Failure In A Box
2007-04-20
Information Arbitrage has some perspective and discussion on the Xbox 360 and sales in Japan (and on Microsoft's home entertainment division's performance).
Bottom line, 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." Would we have been better served by returning the extra cash to shareholders rather than investing it in a franchise that seems to have questionable prospects for turning around? These are the kinds of questions Microsoft management should be asking. And hopefully, for shareholders' sakes, they are.
Lack of success is not all that surprising if you look at some of the results of surveys of potential customers in Japan. These originally came from Macromill in January 2007. The graphs below were published on Flickr:
Amazingly the Xbox360 was rejected by 71% and deemed a potential purchase by only 4%. 9.3% new nothing of the Xbox360.The Wii was already ahead of the PS3.
The PS3 doesn't do much better:
And supply is surpassing demand. It's pretty amazing that the PS2 will almost certainly outsell all of them in 2007. My kids still play tons of PS1 games on our PS2 machine. If it broke, we'd get another.
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