As far as India is concerned, the xBox is the x’ed Box, if this report from CNBC-TV18 is to be believed. The console has apparently been such a dismal failure in India that Microsoft (NSDQ: MSFT) is reportedly winding up operations in several Tier-I cities. MS’ Entertainment & Devices Division (EDD) has also withdrawn the marketing budget for India, and Ashim Mathur, Marketing Head for the division has planned to leave the company. Mathur has denied any such development, and the company has, expectedly, given CNBC-TV18 a standard response, that everything is going according to plan. More here.

This comes a few months after Mohit Anand, Country Head for EDD left to join Channel V. Anand had mentioned that the lack of lack of government support for gaming (i.e. - reduction of duty, and a gaming policy) was the most disheartening aspect of his tenure. At a conference last year, he had mentioned that the xBox business is not expected to break even until 2011. Now it appears that MS is reducing market exposure.

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Anand had often made a pitch for reducing the overbearing 37.1 percent duty that is levied on the console. With the duty, the xBox 360 Pro console is priced at Rs. 23500 plus tax, while, the last time I checked, the modded, grey market version (prominently displayed at Palika Bazaar in Delhi) was for Rs. 19000. Piracy may be a key reason - the games priced upwards of Rs. 1500 are available for as little as Rs. 100. A recent increase in Excise Duty on packaged software (from 8 to 12 percent), would have made things worse. Ever since its launch in September 2006, Microsoft has refused to disclose sales numbers for the xBox 360.

Microsoft did try a number of things to make the console more accessible - they tied up with ICICI Bank to offer the Xbox360 on EMI (Equated Monthly Installment), cut prices during the festive season and stuck content deals with movie producer UTV and education content provider Educomp. xBox Live was launched as an incentive for users to buy the legal console instead of the pirated, modded version. But more bang for the buck with pirated content, it seems.