Microsoft edges closer to Sony in cyber games

Eriko Amaha

TOKYO: Microsoft Corp on Tuesday took a step closer to arch rival Sony Corp

in the budding world of cyber video games, unveiling a 6,800 yen ($54.5)

plug-and-play starter kit for its Xbox game console in Japan.

The US software giant also said 39 game makers would offer a total of 47

titles for its online game service, "Xbox Live", set for a worldwide

launch this autumn. The starter kit covers the cost of subscription fees for the

first 12 months and a headset for chatting online while playing games over the

Web. Last month it said it would sell the kit for $49 in the United States.

"We bet on online gaming from the beginning, and our guess has been

correct," said Hirohisa Ohura, Microsoft Japan's managing director in

charge of Xbox operations. "Japan has seen the fastest growth in broadband

Internet connection services."

Microsoft faces tough competition from Sony, which launched its game service

in Japan in May and has already tied up with several Internet service providers

to connect its popular PlayStation 2 to broadband networks. Unlike Microsoft's

Xbox, which comes equipped with a broadband adapter, Sony's PlayStation requires

users to buy an additional hard-disk drive and adapter to go online.






Faced with a sizzling price war for game consoles on the home turf of Sony and
Nintendo Co Ltd., Microsoft is pinning its hopes on virtual gaming services to

stir up demand for its black box with a green "X" logo.

Budding market

Microsoft said it expects the number of broadband service users in Japan to

jump to six million from the current 4.5 million by the time its game service

kicks off.

But analysts at Merrill Lynch said Japan's broadband market is still in its

infancy and the service is unlikely to boost Xbox sales. "I don't see this

would make a significant contribution to Microsoft," said Merrill's Ken

Uryu.

Microsoft said it plans to spend $2 billion over the next five years to

promote Xbox and Xbox Live. At that time, the company said the starter kit would

cost $49 in the United States.

Microsoft said around half of Xbox users in Japan have broadband connections

at home, although it did not disclose how many Xboxes have been sold in Japan

since it debuted in February. Ohura reiterated that Microsoft aims to ship 3.5-4

million units globally by the end of June.

Many analysts are skeptical about whether online games will burst into the

mainstream, arguing that video game players will hesitate to pay a fee for

online games. While Sony and Microsoft have taken an aggressive stance on online

gaming, Nintendo has favored caution.

Nintendo president Satoru Iwata said last week that online games are not yet

ready to become a mainstream business. "It's something that has

possibilities for the future but we don't need to rush into it tomorrow,"

he told an analysts meeting last week.