Analysts to MS: Cut Japan Xbox price or fail

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By Fennec Fox

(IDG) -- Microsoft must cut Xbox prices in Japan now or else risk losing even more ground to Nintendo and Sony, according to analysts and investors in the region. According to Japanese research firm Media Create, the company sold a paltry 4,300 Xboxes in Japan last week, while PlayStation 2 sales exceeded 100,000 systems and Nintendo sold nearly 25,000 GameCube consoles.

The call for a price cut was first sounded by Takashi Oya, an analyst with Deutsche Securities Ltd. "There's no point in discussing the issue," Oya said. "Microsoft should not be thinking about saving face, they should be thinking about how to minimize the damage."

Fellow analyst Makoto Suzuki agreed: "Investors already think Xbox is irrelevant in the Japanese market. Sony is now the maker of choice among owners of home-use game consoles."

The Xbox was launched in Japan on February 22 and has faced a rash of difficulties since then, including lack of interesting software and a public-relations debacle over disc-scratching consoles. Microsoft has yet to sell out its initial Japanese shipment of 250,000 consoles. The system costs 34,800 yen (about $260) in Japan, $50 more than the PlayStation 2 and $100 more than the GameCube.