Microsoft cuts Japan price for Xbox

Xbox 360 Elite

Microsoft Corp. said Wednesday it is cutting the price in Japan for its high-end Xbox 360 game console by 25 percent in a bid to lift demand ahead of the critical year-end shopping season.

The Xbox 360 Elite will now cost 29,800 yen ($320), down from 39,800 yen. The move was in line with Microsoft’s announcement last week that it was slashing the U.S. price for the Xbox 360 Elite by $100 to $299.

“With the price cut, we hope to boost demand for the Xbox game console. The Christmas and year-end shopping season is very important for us,” said Joji Sakaguchi, director of Xbox marketing in Japan.

Microsoft is locked in a three-way game console battle with Japanese rivals Nintendo Co. and Sony Corp. But sales of Microsoft’s Xbox game console are lagging far behind Nintendo’s hugely popular Wii home console and Sony’s PlayStation.

The Xbox’s market share only stands at 9 percent in the Japanese game market, worth 550 billion yen, compared with the Wii’s 65 percent. Sony’s PlayStation commands a 26 percent market share in Japan, according to data from Tokai Tokyo Securities Co. Ltd.

Microsoft’s price cut followed a similar move by Sony, which recently slashed the U.S. price for PlayStation 3 to $299.

Sakaguchi said he was confident going into the competition during the holiday season with both the Xbox 360 Elite and Sony’s PlayStation 3 now costing $299 in the United States.

“We are confident that we will do well during the upcoming holiday season. We cannot lose,” he said. During the busy Christmas season, game makers rake in most of their sales for the year.

Sony said last week a new PlayStation 3 will go on sale in Japan on Thursday priced at 29,980 yen.

Ken Kitabayashi, a consultant specializing in the game industry at leading think Nomura Research Institute Ltd., said the discounted prices by Microsoft and Sony would likely create new demand, helping spur the recession-hit industry.

“With Microsoft and Sony both selling their game consoles below 30,000 yen, it could attract people who have shunned pricey game consoles,” he said.

Microsoft has three versions of its Xbox 360 game consoles at three different prices. Apart from the high-end Xbox Elite, it has the mid-range Xbox 360 Pro, which costs 29,800 yen in Japan. The company also sells the Xbox 360 Arcade, the cheapest among the three, with the price tag of 19,800 yen. The Arcade does not have a hard drive.

Sakaguchi said the company is phasing out the mid-range Xbox 360 Pro.

“We will clear our stock. Once all our stock is gone, we won’t be making the Xbox 360 Pro,” he said.

Microsoft has sold more than 31.4 million of the Xbox 360 machines globally, compared with 23.7 million Sony’s PlayStation 3 machines and 52.6 million of Nintendo’s Wiis.

Since its launch in 2006, Nintendo’s Will hit 50 million unit sales worldwide in March 2009 at the fastest pace of any video game machine ever. The Wii is priced at $250 in the U.S., and 25,000 yen in Japan.

Nintendo said Wednesday it has no plan to cut the price of the Wii.

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