UDPATE 2-Microsoft says no plans to cut Xbox Japan price

Mon Jul 9, 2007 9:53am BST

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TOKYO, July 9 (Reuters) - Microsoft Corp. (MSFT.O) has no plans now to cut the price of its Xbox game console in Japan, where it trails far behind rival machines from Nintendo Co. Ltd. 7974.OS and Sony Corp. (6758.T).

"Xbox prices in Japan are very competitive," Darren Huston, president of Microsoft's Japan unit, told Reuters on Monday. Asked if Microsoft plans to cut prices in Japan after Sony's $100 price cut for the PlayStation3 in the U.S., Huston said, "Not at this time."

But he later added, "We will be watching market conditions. Price cuts are one option."

Although popular in the United States, sales of the Xbox 360 have been slow in Japan, Nintendo and Sony's home turf.

Microsoft sold 122,565 of the consoles in the first half of this year in Japan, while Nintendo sold 1.78 million units of its Wii and Sony sold 503,554 of its PS3 game machines, according to game magazine publisher Enterbrain.

Microsoft also does not expect recent hardware glitches to affect appetite for its Xbox game console, Huston said.

Microsoft last week extended its warranty for the video game machine to three years, costing the software giant $1.05 billion to $1.15 billion, due to growing complaints about Xbox 360 failures.

Microsoft plans to launch its advanced Xbox 360 game console, the Xbox 360 Elite, on Oct. 11 in Japan. The most basic Xbox 360 sells for 29,800 yen ($240), compared with 49,980 yen for the basic model of the PS3 and 24,999 yen for the Wii.

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