Microsoft hires third company to build Xbox 360

SAN FRANCISCO: Microsoft Corp., which has used two companies to build its Xbox game console, said on Tuesday it is expanding that roster to three for its next-generation Xbox 360 due out later this year.

The software giant said Toronto-based Celestica Inc. will join Xbox manufacturers Flextronics International Ltd. and Wistron Inc..

Microsoft said Xbox 360 remains on track for a launch this holiday season in North America, Europe and Japan. It is widely believed Microsoft will release the product in November.

"With three contract manufacturers on board, we're poised to have the flexibility and efficiencies we need to keep up with the consumer demand," said Todd Holmdahl, corporate vice president of the Xbox Product Group.

Plants for each of the three companies building Microsoft's newest game console are located in the Pearl River Delta region in southern China.

A Celestica spokeswoman said the company will begin production of the device at its plants in early 2006.

Microsoft launched the first Xbox in 2001 with Flextronics as the sole contract manufacturer of the black and green units in Mexico and Hungary.

Xbox and rival PlayStation 2 from Sony Corp., have suffered supply shortages now and again. Both consoles were hard to find during the 2004 holiday season.

The Xbox shortages, which were fueled in part by blockbuster sales of Microsoft Game Studios' "Halo 2" game title, worsened in early 2005, but appear to have eased.

(Additional reporting by Jeffrey Hodgson in Toronto)