Email: Xbox in Mexico

The Xbox is doing fairly well here. At least I see lots more of them in the big-box stores (which are springing up everywhere to feed the appetites of the rising middle class). You also see people running arcades where you can go pay a few bucks an hour to plop down in front of an Xbox and play for a while. The PS3 is almost nonexistent, but Nintendo’s got a pretty good presence. 

 

The way Latin America is, fortunes could change, but people seem to be tired of being poor, and the gains from opening up their markets are obvious enough that they could become an important economic force in the next decade.

 

Of course, they’re still a rounding error on global console sales, but it’s worth thinking about.Mexico wisely is allowing foreign oil companies to come in. For those who don’t know, Mexico’s oil and gas companies are owned by the Mexican government and Mexico’s Constitution makes all the oil owned by the people. Despite all that, Mexico imports its energy. I think the new Mexico president has addressed this and is why they’re allowing foreign companies to come in. This nationalization of companies has been a failure in terms of creating production.

In the United States, oil and gas / energy makes up 10% of the economy. The manufacturing industry is heavily reliant on cheap energy. When the United States began to import most of its energy, the manufacturing costs went up and is the reason why manufacturers went to other countries.

So why are these oil and gas companies investing so heavily in the United States right now? Why are they bothering with this expensive fracking instead of going for easier to get oil in other places of the world?

The answer is summed up by the armed guards that guard the South American rigs. There is no regulatory regime in many of these nations. My impression is that these companies are saying ‘frack this!’ and would rather plow ahead in the US regulatory regime. It’s amazing to hear their optimism as well. “As we make more energy, the manufacturing will have a renaissance.” They’re saying this today.

Until those armed guards are removed from those rigs, that workers are not told to fear for their lives (and paid a massive increase just to work there), I don’t think there will be any longterm change in those areas. The regulatory regime needs to be changed, and I don’t see that happening.

As for Xbox in Mexico, that’s likely because Mexico is very Americanized. At least, it is FAR CLOSER to America culturally than say Asian nations.