Tue, Jul 01, 2003 - Page 10 News List

Microsoft cuts price of its Xbox

GAME ON The top makers of game consoles were set for a summer of increasing competition after they both reduced the price of their devices to below NT$7,000

By Bill Heaney  /  STAFF REPORTER

Competition in the local game-console market is expected to heat up this summer as the big brands engage in a price war. Microsoft Corp cut the price of its Xbox game console from NT$7,490 to NT$6,666 late Sunday evening, making it almost the same price as Sony Electronics Co's PlayStation 2.

On Thursday, Sony cut the price of the PlayStation 2 by NT$1,000 to NT$6,980.

Synnex Technology International Corp (聯強), the exclusive Taiwan distributor of the Xbox, welcomed the move yesterday.

"Microsoft's announcement of a price cut is positive news as many people would like to buy the Xbox and will be encouraged to do so now," Synnex spokesman Lin Chun-chien (林俊堅) said yesterday.

But some analysts are skeptical about Microsoft's ability to steal sales from Sony which controls around 90 percent of the local market, according to the government-funded Market Intelligence Center (MIC).

"I don't expect this price cut will help sales," said Sally Chang (張絮涵), an analyst at Primasia Securities Co in Taipei. "The problem is with the content, not the price."

Game players in Taiwan prefer to team together online and engage in multi-player competitions, whereas Microsoft offers more individual-centered titles.

"Sony's games are much more popular among Chinese gamers than Microsoft's," said Helen Chen (陳佩君), a game console market analyst at Polaris Securities (寶來證券). "Microsoft's action games are not really suited to Taiwanese players."

Since the launch of PlayStation 2 in January last year, Sony has sold 230,000 units in Taiwan, an unnamed source at the company said yesterday. Microsoft did not provide figures for Xbox sales in this country, but said it has sold 850,000 units across Asia since the device was launched in November. Nintendo, which produces the GameCube, did not return calls for comment yesterday.

Lin said Microsoft is now producing more Taiwan-oriented titles.

"This week we are launching Rise of Nations which will be very popular in Taiwan as it is more suited to Taiwanese players," Lin said. "This will enhance the Xbox and make it more popular in Taiwan. If Microsoft continues to publish good titles, it will definitely gain market share from PlayStation 2."

Microsoft cut the price of its games to between NT$690 and NT$920 on Sunday.

A spokeswoman for Microsoft's public relations company in Taiwan said yesterday that the Xbox was still catching up with the three-year-old PlayStation in terms of number of games.

"The Xbox is a new-born baby, so it doesn't have as many titles as its competitors," said Madeline Su (蘇嘉蒂) of Veda International (頤德).

Central to Microsoft's strategy to win more customers in Taiwan is a new online gaming system, dubbed Xbox Live.

"At the end of June we successfully tested Xbox Live with Taiwanese players," Grace Chou (周文英), Microsoft's home entertainment spokeswoman in Taiwan, said in a statement on Sunday. "We believe its attractive price will attract more people to join."

One analyst agreed that this would make up for some of the Xbox's shortfalls.

"Microsoft has announced that its online gaming will be available soon, and this will have an immediately positive effect on sales," said Arthur Tan (譚休齊), a researcher at Pyramid Research in Taipei.

Marketing efforts by the local distributor are also expected to push sales.

"Synnex will be very active in the second half of this year with promotions and price cuts and this should also have a positive effect on Xbox sales in Taiwan," Tan said.

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