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Analysts Predict Bad Times For Xbox 360

| 6 Jun 2008 17:06
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Despite its success in North America, a panel of speakers at the Nordic Game 2008 conference are predicting the Xbox 360 will begin to "struggle" globally in 2008.

The panel suggested the Microsoft console could run into trouble in markets outside North America because of its "disastrous" failure to catch on beyond the FPS market. Part of the reason for that, according Nick Parker of Parker Consulting, is a "fundamental image problem" with non-American audiences. "The trouble with Xbox 360 is it hasn't managed to shake off this urban, irreverent adult male feel," Parker said, "so it hasn't gained traction in the more casual gaming markets of mainland Europe such as France, Spain and Italy, where it's stalled. And there are already rumors of Xbox 360 being delisted from certain retailers."

"I think they started off badly with the Xbox itself: blood and breasts," he continued. "This alienated it immediately to a lot of consumers around Europe, and they never got over that. The brand image never went away. And although Halo 3 is a big game, it just emphasizes again what the Xbox is all about."

David Cole of DFC Intelligence concurred, predicting that Microsoft would end up on the short side of the global console wars. "When you look at an installed base basis, the Xbox 360's going to come in third place when all is said and done," he said. "The concern I would have with a company like Microsoft is, one of these days they're going to have to make a profit on this business, otherwise, why are they in it?"

Cole added that while publishers of FPS titles could still make a killing on the 360, other genres have much more difficulty succeeding on the platform. "If you're doing a first-person shooter title, you're clearly going to want to be on the Xbox 360, and that's for years to come," he said. "(But) their efforts at marketing outside of the first-person shooter crowd have been disastrous."

"(Microsoft) gets very defensive because they realize the U.S. is their last stronghold now as their sales go into decline across the rest of the world," added Parker, referring to a statement made in May by Xbox executive Don Mattrick that Microsoft's achievement of ten million console sales was a major step toward victory in the console wars. "So they're a little bit desperate and they're clutching at straws now to cling on to what they've got in the market which is primarily the U.S."

While the Xbox 360 is a strong performer in North America, it hasn't met with similar levels of success internationally. The system's global installed base of 19 million units is ahead of the PlayStation 3, which has just under 13 million, but the Xbox 360 was launched a year earlier than both Sony's unit and the Nintendo Wii, which leads both consoles with well over 24 million units sold.

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