Microsoft To Focus On Online Support For Xbox - InformationWeek
IoT
IoT
News
News
4/23/2002
03:35 PM
50%
50%
RELATED EVENTS
[Dark Reading Crash Course] Finding & Fixing Application Security Vulnerabilitie
Sep 14, 2017
Hear from a top applications security expert as he discusses key practices for scanning and securi ...Read More>>

Microsoft To Focus On Online Support For Xbox

The company plans to be on the forefront in building games with online support and selling services for those games, as well as helping third-party game developers add similar capabilities.

Despite slashing forecasts for Xbox sales, Microsoft said Tuesday the video-game console had achieved a sufficient market position to do well against competitors in the future, with the company making a major push in online gaming. In a meeting with analysts in New York, Robbie Bach, senior VP of Microsoft's game division, said nearly every Xbox game will eventually let players compete online. "Just like in the last video cycle, you had to move from 2-D graphics to 3-D graphics, we think people will move from no online support to online support being a requirement for everything but a very few games," Bach said.

Microsoft plans to be on the forefront in building games with online support and selling services for those games, as well as helping third-party game developers add similar capabilities. Microsoft and competitor Sony Corp., which makes PlayStation, plan to launch gaming networks by the end of the year. Capabilities initially will include online tournaments among multiple players and real-time chat, eventually expanding to offering music and movies to the consoles.

Microsoft will offer online gaming as a subscription service, with everything the customer needs to sign up contained in the game itself, Bach says. All the customer will need is a broadband connection. "Everything you need will come with the game," Bach says. "From a business-model perspective, we think of this as a subscription service." Because games won't be downloaded, retailers will continue to play an important part in distributing games.

Last week, Microsoft cut forecasts for sales this fiscal year ending June 30 to 3.5 million to 4 million consoles, from 4.5 million to 6 million. Nevertheless, it projects the number of consoles sold will increase to between 9 million and 11 million worldwide by the end of fiscal 2003. Microsoft has about 900 software writers dedicated to Xbox and PC games and says it will spend $500 million from the time of the console's launch late last year through this year's holiday season promoting its games. While Microsoft, a newcomer to video games, expects steady progress against Sony and Nintendo Co.'s GameCube next year, the company believes it will take five years to become a dominant player. "This will be a five-year build," Bach says. "This is not the type of thing that will happen overnight."

One area in which Microsoft has stumbled this year is overseas. The company was forced to cut prices in Europe by 38%, to $267, to stimulate demand. Sales have been particularly disappointing in Japan, where Sony dominates. Bach attributed slow sales in Japan to the time it takes to build relationships with developers, a process that's quicker in the United States and Europe. "It takes time to get to know the people and build the relationships," Bach says. To try to boost sales, the company plans to build games specific to the market.

Earlier, Microsoft said Seamus Blackley, one of the chief architects of Xbox, is leaving the company by the end of the week to start a game-development company, which he plans to unveil next month at the annual video-game convention in Los Angeles. "It doesn't have any impact on the way we're doing business or on our relationships" with developers, Bach said of the resignation.

Although Microsoft loses money on every Xbox it sells, the console has opened up the $20 billion global video-game industry to the company. Microsoft hopes Xbox will eventually offset slower growth in Windows and Office by giving the company an entry into people's living rooms to offer services for music, photos, video and television. However, Xbox is not expected to help the company's bottom line until fiscal 2004.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Video
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll