"Gaming has been a disastrous endeavour for Microsoft. Apparently...

[Timboo]

So says Wall Streeter Roger Ehrenberg. He says that the Xbox has failed investors by hemorrhaging Microsoft's Home & Electronics profits. He believes that when a console fails in Japan, as the 360 has arguably done, it cannot succeed in the world market.

"Microsoft needs to take a long, hard look at its gaming strategy - and, in fact, its entire H&E strategy. At what point, regardless of its virtually endless financial resources, does it say 'enough is enough.'"

It goes onto say:

Is it possible that Microsoft could say "enough is enough" someday, effectively throwing in the console towel? I don't see it happening, but I suppose if shareholders grow tired of accrued losses, anything's possible.

<a href="http://www.infendo.com/2007/04/analyst-gaming-has-been-disastrous.html" target="_blank">infendo.com</a>

[loliix]

I will let you with a quote: "If the world was about explode, the last voice ever heard echoing in the emptiness of space would be the one of an expert saying it can't be done."

If anyone would be kind enough to tell me the author of the quote I would appreciate it (I just can't remember :( )

[lobo32332]

eh, from my reading MS was expecting a HUGE "buy-in" to the console world. They were prepared to lose money with the first x-box, and (I think) they are hoping to break even with the 360. They're spending gobs of cash and two consoles thus far just garnering respect and feasibility in the gaming world. And while they may never conquer Japan (just because its a small island chain doesn't mean they don't spend a lot...they ARE an important market), they are enjoying the current first place in America and (maybe) Europe. Even if the Wii's sales keep on track and catch up with the 360 come X-Mas, their installed base is still hefty enough to call their "buy-in" a success.

[Razgrith]

Apparently, this wall street guy must have been high on crack on when made his comments. He based it on one puny country. The japanese market is way overrated. Why try stealing a small slice of pie when you can channel the same effort in grabbing another whole box?

[sigma8]

This was an interesting article, from a point of view often neglected in the gaming community: that of the investor. Everyone around here, including me, often assumes that MS is deeply committed to this, and that they will do it until it's profitable...but the guy is right that investors won't tolerate losses forever. With no guarantees of a future monopoly in this area, they're unlikely to allow their portfolios to be weighed down by these losses for very long.

Apparently, this wall street guy must have been high on crack on when made his comments. He based it on one puny country. The japanese market is way overrated. Why try stealing a small slice of pie when you can channel the same effort in grabbing another whole box?
Japan is the second largest economy for this sort of thing in the world. Look at the vgcharts.org numbers, Japan is about as big as "Others" which includes all of western Europe.

I will let you with a quote: "If the world was about explode, the last voice ever heard echoing in the emptiness of space would be the one of an expert saying it can't be done."

I love how people constantly try to imply that since it's possible that an expert could be wrong, that the poster's opinion has an equal (or greater) probability of being correct. That's like saying that it's possible an airline pilot may crash a plane, therefore I might as well fly it.

[AgentSyntax]

Apparently, this wall street guy must have been high on crack on when made his comments. He based it on one puny country. The japanese market is way overrated. Why try stealing a small slice of pie when you can channel the same effort in grabbing another whole box?

Its not only the market, though clearly it is an important one, its also about the developers there. They make important games that are less likely to be made for the 360 if there isnt a presence in Japan

[sigma8]

He based it on one puny country. The japanese market is way overrated...
Maybe you should read the wikipedia article on Japan. Here's a teaser:
A great power, Japan is the world's second largest economy by nominal GDP and is a member of the United Nations, G8 and APEC.

Here's a direct link to the economy (http://en.wikipedia.org/wiki/Japan#Economy) section..

[SSChevy2001]

Who cares about the Japan market. We all know it's a big market, but it's also a very biased market. It's not like the 360 will ever do well there. That doesn't mean the 360 is a failure. It just proves the hate that Japan has for american products.

[WickedSkin]

Who cares about the Japan market. We all know it's a big market, but it's also a very biased market. It's not like the 360 will ever do well there. That doesn't mean the 360 is a failure. It just proves the hate that Japan has for american products.

The western market is also pretty biased. And some U.S products do really well in Japan, like the Ipod. I think marketing is the problem. The Japanese market are different from the western market (U.S and EU). F***ing McDonalds does well in Japan. Microsoft just did something wrong and the X360 doesn't apeal to them.

[sigma8]

Who cares about the Japan market. We all know it's a big market, but it's also a very biased market. It's not like the 360 will ever do well there. That doesn't mean the 360 is a failure. It just proves the hate that Japan has for american products.
Japan actually loves western products, or at least, they love japan-ified versions of Western products. They've practically adopted their own form of English. Half of the ads are in really bad English, because they like it so much.

[SSChevy2001]

So sigma8 and WickedSkin you care to explain why 360 sales in Japan are so poor after 1.5 years. The 360 is doing worst than the PS3 and it's not like PS3 has many different games. No Japan is just biased.

[msanchez]

So sigma8 and WickedSkin you care to explain why 360 sales in Japan are so poor after 1.5 years. The 360 is doing worst than the PS3 and it's not like PS3 has many different games. No Japan is just biased.


Ok I can take a wild guess. I'll give you a little example, what are the chances of me selling you a dating sim game (supposing you don't like 'em)? To do good you don't sell what you want to sell, you sell what others want to buy. Notice how the 360 sales spiked when they released Blue Dragon, why? because that's what Japanese gamers want.

I think it's really close minded for people to call the japanese biased because they don't jump all over the 360, when there's so many other american products that do well.

As far as the 360 being disastrous, I won't go that far. Billy boy isn't dumb, I don't particularly like the guy, but MS knows how to manage money. It's gaining support in japan, and I'm sure a few more good japanese friendly games will solidify it's place in japan, and come the next gen they will be in an even better position. At least that's what I think is probable to happen.

[sigma8]

So sigma8 and WickedSkin you care to explain why 360 sales in Japan are so poor after 1.5 years. The 360 is doing worst than the PS3 and it's not like PS3 has many different games. No Japan is just biased.
Well, here are reasons cited for the original Xbox:
- too few japanese-developed titles (especially RPGs)
- nobody cared about FPS games in Japan (especially then; Halo = non-factor)
- too big (Japanese apartments are small, space is a premium)
- no rhythm games (the rhythm game craze is dying down in Japan now, whereas here it's finally catching on)

For the Xbox 360:
- the reputation of the previous Xbox
- too few japanese-developed titles
- from what I've heard, Japanese aren't as interested in online play (on average)

By "japanese-developed titles" I don't mean titles made by Japanese people, I mean titles IN JAPANESE. And not the Japanese equivalent of "Hi! You survive make your time now! Launch!", but proper Japanese localization.

If you go into a videogame store in Japan, you'll recognize like 50% of the games on the shelf. The other 50% will be things you've never heard of. A Japanese person might notice the same thing in America, failing to recognize a chunk of games. Games are developed with market tastes in mind, and America, Europe, and Japan each have their own sensibilities. US and Europe are more similar to one another than Japan, but what do you expect? Despite its diversity, America's consumer economy is essentially a colony of white Europeans.

You think the DS is doing well here? You should see it in Japan. You can buy travel guides, language dictionaries, school-prep software, digital cookbooks, RPG's you've never heard of.. You can buy Brain Age 2... As well as the DS is doing here, and as well-supplied with games that it seems to be...it's REALLY got a lot in Japan.

Microsoft has failed to deliver a robust software library to Japan (Microsoft's foreign market) that is comparable to the DS's library here in the US (Nintendo's foreign market). Likewise, Sony puts a much better effort into its American product than MS puts into its Japanese one.

Why is the PS3 doing well? Well, actually, for a sequel to the PS2, it could certainly be doing better in Japan. It's not entirely rosy. I think a lot of people are adopting a wait-for-a-while attitude towards it, but there is the expectation that it will be delivering games that they want eventually. Obviously, they are more optimistic about the PS3 than the Xbox360.. I think that's based on the two companies' track records in the region.

Also, like it or not, a lot of videogame trends come from Japan (e.g. DanceDance) and Microsoft is simply never a creator of japanese trends. Thus, they'll always be beaten to the market with the trendy new games. They're constantly in a state of "catch-up" in Japan. MS is constantly courting Japanese developers, but it appears to be an arduous process. They're getting there.

More speculatively....
I think that Japanese people are (on the whole) more fashion-conscious than people in America.. Ironically, mimicking a lot of western fashion that we take for granted and ignore. Xbox1 was not only big, but ugly. Xbox360 is a HUGE improvement, but still pretty bland. And it's noisy. Not a welcome addition to a small room in an apartment, where it will both break the feng shui, and also make a lot of noise.

Another irony, is that part of MS's failure in Japan may be coinciding with a growing disinterest in video games. Sales have been dropping for the last couple years. The Wii and DS may be turning that around. That Nintendo sought to address waning videogame interest... I think that's directly related to them being in Japan. If they had been in America, they probably wouldn't have felt a need to re-appeal to former gamers and casual gamers, as they'd have been in a growing market. IMO, the entire philosophy of the Wii originated from the problems they perceived within the Japanese videogame industry. That it has done so well worldwide, is just a huge bonus for them.

Remember that console gaming as we know it originated in Japan. Yes the Atari 2600 was first, but it was primarily weak, simplistic ripoffs of really basic arcade games. The NES was the first console that did things like tell stories, or let you save games. It changed the whole field. Japan became a huge source of ideas for videogames. Most of our console games for the last 20 years have been Japanese ports. It's only with the merging of PC games (a more western concept) and consoles, that America is gaining some cred as an innovator in console games.

[Scorpion3]

The western market is also pretty biased. And some U.S products do really well in Japan, like the Ipod. I think marketing is the problem. The Japanese market are different from the western market (U.S and EU). F***ing McDonalds does well in Japan. Microsoft just did something wrong and the X360 doesn't apeal to them.

Uh...McDonald's isn't an American company? It may have been in the 60's when it was created in America, the company has been based in Europe for the past 20 years. As for the iPod, alright, that works. But again we're talking about game consoles, the population can easily adapt to things that are Global like McDonald's, Coke, etc but anyone could tell you it's not the same with Electronics. RCA doesn't even sell over there anymore if I remember correctly, Sony is an Electronic God because of biased consumers. The same with game consoles, Nintendo, Sony, and whatever Japanese game companies come out will always do better then American systems. It's not because it's westernized, it's because they are just the kind of people who stick with their things. But I suppose it's to be expected, the US is pretty diverse when it comes to just about everything on a global scale so foreign products can do very well here even if they're not the best products.

As for the 360 bombing in Japan, that's a misconception. It's already sold more then the original Xbox along with more copies of games then the original Xbox in it's lifespan. On the other hand, the PS3 isn't selling well and Sony, as I mentioned before, is an electronic God in Japan. So comparing the 2, you have the Xbox franchise which no one really expects much of in Japan selling an alright amount (Obviously not great but better then expected) and Sony which is selling way under what was expected, for the PSP as well as the PS3, from everyone in the gaming world. So in retrospective, Sony is the one failing in Japan.

EDIT: You're right Sigma, the Xbox was big and ugly and had a lot of western style games. So why is the PS3 selling then? It's big, and ugly and is stabled on western games at the moment, yet it's still selling better then the 360 which is smaller, sleaker, and has a lot of Japanese style games?

[sigma8]

Uh...McDonald's isn't an American company? It may have been in the 60's when it was created in America, the company has been based in Europe for the past 20 years.
Do you seriously think the average Japanese person eating a Biggu Makku in McDonalds is aware of that?

edit: You might want to update Wikipedia. They are apparently under some delusion that McDonald's is headquartered in illinois.

http://en.wikipedia.org/wiki/Mcdonalds

...but hey people keep telling me that Georgia is in eastern europe...maybe Illinois is too.

[msanchez]

.....Sony is an Electronic God because of biased consumers. The same with game consoles, Nintendo, Sony, and whatever Japanese game companies come out will always do better then American systems. It's not because it's westernized, it's because they are just the kind of people who stick with their things. But I suppose it's to be expected, the US is pretty diverse when it comes to just about everything on a global scale so foreign products can do very well here even if they're not the best products.

As for the 360 bombing in Japan, that's a misconception. It's already sold more then the original Xbox along with more copies of games then the original Xbox in it's lifespan. On the other hand, the PS3 isn't selling well and Sony, as I mentioned before, is an electronic God in Japan. So comparing the 2, you have the Xbox franchise which no one really expects much of in Japan selling an alright amount (Obviously not great but better then expected) and Sony which is selling way under what was expected.....

Doesn't this seem a bit contradictory? first you say Sony is a god so they will always sell better then MS, but then you admit the 360 already did better then the previous attempt, simply because it has, at the very least 2 or 3, games that appeal to the japanese market?

[Scorpion3]

Doesn't this seem a bit contradictory? first you say Sony is a god so they will always sell better then MS, but then you admit the 360 already did better then the previous attempt, simply because it has, at the very least 2 or 3, games that appeal to the japanese market?

Sorry, I must have made it confusing to read. I mentioned RCA and Sony because I said Sony was an electronic god, as in TVs, CD players, etc. I never said they will always sell better, I said that the 360 was never expected to sell as good as the PS3, yet it has. In a complex way, I was saying that not all Japanese consumers are biased but there are a lot. And 2 or 3 games? Dead Rising has sold a lot, same with Lost Planet, Blue Dragon, Enchanted Arms, and Viva Pinata. But there are a lot more games coming to Japan later this year that Japanese gamers will like. Project Sylpheed and Vampire Rain especially since they're remakes of Japanese games made by Japanese devs.

[laesperanzapaz]

japan is important, but not all-important

[sigma8]

Sorry, I must have made it confusing to read. I mentioned RCA and Sony because I said Sony was an electronic god, as in TVs, CD players, etc. I never said they will always sell better, I said that the 360 was never expected to sell as good as the PS3, yet it has. In a complex way, I was saying that not all Japanese consumers are biased but there are a lot. And 2 or 3 games? Dead Rising has sold a lot, same with Lost Planet, Blue Dragon, Enchanted Arms, and Viva Pinata. But there are a lot more games coming to Japan later this year that Japanese gamers will like. Project Sylpheed and Vampire Rain especially since they're remakes of Japanese games made by Japanese devs.
Thus, the conclusion would be...that MS will sell better if they cater more effectively to the Japanese market?

It's not just the games, it's the marketing too. Here's a pic I took in Tokyo..
http://img168.imageshack.us/img168/7458/shibuyawiiadmz8.th.jpg (http://img168.imageshack.us/my.php?image=shibuyawiiadmz8.jpg)

You don't see crap like that for the Xbox360. They're just not spending at the same level. Paris gets barges on the Seine, but Tokyo gets diddly squat. Apologies if imageshack runs out of bandwidth. The picture is basically of some giant Wii ads in Shibuya, Tokyo (mega stylish teeny-bopper district).