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Microsoft launches new battle in console wars

Posted by iTech - 2005-11-24

US software giant Microsoft was elated after seeing its new Xbox 360 computer games console fly off store shelves across North America and fetch jaw-dropping sums in online auctions.

Queues of hundreds of people were reported at US branches of electronics chains for the midnight launch of a machine that Microsoft hopes will take the console wars to its Japanese arch-rivals Sony and Nintendo.

By Tuesday evening, the Best Buy and Wal-Mart chains were displaying the "sold out" sign on their online shops after what industry insiders said was a move by Microsoft to keep shipments low and hype high.

"I think we've created an incredible piece of hardware," Peter Moore, head of Xbox marketing, said in an interview with the www.Gamespot.com site at the official launch party inside an aircraft hangar in the Mojave Desert.

"Demand is clearly outstripping supply from the get-go. But our goal is to get as many consoles as fast as we can into the hands of gamers," he said.

The Mojave hangar was turned into a giant branch of the Best Buy store chain for the launch event, which attracted 2,000 invited game fans and hundreds more who were uninvited.

Oscar Gomez, standing in line at EB Games in San Francisco, was not deterred from the Xbox mania by the fact that he works for Sony.

"You can't be a true gamer unless you play everything," the 23-year-old PlayStation store clerk told CNETnews.com.

"Besides, I'm only getting this to hold me over until PS3 (the PlayStation 3) comes out next spring," he said.

Unlike with its first foray into the competitive world of games hardware, Microsoft is stealing a march on Sony and Nintendo by releasing the most powerful console yet well in time for the Christmas rush.

Neither Sony's PlayStation3 nor the Nintendo Revolution is due to go on sale until next year, giving Microsoft the head-start that it failed to achieve with its first Xbox, which came out in 2001 a full year after the PlayStation2.

The Xbox division has never made a profit, but Microsoft says it has learned a trick or two to ensure that the sleek, silver Xbox 360 has already become the must-have gadget for this year's holiday season.

This time, the software giant has partnered up with all the industry's leading games developers -- including Electronic Arts, Activision and Ubisoft -- to launch the Xbox 360 with 18 titles.

"The first time around was like a trial run for us," said David Hufford, director of Xbox product management at Microsoft.

"It was great to get the experience of making a box. But this is really what we had our eyes set on five years ago when we dreamed up the first Xbox on a cocktail napkin."

From launch to the end of February, Microsoft hopes to shift three million units of the console and 5.5 million by the end of July.

The Xbox 360 is scheduled to come out in Europe on December 2 and Japan on December 10.

It comes equipped with a DVD player capable also of handling CDs and digital photographs through a built-in Windows Media Center -- the same bundle of applications found in Microsoft's Windows XP operating system for PCs.

Microsoft is setting great store by the new console's hook-up to the "Xbox Live" subscription service, which it says will allow fans' gaming experience to evolve once they have exhausted a title's potential.

Xbox 360s retail in the United States for 299 or 399 dollars, depending on the configuration.

But by Tuesday evening, more than 10,000 box-fresh units had been listed on the eBay auction website and were changing hands at an average of 660 dollars each, eBay spokesman Hani Durzy said. Some bidders were offering thousands.

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