Europeak: Currency

Currency: The Bane of European Gamers

After witnessing the succesful launch of both the Microsoft Xbox and Nintendo Gamecube in the US, European gamers have been doing the usual thing; waiting.

Microsoft announced its European plans regarding the Xbox in the fall and after months of speculation Nintendo decided to give away its European plans right around the Milia event.

During the 1980s Nintendo was synonymous with the word videogames, and now Playstation has reached the same status in Europe. For a period of almost 18 months Sony's had Europe all to itself. Sega's Dreamcast never really registered outside the UK and France, and even in those markets Sega never managed mainstream interest. All the while SCEE has gotten the Playstation brand firmly entrenched in European consumers minds -- a big hurdle for competitors in Europe.

In terms of reaching the market, the slight advantage both Sony and Microsoft have over Nintendo is that both have better market penetration in the smaller markets of Europe and the middle-east. While the number of Playstation 2's Sony has sold on these markets is not massive, its an important growing market that Nintendo has never properly been part of.

Nintendo of Europe's managing director David Gosen, having finally revealead Nintendon's plans regarding the European launch of the Gamecube, says its Microsofts Xbox - or rather its pricing--that deserves more scrutiny.

The price of the Xbox in the 16 European countries that will see the launch of the console on March 14 is, according to Microsoft, 479 Euros. That price however does not include certain taxes and additional costs that force the retailers to push up the price in areas like Scandinavia, where the price will be closer to 519 Euros. That translates to $449, quite a lot more than the $299 US consumers have to cough up. To clarify the issue, it has to be stated that the European release of the Playstation 2 faced similair circumstances with the Sony unit launching at around 500 Euros.

However, Sony's consoles are manufactured exclusively in Japan whereas Microsoft's PAL and Japanese NTSC-units are mostly manufactured at Flextronics' Hungarian plant. Where it all gets interesting is that the Japanese units manufactured in Europe are priced at 34800 Yen -- about $260 (and for only $50 more you can get the snazzy looking, partially see-through limited edition).
Apparently its cheaper to ship the units via airplane over to Japan than it is to transport them across europe on trucks...

Naturally the matter is not as clear cut as this, but Microsoft's European pricing is, no matter which way you calculate it, disapointing. The switch to the Euro currency that several European countries opted for in the new year has slowed down consumer spending, though the feared recession doesn't look to materialize just now.

It seems that success in Japan is all that matters to Microsoft in its quest for credibility as a console manufacturer. Followign the financial success of the US launch, and the apparently likelyhood of a strong debut in European territories as well) perhaps the Japanese market isn't quite as crucial to Microsoft as it was 12 months ago -- in terms of finance of course.

Nintendo of Europe came out swinging with its plans for Gamecube's European launch. After months of rampant speculation regarding the small amount of units for day one (200,000) and post-poned release date (fall 2002), NOE's managing director David Gosen finally revealed the details in late January.

Gamecube will ship on May 3 with over 20 games and, more importantly. a very attractive 249 Euro ($215) price tag. According to Gosen there will be 500,000 units available for the whole of Europe (or rather the dozen or so countries which will be part of the initial launch) with a total of one million units available during launch period. Marketing plans haven't been revealed, but the launch certainly wont suffer from a lack of games; besides Nintendo's own titles, there will be over a dozen key third-party titles available. Encouragingly, more mature titles such as Eternal Darkness and Resident Evil were mentioned several times as key titles for the system. The current European gaming market, having largely been shaped by Sony's marketing, is far more attracted to Playstation-style rally and action games than to the likes of Luigi's Mansion or Pikmin. While no one doubts the quality of the upcoming Mario Sunshine and Zelda titles, their attitude and kiddy image might not be enough to bring Nintendo success in Europe. Sadly, when asked about the issue regarding proper PAL conversions, Gosen didn't give a clear reply. Let's hope substandard 50Hz conversions are truly things of the past. Interestingly, Nintendo of Europe has come down hard on importers --especially in the UK-- telling them not to sell import Gamecube's or they wouldn't receive PAL units.

Europe hasn't been an important market for Nintendo, a fact made clear by delayed release dates, years of lacklustre PR efforts and general difficulty the press has had in dealing with the company over the years. The Gamecube announcement comes on the heels of an Gameboy Advance pricedrop and with Nintendo PR activity on the horizon, it looks as if the company will care just a little bit more about the European market.

Despite Nintendo of Europe's positive announcements its still Microsoft who has by far the better momentum going for it in Europe. By late last year Microsoft had already started its PR campaign to raise awareness for the impending Xbox launch. Importantly it was general media and mainstream press that were targets of Microsoft's early PR efforts, which is indicative of the consumers that Microsoft is going for. Of course the European games press has been covering the Xbox at length and with Microsoft's PR and marketing being highly effective, everything points to a strong European debut at launch.