MS begins new game warfare with online network

Eriko Amaha

TOKYO: Microsoft Corp, which has built a software empire around its Windows

operating system, now aims to dominate the game market by creating an online

gaming network exclusive to its Xbox console.

Hirohisa Ohura, managing director of Microsoft's Japan subsidiary, said

in-built access to the Internet should give Xbox the edge over Sony Corp's

PlayStation 2, the world's leading game console, and Nintendo Inc's GameCube.

"We are drawing up a scheme to convince people that Xbox is the one, not

PlayStation or GameCube, when playing online games," Ohura said in an

interview with Reuters on Wednesday.

His remarks came in the wake of an announcement at the end of August that

Microsoft would delay the Japanese launch of Xbox to February 22 from a planned

debut late this year, although it is sticking to November 8 for the US launch.

The GameCube, meanwhile, is expected to hit shelves on September 14, in Japan

and November 18, in the United States.

As Microsoft will miss the key holiday season in Japan, the home turf of

electronic game giants Sony and Nintendo, analysts have questioned Xbox's

chances of winning over game players.

Ohura said the delay would have little impact on the company's business

strategy, adding that Xbox should woo many players with its Ethernet port for

broadband connection, Intel Corp's fast processing chip and an internal hard

drive with massive storage space.

Both PlayStation 2, which also boasts a fast processor and eye-popping

graphics, and GameCube need extra software, and outside modems to connect to the

Internet. Nintendo has not announced any specific plans to allow GameCube users

to access the Internet, and Sony has not revealed details of its broadband

network strategy in Japan.

In July, Sony started selling hard drives that store game information needed

for playing interactive online games. But the company said Japan's

infrastructure for broadband Internet access was not mature and it has not

provided modems.

Microsoft teams with NTT



Microsoft meanwhile is already taking steps to create an online game network
in Japan dedicated only to users of its game console, a square box featuring a

sporty green "X" logo. In March it formed an alliance with NTT

Communications Corp, the long-distance carrier of Japan's dominant

telecommunications firm, Nippon Telegraph and Telephone Corp

Microsoft will set up servers in the NTT Communications network and offer

online games using NTT's asymmetric dedicated subscriber line (ADSL) service,

which transmits data over the Internet at 10 to 100 times the speed of

conventional services.

Ohura said by building an exclusive network, Microsoft would provide Xbox

users with a stable connection and a gaming environment free from viruses.

"I always compare this with Disneyland. No matter when you visit or whoever

guides your tour, you always have the same environment," he said. Microsoft

has said the online service will likely start six months after the February

launch, but Ohura declined to give a specific date.

Price not made public



Xbox is set to cost $299 in the United States, but the company has not
announced the price for the Japanese market, where game consoles racked up 200

billion-yen ($1.66 billion) in sales last year.

Ohura said consumers will likely compare the eventual price of Xbox with the

combined price of PlayStation 2, sold at 35,000 yen, and its separate hard disk,

which is sold at around 18,000 yen. "We want to set a price that reflects

the performance of Xbox," he said.

Ohura also said the company would initially target hardcore game players in

Japan, who are more likely to adopt new games. "These are the influential

people for the rest of the game market, so from them, we would like to expand

our user base."

Microsoft said in August that about 70 software developers were working on

more than 130 software titles in Japan, and it expects between 12 and 20 of

those games to be released at the February launch of Xbox. Microsoft has said it

will spend $500 million to market the Xbox in its first year. Ohura declined to

say how much the company would spend in Japan but said the marketing would be

aggressive.

(C) Reuters Limited 2001.