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Xbox not hot property in Japan

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CIOL Bureau
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Scott Hillis

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SEATTLE: Microsoft Corp.'s Xbox video game console is not selling as well as

expected in Japan, though the software giant says customers there and around the

world are buying more games than they did for Sony Corp.'s PlayStation 2.

"Japan is going well on the software side and probably is a little

behind where we want to be on the hardware side," Xbox director Robbie Bach

told Reuters in an interview.

"But we always expected things would be tough. Microsoft has

demonstrated patience and persistence there before and I think we will do very

well," Bach said. Bach declined to give specific sales figures or comment

on a gaming magazine report last week that said the Xbox had seen a slow start

in Japan, with sales of just over 190,000 units since its Feb. 22 launch.

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By contrast, Sony's market-leading PlayStation 2 sold 980,000 units in just

three days when it launched in Japan in March 2000. However, Bach pointed to

software sales as evidence that the Xbox was gaining popularity around the

world.

Game sales are crucial because they are highly profitable, unlike the Xbox

hardware, which Microsoft sells below cost in order to keep consumer prices

down. Japanese customers had bought an average of 1.6 games per Xbox so far,

compared to one game per PlayStation 2 at the same point after its release, Bach

said.

Bach said he was confident Japanese game developers, many of whom are said to

be highly suspicious or even hostile to Microsoft as it tries to crack a market

dominated by Japanese firms, would eventually fully support the Xbox.

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"We're seeing lot of strong support there. We expect our relationships

there to grow. It's not something you can jump in, and in three weeks you have

great relations with everyone. It takes three months, or three years," Bach

said. "There is still more work to do in Japan."

Growing the installed base



In the United States, where the Xbox debuted last November, customers had so far
bought an average of 3.8 games, while in Europe, where the console launched

about three weeks ago, they had bought 2.3 titles, Bach said.

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"It really speaks to the strength of the games, the breadth of content,

and in the end it really is all about the games," Bach said. Moreover, the

Xbox's premier game, a science fiction combat title called "Halo", had

now sold 1 million copies worldwide, reaching that mark about twice as fast as

the top PlayStation 2 game, Bach said.

The second-biggest seller was street racing game "Project Gotham",

with about 500,000 units sold, while martial arts fighting title "Dead or

Alive 3" was in third place, with sales of about 400,000, Bach said.

However, the video game market was expected to slow in the middle of the year

before getting its seasonal boost in the fall as the industry starts building

buzz heading into the holidays, Bach said.

Microsoft would preview several upcoming games at the main video game

industry trade show in May, as well as reveal some of its plans for starting

launching online gaming, Bach said.

"The critical next step for us is scaling the platform from being a

successful launch to being a broad-based success with a big installed

base," Bach said. "The second thing ... is our online plans. That

should be very infesting. We have some fun things to talk about, some fun things

to show."

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