Microsoft Takes Games Wireless - InformationWeek
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8/24/2006
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Microsoft Takes Games Wireless

Microsoft turns up the heat on the upcoming holiday game sales season, announcing a slew of games and wireless accessories.

Microsoft Corp. hopes going wireless will draw in consumers to its Xbox 360 system. As gaming console wars begin to heat up for the holidays, the company announced a slew of games and wireless accessories on Thursday.

Products include the Xbox Live Vision camera for online video chat, available in the United States on Sept. 19, and a racing wheel for driving video games.

The Xbox 360 Wireless Racing Wheel arrives in November. The controller, designed for racing games, will include force feedback to simulate bumpy roads.

Gamers also should see by the end of 2006, a wireless headset for voice, and a wireless receiver to let gamers use the devices on their computers running Windows.

PC gamers, who have been wondering if they've been overlooked, should sigh in relief with the new lineup of titles. By the time Windows Vista launches in 2007, games waiting will include "LEGO Star Wars II: The Original Trilogy" from LucasArts, and "Zoo Tycoon 2: Marine Mania" from Microsoft Game Studios.

Noticeably missing from today's announcement, mobile games for the cellular phone, an industry segment Lazard Capital Markets LLC expects to exceed $1.4 billion by 2010 in the United States. The equity research firm estimates the market should reach $510 million this year, up from $340 million in 2005.

"The mobile gaming market is still small compared with the overall business, but it's one of the fastest growing segments, similar to in-game advertising," said Colin Sebastian, senior research analyst at Lazard Capital Markets. "I would think Microsoft, with the Xbox Live service, would want to take part in this segment. It's a natural extension."

But gamers remain waiting. Microsoft announced earlier this year at Electronic Entertainment Expo (E3) that it would launch Live Anywhere, a service based on a network infrastructure that allows game players to communicate and interact with the Xbox 360, Windows Vista PCs, and Windows Mobile and Java-based mobile phones.

The service would allow communication between devices and share information among users similar to the way Xbox Live links Xbox 360 users.

"In theory, you'll be able to publish games and access them on a variety of handsets and consoles," said Daniel Ernst, analyst at Hudson Square Research-Soleil Securities. "There are still some outstanding issues that need to be resolved for the mobile game market to really take off."

Ernst said better collaboration between content owners and carriers is required, along with enhancements to the user interface on cellular phones from handset manufactures, such as Nokia, Motorola and Samsung.

Handset manufacturers are paying attention to the demand, however. Ernst notes some have adopted Nvidia Corp.'s graphic chip for 3G networks to give consumers a better gaming experience. "There about a billion or so people with mobile phones, and 150 million with game consoles," he said.

Leading the charge into the mobile game market is Electronic Arts Inc. with the acquisition of JAMDAT last year. The company remains one of the toughest competitors for mobile games in North America, analysts say.

Research from Telephia shows nearly 13.5 million wireless subscribers downloaded a mobile game, with average monthly revenues reaching $46.9 million between April and June 2006. EA Mobile led all game titles with a 5.1 percent share.

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