In a bid to rescue its flailing Xbox video game console, Microsoft is pushing the system's upcoming Xbox Live online gaming strategy this week in Japan, where the system has fared the worst because of competition from Nintendo and Sony. Japanese Xbox shipments are so low that even some Microsoft officials have commented that the system's best chance to survive will come in 2005, when the second generation Xbox will arrive. But because the Japanese market makes up such a disproportionate amount of the overall video game market, and is home to so many video game developers, the company is using this week's Tokyo Game Show to push Xbox there once again. And though Microsoft hopes that its unique approach to online gaming will win over converts, it has other tricks up its sleeve as well.
To date, the company has sold less than 275,000 Xbox consoles in Japan, compared to 10 million units sold for Sony's popular PlayStation 2. This sales discrepancy comes despite continually lowered Xbox prices and has caused many Japanese developers to focus solely on the PS2, even though the Xbox is doing well in the US. To help prevent a total collapse of its non-US developer base, Microsoft bought Nintendo's 49 percent share in Rare, the British video game maker that made Donkey Kong Country. Microsoft is also considering purchasing a Japanese video game maker, though Sony has countered its most obvious move by investing in Square, which makes the Final Fantasy games.
Microsoft also announced some new Xbox games this week, including Blinx, which features a green-eyed cat character that's vaguely reminiscent of leading characters on other systems, such as Sega's Sonic the Hedgehog and Nintendo's Mario. Blinx takes advantage of unique Xbox features, such as its advanced graphics and hard drive, making it impossible to port to other systems.
But Microsoft's online service, lower system prices, developer deals, and Xbox-only games can only prop up the system so much. For the Xbox to be successful, it needs to sell well in all three major gaming markets--the US, Japan, and Europe--and so far, it's only a runaway success in one of the three, the US. As Ives Guillemot, president of French game publisher Ubi Soft told the Wall Street Journal last week, if Microsoft can't improve its Xbox sales dramatically by the end of the year, most developers will simply reduce support for the Xbox and work on more lucrative PS2 titles. And a lack of third party support would be an insurmountable obstacle, even for a company as powerful as Microsoft.