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Thoughts on the lack of support for game consoles in the Philippines

Posted this over at one thread in Pinoyxbox, I just thought to put it in the blog as well, because it summarizes my thoughts on the lack of official support from any of the major console makers for the Philippines. I think Microsoft is best poised to officially support the 360 in the Philippines compared to their rivals Sony and Nintendo. This is because of several factors which I wrote in the post below, in reply to Hsai from pinoyxbox:

http://www.pinoyxbox.com/phpnuke/modules.php?name=Forums&file=viewtopic&p=157920#157920

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another reason why there is no official support for consoles, with the exception of handhelds is the market. There are very few consumers that buy console-related products. The demographics in the Philippines is low.

I replied:

I think that, with enough serious effort and properly targeted marketing, console makers can create a demand for consoles. A market for games does exist and this is shown by the fact that pirated console games still sell well. The people here are aware of what video games are, and how fun they can be; but, unfortunately they always just gravitate towards the best deal, which is piracy. At the same time, people choose piracy because there hasn't been any real, serious effort on the part of either Microsoft or Sony to 'sell'/market console gaming here. Most Filipinos are used to pirated software, and most of them probably can't tell the difference between pirated games and originals. Whose fault is that? I think it's also the fault of the companies who don't want to sell their products here and don't want to take the effort to market their games to a specific target market. Just look at how Sony Philippines sold their PSP. They barely advertised that they were officially selling the games. Their lineup of games was not as complete as the lineup of the pirates in Greenhills (a well-known mall loaded with stores that sell pirated items) and other places. And to top it all off, Sony Philippines naively sold Japanese versions of games, completely forgetting that the market they're going after is NOT fluent in Japanese. It's half-hearted efforts like that that make it appear like there's no market. I think there is a market; it's just that the ones who've tried to crack the market always do a horrible, half-baked job, and they immediately attribute their failures to piracy or some easy reason, when in fact it's their own fault that they haven't succeeded. Sony Philippines also could have fought with the pirates if they wanted to. They could have used the press or other means to expose the pirates here, which are just everywhere, even in major malls/department stores. Instead they opted to just quit after a year (probably less), opting to sell those 100,000 peso HDTVs which are probably even HARDER to sell than game consoles.

Microsoft has an advantage now, because going with original games actually has some benefit; that is, one is able to play online on Xbox Live or download free content (if one decides not to pay for online gaming). And in a way, the 3 red lights of death problem (3RL) can work to their advantage here in the Philippines...because of 3RL it's very very risky to buy a modified/flashed Xbox 360. At least if you go original, you can have the system replaced because of that recently implemented 3 year global warranty. There's really a chance for them to enter the market or to create a market now. The library of games for the 360 at the end of this year is incredible. With a good strategy that targets a specific market, I think the 360 can succeed in the Philippines. They can do so many things....they can work with telecommunications providers and bundle the console with broadband deals. If they're worried about piracy they can just sell the console itself and let the importers handle stocking games (Sony could have done this, too). They can tie up with companies selling HDTVs and bundle the consoles. There's probably better strategies out there...I just refuse to believe that there isn't a market for game consoles here. If they can sell those ridiculous 40,000 peso cellular phones, expensive European sports cars and those aforementioned HDTVs, why not game systems? It's all a matter of marketing effort, and I think when they market they shouldn't go for the mass market. They shouldn't quit after a year or less like Sony Philippines did. They should see selling consoles as a long term thing. It's not like consoles are a fad that's going out of style anytime soon. A whole billion dollar, worldwide industry exists and revolves around console gaming. They can even bring this to the next logical step and create software houses here that can outsource work required for next generation games (game testing, artwork creation, the tedious stuff). There is immense opportunity in console gaming; let's hope that Microsoft Philippines will eventually realize that.

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Wuffy added this to the discussion, and I love the way she put it. She wrote:

Gaming consoles and handhelds cannot be treated as a commodity. It can never be on a equal footing to something as common as pre-paid cellular phone load.

That's the problem with the default assumption that there is no market for games in this country. Let's face it, these things are luxury items. You don't need a gaming machine in order to live.

When we look at luxury items the default target is easily the middle class and above. The MS Phils marketers probably see that the middle class and beyond percentages isn't so high in the country. More than 50% of the Filipino population are classified into D and E classes.

If MS Phils is so afraid to bring official support here since the market is 'poor' why in the world did they even bother to set up a 'CONSUMER MARKETING DIVISION' to sell Windows Vista to regular consumers and not their default corporate sales group? Do they think that D and E classes can afford original windows software?

Ok...so what if they treat the ordinary lan shops as corporate or consumer sales, they managed to make some headway in that area by cooperating with the OMB (Optical Media Board, a government agency in the Philippines) in cracking down on stores that promote or use pirated Windows software. Can't they do the same for consoles? Heck the OMB is confiscating PS2 and XBOX games during raids these days.

IMHO, there are several ways to bring official support here but MS appears to be looking at just one of them. They want to bring the console here with them being at the forefront of the service. That means increasing their staff (and perhaps their bloated salaries), warehousing, consumer marketing etc etc. But there are other ways to by-pass those things by giving it to distributors (not resellers) rather than doing it themselves.

All we need is for MS Phils to acknowledge the support of the console and its distributors. That's one step forward rather than staying in limbo and hoping that the XBOX 360 suddenly gains the appeal of Smart Load.

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