Can Microsoft win that depends on your definition of victory. Pachter is right it is all but impossible for Microsoft to succeed in Japan this generation. They do have a cultural bias to overcome, and the only cure for that is time. You have to be realistic about these things. You will not remove the stigma of racism, nationalism, or economic security in a few years. That is not giving up without trying you just have to move the barrier a little bit at a time.
The cultural bias can play both ways however. We might be looking at a divergent market. Up until this point the market has been seen as a unified whole. However judging by the difference in sales. The North American, and the European consumers might be drifting away from their japanese counterparts. Microsoft can play to this by gearing their software development to these audiences.
Nintendo might win the war, but it could end up being a hollow victory if Microsoft is sitting pretty with twenty million consoles in North America, and Ten million in Europe. That is what really interests me Microsoft is in a potential position to split the gaming market along market boundaries. Microsoft does not need to dominate all it has to do is break off chunks.
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