Microsoft Admits Dramatic Repair Rate for Xbox 360

The company didn’t give a failure rate for the console, but said it made the move due to “an unacceptable number of repairs to Xbox 360 consoles.” An extensive inquiry studied potential causes of general hardware failures and identified “a number of factors,” Microsoft said, not specifying them. Any customer who paid for repairs related to the three flashing lights error message on the console will be reimbursed by Microsoft, the company said.

Separately, Microsoft will start selling its Xbox 360 Elite October 11 in Japan at 47,800 yen ($389.16 at $1=122.830 yen). The high-end version of the company’s console, with a 120 GB hard drive and HDMI port, shipped in the U.S. in late April but hasn’t launched in other markets. A European launch is expected late in the summer, but Microsoft has not provided specifics.

Elite supplies did not match demand in the U.S. In recent weeks, though, supplies have improved. The console could be found Thursday at Toysrus.com, GameStop.com and Walmart.com and other online retailers, the last two only offering it in higher-priced bundles. The console was listed as sold out at BestBuy.com and not even listed at CircuitCity.com. Xbox 360 sales have been strong in the U.S., especially in 2006.

The story is completely different in Japan, where the first Xbox sold weakly and Xbox 360 has fared little better. Xbox 360 sales saw an uptick in Japan after game Blue Dragon shipped there in December. Unlike the vast majority of Xbox and Xbox 360 games, the Microsoft Game Studios role-playing game (RPG) was developed by Japanese game designers and has become the best-selling 360 title in Japan.

But the latest Japan videogame sales data from research firm Enterbrain show that despite the Blue Dragon boost, 360 sales distantly trailed rivals’ the first six months of 2007. Microsoft sold only about 122,565 Xbox 360s in Japan, compared with Japanese sales of 1.78 million Wiis and 503,554 PS3s, according to Enterbrain. Wii’s Japan installed base reached 2.76 million, Enterbrain said. In June, only 17,616 Xbox 360s were sold, compared with 270,974 Wiis and 41,628 PS3s, it said.

But just as in the U.S. the Nintendo DS was the best- selling system in Japan, selling 3.73 million units the first half and 535,012 units during June. As in the U.S., most DS units sold were the newer, improved DS Lite. Also as in the U.S., the PSP trailed far behind DS, moving 1.03 million units in the first half and 113,297 in June. Unlike in the U.S., however, Nintendo’s Game Boy Micro still sells in decent numbers, moving 23,752 units in the first half and 2,148 in June. That compared with only 22,164 units of the Game Boy Advance SP in Japan in the first half and 1,988 in June. Sony sold 407,472 PS2s in the first half and 49,104 in June, Enterbrain also said. Enterbrain data -- even more than NPD’s in the U.S. -- must be taken with a grain of salt since they don’t include all retailers but are based on 3,200 participating retail stores and 31,000 other franchise and convenience stores in Japan, it said.

Nintendo was far and away the top publisher the first six months, selling 11.12 million units of its games, with leading sellers including Wii Sports (1.1 million units), Wii Play (790,934) and Yoshi’s Island DS (779,873). Wii Sports is sold separately in Japan but included with the console in the U.S. Nintendo had 32 titles in the top 100 during the period. The number two publisher Capcom was far behind, moving only 2.6 million units of games including Grand Theft Auto: San Andreas for PS2 (397,057 units), which it publishes for Take-Two Interactive in Japan, Monster Hunter Freedom 2 for PSP (1.23 million) and Gyakuten Saiban 4 for DS (450,024). Rounding out the top 10 were Namco Bandai Games, Square Enix, Sega, Nintendo’s Pokemon division, Koei, Level- 5, Konami and Banpresto. Monster Hunter Freedom 2 was the best-selling videogame overall, followed by Wii Sports, Pokemon’s Pocket Monster Diamond/Pearl (882,280 first half and 5.19 million to date), Wii Play (1.29 million to date), Yoshi’s Island DS, Nintendo’s New Super Mario Bros. for DS (769,362 first half), Square Enix’s Dragon Quest Monsters: Joker for DS (761,407 first half and 1.39 million to date), Nintendo’s Brain Age 2: More Training in Minutes a Day for DS (704,829 first half), Koei’s new Orochi Warriors for PS2 (625,775 first half) and Level-5’s new Layton Kyoju to Fushigi na Machi for DS (577,770 first half).

Nintendo dominated the top 10 game chart for June with seven titles: The new Medicara for DS at number one (301,939 units), the new Legend of Zelda: Phantom Hourglass for DS at number two (288,282), Wii Sports at number four (115,494 in June and 1.65 million to date), DS Training Motto Eigo Zuke at number five (91,269 in June and 345,250 to date), Damashii Osu! Tatakae! Ouendan 2 for DS at number seven (88,520 in June and 160,635 to date), Brain Age 2: More Training in Minutes a Day at number nine (80,335 in June and 4.45 million to date) and New Super Mario Bros. at number 10 (75,425 in June and 4.59 million to date). Two games in the top 10 were for Nintendo systems: Square Enix’s new Itadaki Street DS at number three (140,560) and Capcom’s new Resident Evil 4 Wii Edition at number eight (81,481). The only game in the top 10 not for a Nintendo system was D3 Publisher’s Hissho Pachinko Pachi-Slot Koryaku Series Volume 10 for PS2 at number six (90,020).

Japan videogame industry sales overall jumped 25.8 percent from a year ago, to 318.96 billion yen, as hardware sales soared 67.7 percent to 153.72 billion yen, Enterbrain said. Software sales edged up 2.1 percent, to 165.24 billion yen. Overall game market growth was greater than a year ago, when the industry hit a yearly sales record of 625.79 billion yen, it said. Strong sellers for the back half of the year are expected to include Square Enix’s Dragon Quest IX: Hoshizora no Mamoribito for DS. Enterbrain said there are various, unspecified potential million sellers coming for Wii, PS3 and other systems, projecting they will help hardware sales.