Microsoft Ready to Rumble in Video Games
May 16 -- The next big virtual slugfest in the land of video games won't be limited to brawls among cartoon figures — the $6 billion industry is bracing for a battle royal between industry giants. At stake? The title of "King of All Video Game Makers."
Software powerhouse Microsoft announced today at the Electronic Entertainment Expo, dubbed E3, in Los Angeles today that its long awaited Xbox game unit will hit retail stores in the U.S. on Nov. 8 for $299. The sub-$300 price tag matched industry analysts’ predictions for Microsoft’s first game hardware system. More importantly, it confirms that the Redmond, Wash.-based giant wants to be a main contender in an arena that has always been hotly contested — and littered with losers.
The reigning champion is consumer electronics giant Sony. Its PlayStation 2 console, introduced last October, dominates among 20-something males — the sweet spot of the video game market. More than 1.4 million units were sold last year, despite initial production problems that caused shortages in the United States during the vital year-end holiday season. According to market researcher IDC, Sony has already more than doubled unit shipments in the first quarter of this year.
Battle Plans and Goals
But Micrsoft plans to counter the PlayStation 2 leviathan with its own massive shipping and marketing plans.
The company has already committed $500 million — the most it has ever spent on launching a new product, ever — to marketing the Xbox unit during the first 18 months. It expects to have 600,000 to 800,000 units on store shelves by Nov. 8 and ship a total of 1 million to 1.5 millions units by the end of the 2001 holiday season.
That would be quite a feat since that late a launch date means Microsoft will have much less time to sell the Xboxes before the heavy holiday shopping period ends in December. But the company thinks it has the right stuff to deliver a shattering body blow to the Japanese electronics heavyweight.
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