Xbox 360 Fails to Impress in Japan, Faces Significant Hurdles

Strategic Insights -

Microsoft's next-generation game console, the Xbox 360, has had a disappointing opening in Japan, the world's second-largest video game market. Despite its popularity in the United States, the Xbox 360 sold only 62,135 units in its first weekend, with many consumers preferring to wait for the release of Sony's PlayStation 3, which is expected to be a more appealing option.

Key Takeaways:

  • The Xbox 360 had a disappointing opening day in Japan, selling only 62,135 units out of approximately 159,000 machines shipped.
  • Microsoft's biggest hurdle in Japan is the dominance of Sony, which holds 81% of the Japanese market, followed by Nintendo with most of the remaining share.
  • The Xbox 360 has sold only 470,000 units in Japan as of June, compared to 13 million units sold in the United States, giving it a mere 2% share of the Japanese market.
  • Microsoft rolled out the Xbox 360 ahead of its Japanese rivals, but analysts say this strategy has not helped, citing the lack of game software to play on the console as a major factor.
  • The PlayStation 3 is expected to begin selling in the spring, and analysts predict that it will be a major factor in Xbox 360's sales struggle in Japan.
  • Many consumers are waiting to upgrade their PlayStation 2 game libraries, which makes it more practical to switch to the PlayStation 3, rather than switching to the Xbox 360.
  • Asako Miyata, a Microsoft spokesperson, claims that sales are "steadily picking up" as more games become available, but analysts remain skeptical.

Statistics:

  • Xbox 360 sales in Japan: 62,135 units in the first weekend, 470,000 units as of June.
  • Xbox market share in Japan: 2% - 25% in the United States.
  • Xbox 360 sales vs. PlayStation 2 sales: 470,000 - 22 million.
  • PlayStation market share: 68% worldwide, 81% in Japan.
  • Xbox market share: 17% worldwide.
  • PlayStation 3 release date: Spring, 2006.
  • Nintendo Revolution release date: 2006.

Sources:

  • Enterbrain, Japanese market research company
  • Famitsu.com, market research site
  • Standard & Poor's, electronics industry analyst
  • Famitsu, market research site
  • Martin Fackler, The New York Times