MS to Sell Core Xbox 360 in Japan

While the Xbox 360 has been fairly successful here in North America, in Japan the console has been largely a flop. Data from research firm Enterbrain indicates that only about 158,000 units of the next-generation console have sold, a tiny fraction of the five million consoles sold worldwide.

Part of the reason may be Microsoft's decision to only sell the premium Xbox 360 version in Japan, so on Thursday the company said it would also begin to offer the Core model, which does not include the external hard drive and wireless controller, in an effort to boost sales.

As a further incentive to spur sales, the company will for a limited time include two free games with consoles sold in the country.

The Core version would sell for 29,800 yen, or about $255 USD. This would make the console cheaper in the country than it is in North America, and follows a similar price drop on the Core system in the United Kingdom to 199 pounds from 209 pounds, equivalent to a $20 drop.

Microsoft has repeatedly denied that it has any plans to cut the price of the Xbox 360, and some sources have indicated it would likely keep prices the same but add to the starter packages. Like in Japan, Microsoft has been rumored to be considering bundling games with the console.

With the PlayStation 3 looking to be more and more of a non-factor this holiday season, Microsoft stands to benefit from frustrated Sony consumers who will likely have a hard time finding the console. Only 400,000 of the consoles would be available in North America, and 100,000 in Japan at launch, the company disclosed this week.

Compare this with the Xbox 360, which now has ample supply through most of its retail channels, and would likely be able to ensure its partners are well stocked for the holiday season. Additionally, Microsoft may also be able to gain an upper hand by being able to negotiate better hardware costs earlier than Sony could, allowing for price cuts in the future.

JupiterResearch senior analyst Joe Wilcox said not to expect price cuts in the US in the short term, but entertained the idea as the PS3 gets closer to launch.

"The move is likely about increasing market share in places where Xbox 360 hasn't done as well as the US. Remember that in Japan, Sony has the home court advantage, he said. "With the launch of PS3 nearing--and with a hefty price tag compared to PS2 or Xbox 360--Microsoft may believe it can woo more buyers by making the price difference even bigger between the consoles."