Xbox360 sales may soar over the next few months, but chances are Microsoft India won't be too pleased. The Indian market is being inundated with unofficially imported consoles and pirated games.
According to reports on the internet, Chinese hackers worked around Microsoft's several layers of copy protection by focussing on a relatively simple component - the DVD-drive. A hacked Xbox360 with a 20 GB hard drive costs between Rs 20,000 and Rs 23,000. The official price for India is around Rs 27,000, buffered up by import duties and VAT.
While legitimate games retail at a stiff Rs 2,500, pirated DVDs sell for Rs 150 and are ubiquitous at software piracy hubs like New Delhi's Palika Bazaar. Several A-list games (Need For Speed: Carbon, Call of Duty 3) as well as popular titles exclusive to the console like Gears of War and Dead Rising are also available.
Microsoft's attempts to legitimise grey market channels appear to have backfired. A few months ago, an authorised dealer for Xbox360 in Mumbai (also one of the biggest vendors of pirated video games across platforms in the city) was complaining about the sluggish sales of the console.
He'd been able to move only 30 of the 100 pieces supplied and made no secret of the fact that he saw greater profit potential from PlayStation 3 and Nintendo's Wii. In fact, some say that it's these very shops that are foremost in selling imported, hacked Xbox360s.
To its credit, Microsoft has given the Indian consumer several incentives to stay legit; dropping the price of the bare bones core edition to Rs 19,990, throwing in a free memory card and helping with EMIs.
Mohit Anand, country manager, entertainment and devices division, Microsoft India says: "The government levies a very high import tariff of 54% which raises the product price."
This helps the grey market beat Microsoft India, considering the price for a fully loaded Xbox360 works out to Rs 18,500 globally. The surge in piracy is particularly significant considering the fact that the new wave of consoles were supposed to be virtually crack proof.