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GameCube European Box Final Piece in Global Game Battle

3 May, 2002 By: David Ward

Acknowledging the fierce competition that already exists worldwide in the video game industry, Nintendo dropped the price of the GameCube console in Europe 25 percent, to between $177 and $187, even before it launched the new system last week.

The move came only a few days after Microsoft cut its Xbox hardware price in Europe and Japan (by $146), and provided the clearest signal yet that neither Nintendo nor Microsoft are going to let Sony PlayStation 2 become too dominant around the globe.

The war that Sony, Microsoft and Nintendo are waging for the hearts of video gamers really consists of a number of smaller battles taking place -- in Japan, Europe and North America, and also Korea, Australia and Latin America. Each market has its own quirks. What does well in one region -- be it a game, hardware or even an accessory -- may not be a huge success in another. As a result, Nintendo of America senior marketing VP George Harrison said, “We pay attention to what goes on in Japan and Europe, but most of our decisions are based only on what's happening in this market.”

PlayStation Domination
It's a PlayStation 2 world no matter where you go. Sony recently announced it shipped 18 million units of hardware worldwide in the fiscal year ended March 31 and projected it will ship another 20 million to 22 million units during the current fiscal year. But Nintendo, and to a lesser extent Microsoft, have reasons for optimism, most notably the solid launches both had in the United States.

In Japan, Sony continues to do well, but one game executive who asked not to be identified noted, “GameCube is doing respectably. They're not doing Sony numbers, but they've definitely carved out a niche.” Xbox, however, has been reeling in Japan since late February, when its launch was marred by a hardware flaw that inadvertently scratched some discs. Reports put Xbox Japanese sales at less than 200,000 units, and despite the recent price cut, Microsoft is clearly going to struggle in its competition against two Japanese companies.

“The Xbox in Japan is doing really bad,” the game executive said.

According to BBC News Online, Nintendo has shipped nearly 4 million GameCubes in Japan and North America, and Microsoft expects worldwide Xbox units to be as high as 6 million by the end of this year.

Xbox performed better in Europe since its mid-March launch, but even that's been tempered by the fact that until recently the only competition was PlayStation 2. Several sources said Microsoft was setting its European Xbox launch price too high, forcing an adjustment several weeks ago. But European game fans have traditionally been more price-sensitive, and even Sony struggled until a Christmas price drop jump-started PlayStation 2 sales last year.

Software Dilemmas Add to the Mix
Experts caution against predicting success in one market based on how a game or console is doing in another. In Japan, for example, music-and-dance-themed games are all the rage, but have been only modest successes in the United States.

TDK MediActive CEO Vincent Bitetti said his company opted against launching its Shrek game in Japan. “The movie hasn't done as well there,” he said. “The Japanese in general aren't really interested in character games that have come from the United States. The only exception to that has been Crash Bandicoot.

But Harrison pointed out that sometimes games and characters whose appeal initially seem limited to one region can turn into a global phenomenon, citing the “Pok?mon” franchise as an example. He said Nintendo hopes history repeats itself somewhat with Animal Crossing, which the company decided to bring to the United States for GameCube this fall following a tremendous response in Japan.

Software producers are willing to piggyback on the hardware makers as they compete in multiple markets.

Nana Ishizuka, director of marketing for Sammy Entertainment, said, “It is a great opportunity for a third-party publisher to be able to release games for so many platforms, and to reach such a broad, international consumer base.”

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