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Microsoft in video game market for long haul: Gates
By Lisa Baertlein
LOS ANGELES (Reuters) - Microsoft Corp. will not back down even if the
launch of its Xbox 360 video game console fails to propel it to first
place in the $25 billion global market, Chairman Bill Gates said on
Monday.
"We'll play again," Gates told Reuters in a telephone interview ahead
of the Xbox 360 launch on Tuesday.
Microsoft will be the first of the major gaming console makers to sell
a next-generation machine when the Xbox 360 goes on sale on Tuesday,
and aims to take the lead from Sony Corp.
"We learned a lot in the first round. We've got a chance not just to
have higher market share, but also to grow the size of this market
substantially," Gates said.
The Microsoft co-founder said the Xbox 360 will be better than the
next-generation PlayStation 3 console from Sony. Sony's PlayStation 2
is estimated to now control about 70 percent of the global market.
"In terms of how we've balanced technology in the machine, we feel
certain we've done a better job than Sony," he said.
"You won't really know that until a year from now, when people are
talking about how the games on our machines compare to the games on
Sony's machines," Gates said.
Microsoft says highlights of its new machine include high-definition
graphics, online game play and Web chat, as well as the ability to
connect to music players and cameras.
OBSTACLE COURSE
Microsoft entered the console market in 2001 and grabbed the No. 2
position despite significant handicaps. Sony's PlayStation 2 had a
one-year running start and consumers were skeptical that the maker of
the ubiquitous Windows software would do video games well or commit to
a new market.
"We had no chance of being No. 1 there," Gates said.
In almost five years, Microsoft has spent nearly $5 billion on the
Xbox, analysts estimate, making it one of Microsoft's biggest bets in
recent years.
In the latest quarter, Microsoft's home and entertainment division,
which includes the Xbox, had $634 million in revenue, up nearly 21
percent from a year earlier. The division posted an operating loss,
however, of $138 million.
"We're looking at, between now and the end of June, over $1.5 billion
in sales on this stuff," said Gates, referring to estimated sales of
around 5.5 million Xbox 360s, accessories and video games.
The Xbox 360 will be in stores before Sony's PlayStation 3 and Nintendo
Co Ltd.'s Revolution, which are both expected next year, leaving
Microsoft free of competition for several months.
SUCCESS NOT ABOUT MONEY NOW
While analysts underscored the importance of Microsoft's vast wealth
and stature, Gates said the battle is now about the games.
"It's not about spending at this point," he said, adding that the
company now must deliver on expectations that it will move gaming
forward.
There are significantly more launch titles for the Xbox 360, with 18
this time around, and over 200 additional games in development.
"Virtually all of those will ship in the next six months," said Gates.
The Xbox 360 is more powerful than its predecessor and shows games in
high-definition. Early reviewers have been wowed by the graphics, and
many gamers said they are willing to wait a year or so to see what game
developers can do with the new technology.
Gamers have also embraced the Xbox Live online service, which among
other things allows a team of players in one living room to compete
against an equally matched team elsewhere. The service also provides
downloads of classic games, which tend to appeal to older gamers and
women.
"Halo" from Microsoft-owned Bungie Studios sparked sales of the
original Xbox. When asked to identify a killer title for the Xbox 360,
Gates declined.
"I wouldn't have picked right last time if you had asked me that
question. So I won't pick this time," he said.
Microsoft in video game market for long haul: Gates
By Lisa Baertlein
LOS ANGELES (Reuters) - Microsoft Corp. will not back down even if the
launch of its Xbox 360 video game console fails to propel it to first
place in the $25 billion global market, Chairman Bill Gates said on
Monday.
"We'll play again," Gates told Reuters in a telephone interview ahead
of the Xbox 360 launch on Tuesday.
Microsoft will be the first of the major gaming console makers to sell
a next-generation machine when the Xbox 360 goes on sale on Tuesday,
and aims to take the lead from Sony Corp.
"We learned a lot in the first round. We've got a chance not just to
have higher market share, but also to grow the size of this market
substantially," Gates said.
The Microsoft co-founder said the Xbox 360 will be better than the
next-generation PlayStation 3 console from Sony. Sony's PlayStation 2
is estimated to now control about 70 percent of the global market.
"In terms of how we've balanced technology in the machine, we feel
certain we've done a better job than Sony," he said.
"You won't really know that until a year from now, when people are
talking about how the games on our machines compare to the games on
Sony's machines," Gates said.
Microsoft says highlights of its new machine include high-definition
graphics, online game play and Web chat, as well as the ability to
connect to music players and cameras.
OBSTACLE COURSE
Microsoft entered the console market in 2001 and grabbed the No. 2
position despite significant handicaps. Sony's PlayStation 2 had a
one-year running start and consumers were skeptical that the maker of
the ubiquitous Windows software would do video games well or commit to
a new market.
"We had no chance of being No. 1 there," Gates said.
In almost five years, Microsoft has spent nearly $5 billion on the
Xbox, analysts estimate, making it one of Microsoft's biggest bets in
recent years.
In the latest quarter, Microsoft's home and entertainment division,
which includes the Xbox, had $634 million in revenue, up nearly 21
percent from a year earlier. The division posted an operating loss,
however, of $138 million.
"We're looking at, between now and the end of June, over $1.5 billion
in sales on this stuff," said Gates, referring to estimated sales of
around 5.5 million Xbox 360s, accessories and video games.
The Xbox 360 will be in stores before Sony's PlayStation 3 and Nintendo
Co Ltd.'s Revolution, which are both expected next year, leaving
Microsoft free of competition for several months.
SUCCESS NOT ABOUT MONEY NOW
While analysts underscored the importance of Microsoft's vast wealth
and stature, Gates said the battle is now about the games.
"It's not about spending at this point," he said, adding that the
company now must deliver on expectations that it will move gaming
forward.
There are significantly more launch titles for the Xbox 360, with 18
this time around, and over 200 additional games in development.
"Virtually all of those will ship in the next six months," said Gates.
The Xbox 360 is more powerful than its predecessor and shows games in
high-definition. Early reviewers have been wowed by the graphics, and
many gamers said they are willing to wait a year or so to see what game
developers can do with the new technology.
Gamers have also embraced the Xbox Live online service, which among
other things allows a team of players in one living room to compete
against an equally matched team elsewhere. The service also provides
downloads of classic games, which tend to appeal to older gamers and
women.
"Halo" from Microsoft-owned Bungie Studios sparked sales of the
original Xbox. When asked to identify a killer title for the Xbox 360,
Gates declined.
"I wouldn't have picked right last time if you had asked me that
question. So I won't pick this time," he said.