Microsoft Corporation (MSFT): The Future of the Xbox

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There is no doubt that Japan is a very different market than the U.S. Microsoft Corporation (NASDAQ:MSFT) knows this all to well, especially in the gaming segment. Microsoft has become the undisputed leader in gaming in the U.S. behind its Xbox franchise, but that very same franchise just has not done well at all in Japan. In fact, it has one-fifth of the market share as its top U.S. competitor, PlayStation by Sony. With that as a backdrop, and a talked-about Xbox upgrade coming on the horizon, Microsoft is pushing to increase  its visibility among gamers in Japan by introducing a new marketing campaign it is calling the 1 Million Hour Challenge.

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Microsoft Corporation (NASDAQ:MSFT) has never really had a strong hold on the Japan market, so to take this on as an attempt to draw some new customers who really haven’t been is a bold move. What makes it so bold, ultimately? Reports are that Xbox and its correlated games have done so poorly in Japan that some retailers have not only stopped selling them, but they’ve outright stopped carrying them altogether. So with the new “Xbox 720” (or whatever it will ultimately be called) due to hit store shelves in a few short months, Microsoft is trying to encourage gamers in Japan to try out the Xbox 360 in the meantime and the company says it will reward all Xbox gamers who contribute to the 1 million-hour goal.

The challenge goes like this: All gamers who log in or sign up and play one of a list of 20 Xbox games between mid-April and mid-June will contribute their time to 1 million hours of play during the two months. As the aggregate total of gaming time increases to certain levels, gamers will receive Microsoft Points they then use for games or other Xbox products.

The points giveaway applies both to paid subscription Gold members as well as to free members. And it does not matter how many hours each individual gamer plays; once the aggregate total of gaming time reaches 300,000, 500,000 and 1 million hours, all gamers who participate will get the points.

Based on estimates of the market in Japan, if only the current Xbox users tune in on this challenge, they would need to average a whopping … 40 minutes of playing time during the two months. If this 1 million-hour challenge applied to PlayStation users in Japan, they would only need to play less than 10 minutes each.

The challenge here is that Japan is a market that tends to loyally support domestic companies rather than foreign ones. American cars don’t do well in Japan because of Honda and others, and Microsoft Corporation (NASDAQ:MSFT) has had difficulty breaking through against local company Sony. There is a large national pride factor that will need to be overcome. It will be interesting to see if this campaign will do the trick.

What are your thoughts? Should Microsoft Corporation (NASDAQ:MSFT) push this campaign, or might this market be a lost cause for the gaming segment? Give us your feedback in the comments section below.

Continue reading for a beautiful (concept-based) sneak peek of the next Xbox:

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