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X-Box wants share of lucrative game console market

The video game war between Nintendo, Sega and Sony has another console combatant to contend with - Microsoft.

For months rumors have been rampant that Redmond, Wash.based Microsoft Corp. would enter the video game console market with something called the X-- Box. Earlier this month Microsoft chairman Bill Gates put those rumours to rest when he formally announced the X-Box at the annual Game Developers Conference in San Jose, Calif

"We're positioned to provide a high performance, creative medium that will inspire lots of developers to create great games," said Donna Hindson, home and retail marketing manager for Microsoft Canada. "The games area is a growing part of our Microsoft business, and with that comes the console business."

According to Jeremy Schwartz, senior analyst with Cambridge, Mass.-based Forrester Research Inc., the video game market raked in US$6.9 billion last year, which was just slightly less than the motion picture industry's take of US$7.2 billion.

"(Microsoft) is looking at companies like Sony who are poised to continue to own that (market) with Playstation 2 and that device has implications downstream for other kinds of entertainment within the home," continued Schwartz. "And you know Microsoft wants a piece of that."

According to Microsoft, the X-Box, which is scheduled to hit stores in the fall of 2001, will be three times quicker than any available console. The X-Box will also use DirectX graphics software, as well as have an Intel Pentium III processor, 64MB of RAM, 8GB hard drive, and a DVD drive with movie playback.

"The X-Box is designed to be the highest performance video game console on the market," said Hindson.

However, Schwartz said Microsoft is going to need more than a console if it wants to compete against the likes of Pokeman, Crash Bandicoot and Zelda.

"You have these big three companies (Sony, Nintendo, Sega) with very strong brands. Very strong franchised character properties like Pokeman and Mario (Bros.) and all these kinds of characters," added Schwartz. "Microsoft really doesn't have any kind of iconic property like that."

Even Microsoft admitted players choose their consoles based largely on the titles.

"Gamers are really faithful to the games, not necessarily the platform," conceded Hindson. "So it's not just the operating system, it's games people want. They're more faithful to the games, not the brand of their platform."

Hindson further noted titles designed for X-Box will be "whatever developers develop."

Titles like "Age of Empires" and "Combat Flight Simulator" have given Microsoft success in the PC game market; however, Schwartz said Microsoft's reputation does not guarantee them success in the console arena.

"Microsoft is a consumer platform. . . . that's not going to make them an automatic winner with the console game demographic," said Schwartz. "The whole gaming experience is different. Consoles are very fast-paced, twitch-- oriented. PC games tend to be more cerebral."

With so much of Microsoft's attention focused on the X-Box, does this mean PC garners will be left by the wayside? Hindson said no. Microsoft PC and console games will exist in harmony

"We're going to continue to develop excellent PC games, as we have in the past, and continue to grow that line of business," said Hindson. "There were 3.6 billion consoles in sales (last year) and 1.4 b lion for PC games. So you can really see that it's a huge area in terms of entertainment. . . . The X-Box and the PC compliment each other. The X-Box is designed for playing video games on TV in the living room and the PC is a multifunction device that enables customers to benefit (from an) array of applications, whether it's from playing Solitaire to doing a spreadsheet to creating a birthday card."

However, Schwartz views the situation as more complex.

"If so much focus within the company, both from a development and a marketing point of view, is directed toward this, one could see that it might sap attention from the consumer Windows product a year from now and may create issues with their PC manufacturing partners," he said.

"I can understand why they want to do this. Do I think it's the right thing for Microsoft to be doing? No. Probably not," continued Schwartz. "I see them fighting a losing battle."