesting to see if Nintendo is much more successful with their European launch with their lower price point. Does anyone know if Nintendo has announced an official MSRP for the GC launch in Europe?
http://www.bloomberg.com/fgcgi.cgi?T...wWjRRzTWljcm9z
"In the week ended Sunday, it sold a little more than 4,300 Xboxes in Japan, while Sony's PlayStation 2 sales topped 100,000 and Nintendo's GameCube sales reached almost 25,000, Media Create said"
I'm going to quote the whole article at the bottom of the post since I'm not sure how long Bloomberg keeps links to their articles active.
European sales have been lukewarm at best. They've been respectable in England, but in Germany and France, it's been pretty disappointing. All last week, analysts were busy cutting their estimates for MS revenue this quarter to accomodate the slower sales of the XBox. Ironically, earnings isn't expected to be hurt since the consoles are sold at a loss anyway.
It's only been the continued strong support, from customers and developers alike, here in the US that keeps the XBox from being doomed to irrelevance. Even so, despite their public assertions to the contrary, there's little chance that MS will hit even the low end of their goal of 4.5 to 6 million units sold worldwide.
It'll be interesting to see if Nintendo is much more successful with their European launch with their lower price point. Does anyone know if Nintendo has announced an official MSRP for the GC launch in Europe?
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Microsoft Must Cut Japan Xbox Price to Help Sales (Update2)
By Hiroshi Suzuki
Tokyo, April 4 (Bloomberg) -- Microsoft Corp.'s bid to unseat Sony Corp. as Japan's No. 1 video-game console maker is failing, forcing the company to consider cutting the price of its Xbox machine just six weeks after its debut, investors said.
Since the Xbox's release on Feb. 22, Microsoft has sold about 165,000 units, falling one third short of its goal to sell out of its 250,000 initial shipment by now, Media Create Co., a Japanese research company, said. The sales figures are based on a nationwide survey of retailers and video-rental stores.
Microsoft's attempt to topple Sony in Japan was hampered after the company was forced to repair or replace defective versions of the Xbox when customers complained the machine damaged some game disks. Xbox is part of Microsoft's attempt to extend its dominance of computer operating systems to the livingroom where consumer-electronics makers like Sony hold sway.
``Investors already think Xbox is irrelevant in the Japanese market,'' said Makoto Suzuki, who helps manage $1.1 billion in Japanese equities at Chuo Mitsui Asset Management Co. ``Sony is now the maker of choice among owners of home-use game consoles.''
Microsoft continues to lose ground. In the week ended Sunday, it sold a little more than 4,300 Xboxes in Japan, while Sony's PlayStation 2 sales topped 100,000 and Nintendo's GameCube sales reached almost 25,000, Media Create said.
Tough Sell
Analysts and investors say Microsoft faces a tough sell in Japan, where the company counted on a successful debut to prove itself among game fans and win the support of game developers.
They add that a price cut is no assurance of higher sales. The Xbox sells for 5,000 yen more than Sony's PlayStation 2 console and 10,000 yen more than Nintendo's GameCube.
Hirohisa Ohura, managing director of Microsoft's Japan unit, Microsoft Co., said last month that the pace of Xbox sales in Japan is slower than they expected.
Lagging weekly sales of the 34,800 yen ($260) machine may pressure Microsoft to shore up sales by slashing prices or bundling the game console with software to attract buyers, investors said.
``It's a certainty that the Xbox isn't a threat anymore to Sony's PlayStation 2,'' said Toshiyuki Fukushima, who helps manage 250 billion yen in Japanese equities at Sumisei Global Investment Trust Management Co. ``I'm interested in how this will affect the parts suppliers for the Xbox.''
Stakes
Japan, which accounts for about a quarter of all video-game sales, is crucial for Microsoft. The country is home to some of the industry's best-known game designers such as Nintendo's Shigeru Miyamoto and Konami Computer Entertainment Japan Inc.'s Hideo Kojima, designer of the ``Metal Gear Solid'' series of espionage games.
Adding further complications for Microsoft, the company today said President and Chief Operating Officer Rick Belluzzo, who took a major role in initiating the company's Xbox business, will leave by September.
The departure of Belluzzo, who was responsible for the company's television platform and home-entertainment business, may underscore other problems for Microsoft, analysts said.
Last month, the company scrapped a joint venture in Japan with Fujitsu Ltd. offering Internet-access services through television sets because of a low number of users.
Redmond, Washington-based Microsoft has no choice but to cut the retail price of the Xbox in Japan, said Takashi Oya, an analyst with Deutsche Securities Ltd. Oya said the company may need to reduce the price by as much as 10,000 yen as early as next month, following up with price cuts in the U.S. and the U.K.
Pre-emptive Cut
The Xbox and Sony's PlayStation 2 both sell for $299 in the U.S. In December, Sony cut the PlayStation 2's price by 15 percent in Japan as a pre-emptive move to thwart Microsoft.
Cutting the PlayStation 2 price is always an option depending on market demand, though the No. 2 consumer-electronics maker typically doesn't comment on the timing of any reductions, Sony Computer Entertainment Inc. spokesman Kenichi Fukunaga said.
Microsoft risks losing potential game users and damaging its relationship with existing game software suppliers if it doesn't cut the Xbox's price, Deutsche Securities' Oya said. At present, 11 Japanese gamemakers, excluding Microsoft's Japan unit, supply 18 Xbox game titles.
``There's no point in discussing the issue,'' Oya said. ``Microsoft should not be thinking about saving face, they should be thinking about how to minimize the damage.''
Microsoft's shares rose as high as $57 in after-hours trading. The stock fell 97 cents to $56.33 before Belluzzo's departure was announced, and has declined 15 percent this year.
Microsoft Must Cut Japan Xbox Price to Help Sales (Update2)
By Hiroshi Suzuki
Tokyo, April 4 (Bloomberg) -- Microsoft Corp.'s bid to unseat Sony Corp. as Japan's No. 1 video-game console maker is failing, forcing the company to consider cutting the price of its Xbox machine just six weeks after its debut, investors said.
Since the Xbox's release on Feb. 22, Microsoft has sold about 165,000 units, falling one third short of its goal to sell out of its 250,000 initial shipment by now, Media Create Co., a Japanese research company, said. The sales figures are based on a nationwide survey of retailers and video-rental stores.
Microsoft's attempt to topple Sony in Japan was hampered after the company was forced to repair or replace defective versions of the Xbox when customers complained the machine damaged some game disks. Xbox is part of Microsoft's attempt to extend its dominance of computer operating systems to the livingroom where consumer-electronics makers like Sony hold sway.
``Investors already think Xbox is irrelevant in the Japanese market,'' said Makoto Suzuki, who helps manage $1.1 billion in Japanese equities at Chuo Mitsui Asset Management Co. ``Sony is now the maker of choice among owners of home-use game consoles.''
Microsoft continues to lose ground. In the week ended Sunday, it sold a little more than 4,300 Xboxes in Japan, while Sony's PlayStation 2 sales topped 100,000 and Nintendo's GameCube sales reached almost 25,000, Media Create said.
Tough Sell
Analysts and investors say Microsoft faces a tough sell in Japan, where the company counted on a successful debut to prove itself among game fans and win the support of game developers.
They add that a price cut is no assurance of higher sales. The Xbox sells for 5,000 yen more than Sony's PlayStation 2 console and 10,000 yen more than Nintendo's GameCube.
Hirohisa Ohura, managing director of Microsoft's Japan unit, Microsoft Co., said last month that the pace of Xbox sales in Japan is slower than they expected.
Lagging weekly sales of the 34,800 yen ($260) machine may pressure Microsoft to shore up sales by slashing prices or bundling the game console with software to attract buyers, investors said.
``It's a certainty that the Xbox isn't a threat anymore to Sony's PlayStation 2,'' said Toshiyuki Fukushima, who helps manage 250 billion yen in Japanese equities at Sumisei Global Investment Trust Management Co. ``I'm interested in how this will affect the parts suppliers for the Xbox.''
Stakes
Japan, which accounts for about a quarter of all video-game sales, is crucial for Microsoft. The country is home to some of the industry's best-known game designers such as Nintendo's Shigeru Miyamoto and Konami Computer Entertainment Japan Inc.'s Hideo Kojima, designer of the ``Metal Gear Solid'' series of espionage games.
Adding further complications for Microsoft, the company today said President and Chief Operating Officer Rick Belluzzo, who took a major role in initiating the company's Xbox business, will leave by September.
The departure of Belluzzo, who was responsible for the company's television platform and home-entertainment business, may underscore other problems for Microsoft, analysts said.
Last month, the company scrapped a joint venture in Japan with Fujitsu Ltd. offering Internet-access services through television sets because of a low number of users.
Redmond, Washington-based Microsoft has no choice but to cut the retail price of the Xbox in Japan, said Takashi Oya, an analyst with Deutsche Securities Ltd. Oya said the company may need to reduce the price by as much as 10,000 yen as early as next month, following up with price cuts in the U.S. and the U.K.
Pre-emptive Cut
The Xbox and Sony's PlayStation 2 both sell for $299 in the U.S. In December, Sony cut the PlayStation 2's price by 15 percent in Japan as a pre-emptive move to thwart Microsoft.
Cutting the PlayStation 2 price is always an option depending on market demand, though the No. 2 consumer-electronics maker typically doesn't comment on the timing of any reductions, Sony Computer Entertainment Inc. spokesman Kenichi Fukunaga said.
Microsoft risks losing potential game users and damaging its relationship with existing game software suppliers if it doesn't cut the Xbox's price, Deutsche Securities' Oya said. At present, 11 Japanese gamemakers, excluding Microsoft's Japan unit, supply 18 Xbox game titles.
``There's no point in discussing the issue,'' Oya said. ``Microsoft should not be thinking about saving face, they should be thinking about how to minimize the damage.''
Microsoft's shares rose as high as $57 in after-hours trading. The stock fell 97 cents to $56.33 before Belluzzo's departure was announced, and has declined 15 percent this year.
04-08-02, 09:03 AM
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I still think software and not console price are the biggest problems facing the Xbox overseas. They really need to get some better titles out. Jet Grind Radio Future and Gunvalkrye both were rather disapointing IMO and they are not titles that people will buy a console to play. Sega has not come through for the Xbox to this point.
04-08-02, 11:47 AM
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Originally posted by darkside
I still think software and not console price are the biggest problems facing the Xbox overseas. They really need to get some better titles out. Jet Grind Radio Future and Gunvalkrye both were rather disapointing IMO and they are not titles that people will buy a console to play. Sega has not come through for the Xbox to this point.
I still think software and not console price are the biggest problems facing the Xbox overseas. They really need to get some better titles out. Jet Grind Radio Future and Gunvalkrye both were rather disapointing IMO and they are not titles that people will buy a console to play. Sega has not come through for the Xbox to this point.
If there was a secret game, Microsoft almost certainly would have announced it to boost sales, rather than holding it until E3 or whatever. They're in dire straits, and they need all the help they can get.
At this point, Microsoft is stuck with a chicken-or-the-egg conundrum. They need the games to sell the systems, but the game companies need the user base to sell the games.
For the third parties, the answer is simple. They'll just develop for PS2.
Microsoft now has limited options. They can slash system prices, selling XBoxes at deeper losses, in order to spur sales and get more titles, or they can buy up more game companies, to get exclusive games. Both options are risky, and both jeopardize Microsoft's plans for long-term profitability on the XBox.
As for new software, if it's not at a point where it can be shown yet, it may not be coming soon enough to matter. It takes a certain kind of game to get most people to move to a new generation of consoles. The Playstation 2 had that this year, with MGS2, FFX and especially GTA3.
The XBox is now in a position where it must convince people not merely to buy a console, but to buy a second console. The "hardcore" gamers can be swayed to do this, but in the real world, the XBox is a redundant product in a Playstation world.
I hope for the sake of XBox purchasers that the system maintains a flow of decent titles long enough to make your consoles worthwhile, but I'm not at all displeased that Bill Gates is getting his ass handed to him for a change.
04-08-02, 04:03 PM
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I wish they'd sell the consoles here at the buyer's price 
. Just curious, anyone know how much stores like Best Buy buy these next gen systems for? I remember someone awhile ago saying that the buying price for a PS2 is 279 or so, what about the others?
Those phone contract bundle plans sound really evil.
. Just curious, anyone know how much stores like Best Buy buy these next gen systems for? I remember someone awhile ago saying that the buying price for a PS2 is 279 or so, what about the others?Those phone contract bundle plans sound really evil.
04-08-02, 04:15 PM
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Originally posted by Outlaw
I wish they'd sell the consoles here at the buyer's price. Just curious, anyone know how much stores like Best Buy buy these next gen systems for? I remember someone awhile ago saying that the buying price for a PS2 is 279 or so, what about the others?
Those phone contract bundle plans sound really evil.
I wish they'd sell the consoles here at the buyer's price
. Just curious, anyone know how much stores like Best Buy buy these next gen systems for? I remember someone awhile ago saying that the buying price for a PS2 is 279 or so, what about the others?Those phone contract bundle plans sound really evil.
