Xbox Weakness?

It looks like Xbox 360 sales may not be as robust as Microsoft had hoped. This has to be especially worrying in light of expectations that the sky-high price tag on the PS3 would drive more people to buy a cheaper and better-supported 360.

I would guess that the Wii is taking more of a toll than Microsoft expected. They just didn't see it coming: who would have thought that a $250, low-rez toy would trouce two powerful, hi-def machines? And it probably throws a wet towel over anticipation of some sort of "Wii60" phenomenon, where the Wii is so cheap that people can afford to buy both it and a 360.

It might also be the case that Microsoft has extra inventory now because they shipped a ton of extra boxes to meet their target of having "sold" 10 million units by the end of the year. "Sold" here meaning, shipped to retailers, not necessarily bought by an actual consumer.

What I find really interesting, and almost completely unnoticed so far, is the continued strength of the PS2. Sony is still moving gobs of those boxes. Even in Japan, the PS3 is only barely outselling the PS2.

San Jose Mercury News reporter Dean Takahashi wrote recently about "good enough", the idea that once a new technology reaches a certain level of sophistication, it become good enough for the majority of consumers, who don't see the need to spend more on marginally better technologies. He wrote that in the context of the Wii, but I wonder if it's just as applicable to the PS2.

I wonder if Microsoft regrets its decision to stop production of the original Xbox. Their reasoning was that they wanted to put all their marketing muscle and dollars behind the new product. But what if they had kept Xbox on the market for $120 or so? Maybe a lot of people who don't have the bucks to spring for a 360 would have opted to pick one up, which might increase their chances of buying a 360 in a couple years. It might also have provided a little cash flow to Microsoft's entertainment group, which is still losing money.

Hold On A Sec, Honey, I'm Almost Finished With This Level

I fired up the Xbox 360 tonight and saw to my surprise that I had a text message waiting for me from an old friend, SmallAngryMan. I hadn't heard from SAM in months, nor seen him on Xbox Live, so I wondered what was up. Here is the content of his message in full:

"[my wife] is giving birth imminently. probably explains why i'm on xbox. hope ur well".

How awesome is that? His wife is in labor and he signs on to get a little "Splinter Cell: Double Agent" action in before things get messy.

I have to say here that my own wife/gaming record is pretty good. Number One Son was born a week before the original Xbox went on sale, and I got my hands on an early release of the hardware two days after we got home from the hospital. I tell you, "Halo" and "NFL 2K2" were awesome late-night companions when I had to get up for late-night feedings or what have you.

The East Is Green. Xbox Green.

Sounds like Microsoft may be getting close to launching the Xbox 360 in China. There is a bit of discussion over at Joystiq about how significant the China market is.

The currently addressable Chinese console market is undoubtedly waaay smaller than 1.3 billion. You probably have 200-300 million reasonably well-off people in the cities. Narrow that down further by age, income and whatnot, and 40-50 million *potential* buyers sounds about right. Still, Microsoft found it worthwhile to launch in Hong Kong (7 million total population), Taiwan (30 million total population) and Singapore (5 million total population).

All consoles can currently be bought in China, but they are gray market imports, usually from Japan, and if you are a good bargainer, you will pay a premium of about $100 over the price in the original market. With the Xbox and PS2, many of these had been modded to be region-free and play pirated games, which you can buy for a couple bucks. There is no way to access Xbox Live from China at this point.

But I've always thought that Live could be a way for Microsoft to kill two birds with one stone. Chinese, like Koreans, love online play (they also are more favorable to shooters than the Japanese), and online verification could help thwart piracy. China has more than 100 million people online, second only in raw numbers behind the U.S. There is growing broadband penetration, but quality is spotty, especially when connecting to sites and services outside China.
The major obstacle has to be the game content passing muster from the authorities. You're never going to get Battlefied 2, which lets you play as Americans fighting Chinese, or Splinter Cell, where you have to infiltrate the Chinese embassy in Burma to get the dirt on corrupt PLA generals.

I wonder if, as part of the price of access, Microsoft will agree to support local developers. Maybe we'll see "Grand Theft Auto: Forbidden City", or an RTS where you lead the PLA in crushing democracy protests.

And Today's Console War Victor Is...

PS3 fanboy objective game industry observer Joe! Congratulations, Joe! Let's look at what made you the day's winner:

First check out these hardware sales for Japan. Let's see, the PlayStation 3 has sold more than 180,000 units while the Xbox 360 has sold just under 180,000 units. Sounds pretty close, huh? Well, not when you consider that the PS3 number is monthly sales while the 360 one is for the past year. Although both systems were outsold by Nintendo's Wii, it's clear the 360 is getting, like, totally pwned in Japan. (Anyone know how to say "pwned" in Japanese? David?)

Second, the "chief visual officer" at Electronic Arts said he reckoned they have only figured out how to use about 20 percent of the PS3's processing power. That would leave a lot of room for improvement. Which they desperately need, by the way.

So, okay, Joe, you win this round, but I ain't selling my 360 just yet.