Microsoft will slash the price of its Xbox 360 game console in Japan by about 30 percent, below Nintendo's Wii and Sony's PlayStation 3 as it tries to boost its market share, a newspaper reported on Monday.
Demand for the Xbox 360 has been tepid in Japan, mainly due to a lack of popular games. In contrast, the market-leading Wii is thriving on a range of innovative software, prompting Nintendo to raise its earning forecast on Friday.
KBC Securities analyst Hiroshi Kamide said a price cut alone is unlikely to trigger a jump in demand for the Xbox 360 and Microsoft needs to focus more on producing attractive software.
"Popular software is now serving as a tail wind to Xbox sales," he said. "Even if they slash the console price, that would not directly boost sales unless they release more good software," he added.
Robust demand for Namco Bandai Holdings' "Tales of Vesperia" role-playing game helped Xbox 360 sales in Japan beat the PS3 for the first time in the week ended Aug. 10.
Microsoft will lower the price of the Xbox 360 Arcade model by 8,000 yen ($73.92) to 19,800 yen, the Nikkei business daily said. The Arcade does not come equipped with a hard drive and is the least expensive of the three Xbox 360 models.
The company has already cut the price in the United States, Europe and four Asian markets as it tries to bite off a larger chunk of the $57 billion game industry.
The new price will make that model cheaper than Nintendo's Wii, which sells for about 25,000 yen, and the Sony's PlayStation 3, which sells for 39,800 yen.
The Wii's success has been attributed to inventive titles such as the "Wii Fit" exercise game, its low price and its easy-to-learn motion-sensing controller.
Microsoft will also reduce the price of two more expensive models with hard drives by 5,000-8,000 yen, the paper said.
Microsoft Xbox spokeswoman Kazumi Ishiyama in Japan declined to comment on the Nikkei report. The company is scheduled to hold a briefing on the Xbox 360 in the Japanese market at 3:00 p.m. local time on Monday.
In Europe, the Xbox 360 Arcade model already costs less than the Wii.
The Xbox 360 has lagged its Japanese rivals on their home turf, with 684,695 units sold so far in Japan against Wii's 6.67 million and PS3's 2.32 million, according to game magazine publisher Enterbrain. The Xbox 360 was launched about a year before its rivals.