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To: Jon K. who wrote (987)	11/15/2001 7:28:44 PM
From: Jon K.	Read Replies (1) \| Respond to of 29596

Strong Launch for Microsoft Xbox; Long Road Ahead Photos Reuters Photo Slideshows AP Photo Microsoft and Bill Gates Audio/Video Yahoo at $30? Analysts Debate Yahoo's Value - (Yahoo! Finance Vision) By Franklin Paul and Ben Berkowitz NEW YORK/LOS ANGELES (Reuters) - Microsoft Corp. (Nasdaq:MSFT - news) was on track on Thursday for a sellout of the first shipments of its Xbox (news - web sites) video game console, after a flashy midnight launch marked the start of its intense drive to score big in the $20 billion interactive gaming business. Bill Gates (news - web sites), the software giant's chairman, was on hand in the wee hours of the morning on Thursday, as hundreds of video-game enthusiasts queued up in New York's Times Square to be the first to buy the most powerful video game console ever. Gates walked the line of videogamers like a rock star, shaking hands and delighting Xbox fans by signing their copies of the game machine. Analysts says initial enthusiasm for the $299 Xbox must be sustained by exciting games and hard-hitting marketing if the Redmond, Washington-based software giant is to succeed in the fiercely competitive video game market, which is dominated by Sony Corp (news - web sites). (6758.T) and Nintendo (news - web sites) Co. Ltd. (7974.OS) Brian O'Rourke, analyst with research firm Cahners In-Stat Group, said Microsoft's sheer marketing might and track record for product development bode well for Xbox, even though the company's near-term sales will equal only a fraction of the existing multiple-generations of Nintendo and Sony units. ``I think they will be successful, but the fact that they are a software company coming into a competitive hardware market, it will take them a while to find their way,'' he said. Despite the challenges, Microsoft's Gates, a Harvard drop-out who became the world's richest man, sees consumers warming up to Xbox. The appeal for Xbox, which is fitted with a DVD player and Internet connection, will come first as a pure game machine and eventually as a home entertainment center. ``The history of Microsoft is that we are willing to bet big on new things,'' Gates told Reuters Television on Thursday. ``We have put over $1 billion into the various aspects of this, and it's a business where we are going to have to sell a lot,'' he said. ``But we are in it because we believe in improving entertainment in the living room and we believe we can have products work together in a very rich way.'' After some uncertainty over how many Xbox units Microsoft would have available in the first lot for sale on Thursday, some analysts said it might have shipped more than the 600,000 it had originally targeted as a minimum-- a prospect most industry watchers had discounted. Investors, who have been bombarded with news of Xbox for a year, were unmoved on Thursday, trading Microsoft shares down 18 cents to $65.77 just before the close. Photos Reuters Photo MIDNIGHT LAUNCH IN TIMES SQUARE Game aficionados who thronged Times Square for the opening were highly enthusiastic. Eduardo Glucksman, 20, waited 16 hours from 8 a.m. EST on Wednesday morning to be the first to get the prized possession. Gates sold him the first console. ``I can't wait for it. I've been waiting a long time,'' said Glucksman, who plans to play his Xbox ``all night. All day. And nonstop until maybe Monday. Tuesday if I'm lucky.'' Right behind him was 15-year-old Ray Sanchez, who said with a smile, ``I'm going to have a great time playing it. It's going to be my priority.'' His mother, Mary, drove him in from New Jersey to be at the launch. ``He's spoiled and I like to make him happy. So I canceled four appointments today to bring him here, but he promised me he's going to school tomorrow,'' she said. ``I'm shocked. It was great. I got it signed by Bill Gates,'' said Sanchez. The Times Square launch included a tag-team event featuring Gates and World Wrestling Federation star Duane ``The Rock'' Johnson. Microsoft has purchased significant advertising time in World Wrestling Federation Entertainment's (Nasdaq:WWFE - news) television programming. Gates' appearance is one of the cornerstones in a $500 million nationwide marketing campaign targeting game players in the ages between 18 and 30. Sales of the Xbox and other competing consoles are expected to drive the best holiday season ever for the video game business, despite otherwise uninspiring economic conditions. Influential Morgan Stanley analyst Mary Meeker has suggested Microsoft could lose $1 billion on the Xbox by fiscal 2004 before breaking even, assuming the product sells well. Henry Blodget, the high-profile Internet analyst who said Thursday he would resign from Merrill Lynch to write a book, said a strong debut would not guarantee the long-term success of the Xbox, noting the failure of the Sega Dreamcast (news - web sites), which was ultimately scrapped after a similarly explosive launch. ``For the Xbox to succeed long-term, it will be critical for the product to appeal to the mass market in addition to the hard core,'' Blodget wrote in a research note. ``In our view, this issue will not be decided until Christmas 2002.''