MS winding up Xbox 360 operaations in India

[Zeus]

According to CNBC TV18 News, Microsoft is now winding up Xbox 360 operations in several cities in India. Sources say that the console has been withdrawn from several cities due to poor sales and that MS has withdrawn the marketing budget for the current fiscal year. Microsogt India won't share its sales numbers and a spokesman said "The Microsoft Entertainment Devices Division is very much on track with its targeted business plans."

[quote]
The console's last TV commercial, which featured Akshay Kumar and Yuvraj Singh was created in 2006, for the launch of the console business. The company has been facing dismal sales already due to sloppy customer support, high hardware failure, and pirated games. While Microsoft games cost upwards of Rs 2,500, it is easily available in the grey market for Rs 100.

Just a fortnight ago, Microsoft had decided to cut prices of its X-Box 360 Arcade System by 11-20% in four Asian markets- South Korea, Hong Kong, Taiwan, and Singapore. The company has not brought down the prices in India at all. Experts say this is mainly because Microsoft can't take any more losses on the console business in India.
[quote]

News Source: <a href="http://www.moneycontrol.com/india/news/business/x-box-flops-microsoft-windsopsseveral-cities/08/06/338381" target=_blank">moneycontrol.com</a>

[sigma8]

Ouch. I'd imagine the hardware failure is a particularly bad problem in India. If they were selling Wii's, it almost wouldn't matter that there was a huge grey market for pirated goods, because they'd still make a hefty profit on the Wii itself. They wouldn't need to spend tons on support or replacement costs, either.

With the 360, you have a console that is almost right at the break-even point (maybe still a small loss?), and then even if it might have yielded a tiny profit, you have to staff a large support operation to handle all the problems it has. All that "excellent support" you have here in the States is not free. And the hardware replacements, of course...if they honor the warranties there.. You have a big, money-losing hardware operation, and probably a loss on the software side too due to the rampant piracy.

But hey, many of guys are piratical. You probably think that is how it should be. Just pirate everything and sit back and enjoy as your console is withdrawn from the market because nobody is making any money. Excellent!

[cory149]

Wrapping up or winding down... not "winding up" - winding up is what you get when you don't pay attention to where you are going. :rolleyes:
Just pirate everything and sit back and enjoy as your console is withdrawn from the market because nobody is making any money. Excellent!
Over there "minimum" wage is a fraction of what it is in many countries while MSRP is double or treble what it is elsewhere. I've heard this used as an excuse so many times it's become not funny - and you'd likely agree if your wage was quartered and you had to buy your box from such a market. The distinction between "haves" and "have-nots" is far greater in some places, and such types of comments is exactly what I'd expect.

For them to blame their inflated local prices on piracy, and then later discontinue regional support because of piracy and perceived losses in that region just becomes a chicken-egg argument. Especially when you consider the issues with faulty hardware at such a high rate, as they seem to be (abandon the market and any existing legitimately purchased hardware to cut losses well before the 3 year rrod extension is over.)

[sigma8]

Over there "minimum" wage is a fraction of what it is in many countries while MSRP is double or treble what it is elsewhere. I've heard this used as an excuse so many times it's become not funny - and you'd likely agree if your wage was quartered and you had to buy your box from such a market. The distinction between "haves" and "have-nots" is far greater in some places, and such types of comments is exactly what I'd expect.

For them to blame their inflated local prices on piracy, and then later discontinue regional support because of piracy and perceived losses in that region just becomes a chicken-egg argument. Especially when you consider the issues with faulty hardware at such a high rate, as they seem to be (abandon the market and any existing legitimately purchased hardware to cut losses well before the 3 year rrod extension is over.)

Um.. So are you saying that piracy there is justified because of the low wages? If you can't afford an Xbox360, you don't buy it. From a company's perspective, software units are as separate and tangible from one another as hardware units. Each box of Halo3 is worth its MSRP, from their point of view. Each customer is paying for a discrete license to use it.

If they are entering a country like India, they're obviously targeting the wealthier 2% there, not rural areas, and not the less affluent people in the cities. If they were targeting them, they'd price it lower. However, they CAN'T price it lower, because they are a money losing operation.

In short, there's little practical difference between Indians not wanting to pay (pirating) or not being able to pay (poor), if Microsoft can't make profits, it can't stay.

Perhaps the Indian market is simply not wealthy enough to support any Xbox360 market at all? Yeah, right. The problem in India is even the wealthiest 2% are pirating left and right. 2% ... even 1% in a country of a billion people is a big enough market for MS to go after....if they'll buy it. If there was a huge grey market in the USA/Europe due to a large number of low-income people, very slack law enforcement on copyright, and anyone could just easily walk up to one of countless shops around town and pick up a game for $5 instead of $60, would you buy the $60 one? Even if you could afford it?

When "wealthy" western tourists travel to the third world, do you think they go into legitimate CD/movie/game places and pay full price? It's often easier to find illegal shops over there than legitimate ones.

I think it's great you think MS is "blaming" piracy.. This isn't like the MPAA, where they are making a killing every year for being able to operate a disc copier. Microsoft is legitimately (apparently) losing money in India. Losing money. Yes, you can blame the hardware and support. Of course, they lose money on that in the USA too! How do you think the division makes up the loss? Software profits.

MS can't just arbitrarily price things anywhere they want. Even if Indian labor is cheap, the Xbox360 still costs a couple hundred $ to construct. If they want to price it at $25 per console in order to sell it to 100,000,000 Indians at prices that they can realistically afford, they're going to pay a steep price for that.

[MadonnaProject]

of course theyre winding up operations in india. what did you expect? india has a market for modded consoles with pirated games. sheesh. you REALLY thought people were going to buy original games in india? its one of the poorest populations in the world in one of the richest developing economies.