Europe foots the bill for Microsoft Gestalt [21-Jan-2002]

It´s no great secret that most of the gaming industry views Europe as something of an afterthought, despite the fact that we´re already the world´s second biggest market for video games and still growing fast. The latest company to catch flak over this attitude is Microsoft, whose Xbox is (finally) launching in our neck of the woods on March 14th at a price of £299 / €479, compared to the US list price of $299 (£210 / €340) and the recently announced Japanese launch at ¥34,800 (£185 / €300). This means that Europeans will be paying significantly more for their Xboxes, despite the fact that Microsoft have a dedicated factory pumping out the consoles in Hungary, a country hardly renowned for its high labour costs.

"There are additional costs, such as shipping and taxes, which are reflected in the price", Microsoft PR reps on this side of the pond told us when we quizzed them about the discrepancy. But while we understand that sales taxes (which are in the 10-20\% range in most European countries) do make a significant difference, this still doesn´t really explain why European gamers will be paying 40-50\% more for an Xbox than their American and Japanese counterparts. And if distribution costs are such a big factor, surely the Japanese pricing should be much higher?

Microsoft insist that "the price represents tremendous value" despite the hefty mark-up, but it does leave the Xbox at a distinct disadvantage in the coming European console war. The PlayStation 2 is already down to a mainstream friendly £199 and is widely expected to shed a few more pounds before March, while the GameCube should also cost significantly less than £299 if / when it eventually arrives in Europe. By comparison, in America the Xbox went head-to-head with the PS2 on price, and was still marginally outsold by Sony´s year old veteran over the festive season, probably thanks to the arrival of eagerly anticipated games like Final Fantasy X and Metal Gear Solid 2. Both games are expected to arrive in Europe just before the Xbox.

The Xbox´s saving grace is that you get more bang for your extra bucks, including a couple of features which are relatively expensive optional extras on the PS2. "Xbox is the ultimate games console", our PR contact swooned. "Advanced features such as the Nvidia graphics card, online readiness out of the box, and the in-built hard drive mean that €479 / £299 is an extremely competitive price for Xbox. We´ve been aggressive with the introductory pricing for Xbox since we want to grow the market and make retail, publishers and gamers happy. This is a price that meets all those criteria."

Despite Microsoft´s protests of innocence though, we have already heard of at least one online petition complaining about the console´s European pricing, and at the time of writing some two thousand people had signed it. Although this won´t have any impact on Microsoft´s plans for the Xbox, it does show that there is some discontent amongst hardcore Euro gamers, who are once again getting the feeling (whether or not it is justified) that they are being ripped off...

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