Fan Art for the Xbox 360 in Japan.

OCT. 22, 2007 • Languishing in third place behind the Wii and the PS3 in Japan, Microsoft lowered the price of the 20GB Xbox 360 Pro to ¥34,800 ($304)  from ¥39,795 ($348). The Core version was lowered from ¥29,800 yen ($261) to ¥27,800 yen ($243).  The reduction follows Sony’s similar move with the PlayStation 3 earlier in the month. As it was struggling to meet demand for the Wii, Nintendo said a price cut for that system  was out of the question. The Wii sells for ¥25,000 ($222) in Japan.  In the U.S., Microsoft re-branded the Core SKU as the Xbox 360 Arcade. Priced at $280, and including HDMI output and five popular Live Arcade titles, the unit is marketed as a family-friendly console.

Impact:   The Wii continues to lead Japan, but the PS3 is showing some slight momentum.  DFC believes that the Xbox 360 will never make much of an impact in Japan.  Of bigger concern is yet another repackaging of the Xbox 360.  Earlier this year Microsoft chased after Sony with the Elite SKU.  Now the Arcade SKU seems to be trying to chase after Nintendo.  The problem is “arcade” games are not the reason for the Wii’s success.  The word arcade conjures up retro-classics like Pong, Pac-man, Space Invaders etc.  These products are widely available online and also for every game system since the dawn of time.