Video Game Giants Stake Out Strategies
Wednesday May 16 10:04 PM ET
By Scott Hillis
LOS ANGELES (Reuters) - The lines are drawn, now let the games begin.
Three companies duking it out in the video game industry -- Sony Corp., Nintendo Co. Ltd. and Microsoft Corp. -- on Wednesday detailed their plans for ensuring victory for their respective next-generation video game consoles.
Each highlighted their strong suits, with Microsoft pointing to its high-tech system, Nintendo showcasing its beloved cartoon characters and Sony boasting 10 million units already in homes.
Newcomer Microsoft, better known for its Windows operating system and Office business software, kicked off the first day of the Electronic Entertainment Expo, the game industry's annual trade show, by declaring that its new Xbox console will go on sale on November 8 for $299.
``In 14 short months we've made the Xbox a reality,'' Chief Xbox Officer Robbie Bach told several hundred journalists and developers who turned out early to hear the first announcements of the show.
Microsoft's pitch played up the beefy hardware the Xbox boasts, but more importantly, also showcased several games that will debut this year.
Convincing gamers that the Xbox will have fun, high-quality titles is seen by analysts as key to Microsoft's ability to woo consumers away from Sony's PlayStation 2 console and Nintendo's upcoming GameCube machine.
The Xbox would have 15 to 20 titles available at launch, with dozens more in the following months, Bach told Reuters in an interview earlier on Wednesday.
Showing off the intricate detail, realistic water and complex shadows of Xbox games, Microsoft demonstrated its marquee games, ``Halo,'' a fast-paced science fiction shooter, and ``Munch's Oddysee,'' a bizarre fantasy adventure that is the latest installment in a series.
Microsoft also has the advantage of being awash in cash. It plans to spend $500 million to market the Xbox in the first 18 months after launch. In contrast, Sony plans to spend $250 million to promote its PlayStation consoles in North America.
Despite what will surely be intense competition with Sony and Nintendo, which is launching its GameCube in the United States just three days before the Xbox, Bach said he expected to sell 1 million to 1.5 million units through the holidays.
The Xbox's PC-based innards, which include a central processing unit, separate graphics and audio chips, an 8-gigabyte harddrive and a high-speed network connection, are more complex than other platforms, but Bach said Microsoft would avoid the kind of production hassles that plagued the U.S. launch of the PlayStation 2 last year.
``The components are all there. We don't expect any bottlenecks. Everything is going really well,'' Bach said.
Shares in Microsoft rose 89 cents, or 1.3 percent, to $69.16 in Nasdaq trading. Although off its year high of $82.88, Microsoft has rebounded nearly 60 percent so far this year, making it one of the best performers in the Dow Jones Industrial Average.
MARIO'S CROWD
Shortly after Microsoft's event, Nintendo thrilled its audience by unveiling its boxy purple GameCube and showing off several games.
In contrast to Microsoft's emphasis on technology and hardcore gaming, Nintendo played to its own strengths, namely the strong franchises in characters like ``Mario'' and of course ''Pokemon.''
``If you want our world-known names, you can't have them unless you own the Nintendo machine,'' said Satoru Iwata, Nintendo's director and general manager of corporate planning.
``We believe we know what makes a good game better than anyone else,'' Iwata said.
Although the GameCube has the same 128-bit data processing capacity as the PlayStation 2 and the Xbox, Iwata played down the machine's technology, saying 3-D graphics are already at TV-quality and will soon reach their limits.
Nintendo may have slightly fewer titles at launch than the Xbox, releasing five to seven of its own games and several unspecified others from outside games publishers.
A detailed roster of launch titles and GameCube pricing information will be announced at an investors meeting on May 24, the company said.
``With Nintendo's content, it's going to be make it hard for Microsoft, and (Nintendo) is probably going to come in at a cheaper price,'' said Zachary Ligget, a Tokyo-based analyst with WestLB Securities.
GameCube games include ``Luigi's Mansion'' featuring the lesser-known brother of the popular Mario character, fighting game ``Super Smash Bros. Melee'' and an all-new title called ''Pikmin'' featuring armies of ant-like creatures.
SONY'S GAMBLE
If Microsoft is gambling on the Xbox's technology and Nintendo is banking on its powerful franchises, Sony is rolling the dice in a new direction.
Wrapping up the day's action, Sony hosted a lengthy presentation that highlighted its plans to convert the PlayStation 2 into a home entertainment hub, adding new Internet capabilities and accessories that essentially turn the console into a personal computer.
``The PlayStation 2 is poised for the lead position, but we're also poised for new territory,'' said Kazuo Hirai, president of Sony Computer Entertainment America. ``This year we are going to deliver on the online and connectivity promises that we made (last year).''
Later this year Sony plans to start selling a 40-gigabyte hard drive and a combined dial-up modem and high-speed Internet connection to plug into the PlayStation 2, Hirai said.
Those add-ons are key parts of Sony's entertainment hub strategy, allowing users do download music, video and expansions for games.
To help enable those scenarios, Sony said on Wednesday it is partnering with Internet media software company RealNetworks Inc. to make the PlayStation 2 capable of playing audio and video broadcast or downloaded over the Web.
That followed a deal earlier this week with AOL Time Warner Inc. to infuse the machine with Internet features like e-mail, online chat and Web browsing.
And in a step that further blurs the line between living room game console and personal computer, Sony will also make a LCD screen, keyboard and mouse for the machine.
``With the kind of installed base we have, we are an obvious brand for the interactive entertainment in the living room. It's going to be an extension of the immersive and compelling game play,'' Hirai said. |
