Microsoft Hong Kong has undertaken a lobbying campaign to convince its head office to distribute the Xbox gaming system in the SAR. General manager Mark Phibbs said his staff was building a case for a local launch and had met senior Xbox officials to discuss the project. 'There is lobbying going on. If you ask around the hallways here, people here would certainly like to see Xbox launched in Hong Kong,' Mr Phibbs said. '[The Xbox management team] are open to the Asia scenario, but we still need to do the due diligence. The business case has been presented and we are just doing the fine-tuning on it. We clearly want to sell Xbox here only if we can make it a great success.' The Xbox was first sold in the United States and Canada last November, and has since been introduced in Japan, Europe and Australia. But seven months after its launch, there has been no decision made as to when - or if - Xbox will be officially made available in Hong Kong. Mr Phibbs acknowledged there were challenges to overcome before the Xbox was launched locally, including Hong Kong's relatively high levels of software piracy. 'It's one of the factors we have to consider. Clearly we have some security [issues] because we make some of our money off the games. Piracy in Hong Kong has to come down for this city to be world class,' he said. Mr Phibbs said the piracy rate for gaming software rates was difficult to accurately gauge, but he believed that more than half the games in use locally were illegal copies. Concerns have been raised that Microsoft may never sell the Xbox in the Greater China market due to software piracy. Microsoft manufactures the Xbox hardware at a loss, and hopes to make money from software licences. The consoles are available as grey market imports in Hong Kong, but Microsoft will not support customers or honour warranties. Mr Phibbs said there have been cases locally of people buying the Xbox from unauthorised retailers and then being turned away by Microsoft when they came looking for customer service. 'There have been a few, not a flood. The product is pretty reliable. If it wasn't, it would be a disaster for us,' he said. Of the other big gaming console companies, only Sony, with its Playstation 2, has decided officially to enter the Hong Kong market. Mr Phibbs said Microsoft also faced the challenge of finding a suitable distributor. Gaming consoles were a low margin product, he said, and were more suited to large retailers. 'The retail sector here is not as advanced as some markets. You have the computer centres here but there is no such thing as a computer superstore,' he said. Even if Microsoft does decide to launch the Xbox in Hong Kong, gamers who want an 'official' console could still face a lengthy wait. Mr Phibbs said it could take another five months before a decision was made and then several more months for a local distribution network to be established.