While a lot of hype surrounded the launch of Microsoft’s global Xbox One last November, the hype doesn’t appear to have been matched by initial sales with the company reporting a US$400 million loss on the console since launch.
A slew of initiatives have been implemented to boost sales, including bundling it with the highly anticipated Titanfall game and the addition of a US$75 promotional credit.
Microsoft isn’t too concerned about the loss, seeing console gaming as a long-term investment, Anna Chow, head of marketing consumer products at Microsoft, told Marketing.
“From the launch last November to April this year, Xbox has sold 5 million units across 13 countries worldwide. This is an impressive result,” said Chow.
“The previous version, Xbox 360, launched back in 2005,and is still on the shelves. The hardware itself is a long term investment, the gaming system can stay in the market for many years.”
In the ecosystem of gaming, there has never been a gaming system that has lasted without significant software updates, Chow said, the hardware itself serves only as a platform to carry gaming content.
“The product has a long life cycle, but it needs to be supported by constant gaming updates and gamer experience enhancements.”
The latest Xbox console, which debuted in Japan two weeks ago, arrives in Hong Kong this week.
Apart from the tried and tested strategy of targeting professional gamers, Xbox One offers a wider variety of content including enhanced fitness and dancing games and TVB’s content, via myTV, in an attempt to also engage families.
“Games can also be recorded and uploaded on our own digital game sharing platform Xbox Twitch.”
“Gamers are willing to invest big in buying new games. They are the key to spinning off the new product as they’ve built a strong social agglomeration in the gaming industry.”
While in recent years the gaming console market has faced an escalating challenge from mobile gaming Chow believes home entertainment is irreplaceable.
“The experience is different,” she said.
“Games on mobile devices and social media are for bite-size and instant entertainment; whereas Xbox, with its higher quality interface, is for the bigger screen mostly at home. It allows more privacy for gamers.”
Although gaming products remain a small part of Microsoft’s overall revenue, in comparison to software products, it is nonetheless an important part of its whole ecosystem.
“Gaming consoles play a big role in our ecosystem for Microsoft as it fills in the home entertainment sector,” said Chow.
“We hope to occupy consumer usage as much as we can. From outdoor to indoor, we want to engage consumers constantly with Microsoft products,” she added.