May 13, 2005
In Console Wars, Xbox Is Latest to Rearm By MICHEL MARRIOTT NY Times
http://www.nytimes.com/2005/05/13/technology/13xbox.html?pagewanted=print&position=
Looking for an advantage in the next round of the video-console wars, Microsoft has made the first move.
Three and a half years after it entered the console market with the Xbox, Microsoft yesterday unveiled its successor, the Xbox 360, a creamy white console that is to go on sale in North America, Europe and Japan by the holiday season.
Though noticeably smaller than its squat black predecessor, the console houses three 3.2-gigahertz I.B.M. microprocessors that could qualify it as the most powerful home computer on the market.
Indeed, unlike the original Xbox, the new console can act as a home entertainment hub, streaming pictures, music and video from digital cameras, portable music players and computers that run Microsoft Windows XP.
Most evidently different, Xbox 360, which Microsoft introduced last night in a 30-minute presentation on MTV, is designed to display games in wide-screen, high-definition format as well as in standard definition.
Microsoft's move, after years of secrecy, rumors and fragmentary disclosures, comes as its competitors - Sony, the undisputed industry leader, and Nintendo, a close third worldwide - are also preparing presentations of their coming consoles for the Electronic Entertainment Expo, a major industry trade show, in Los Angeles next week.
Representatives of those companies said their game systems, Sony's PlayStation 3 and Nintendo's, which is code-named Revolution, are set for release next year.
For the game industry, with $10 billion a year in sales in the United States alone, the consoles' arrivals will not only give rise to new demand for game hardware but will set off a new wave of game development and purchases. As the consoles put new emphasis on high-definition video, they may stimulate TV sales as well.
One analyst, describing the anticipation surrounding the announcements, said it was as if Detroit released a new line of automobiles only once every four or five years. "The business is getting bigger, the stakes are getting higher, and there is such a big leap in technology, potentially making the games ever more realistic and involving," said Anita Frazier, entertainment industry analyst for NPD Funworld.
Microsoft did not disclose the pricing of its new console. Since their introductions, the current Xbox and Sony's PlayStation 2 have dropped in price from $300 to $150 in the United States; Nintendo's GameCube, originally $200, is now $100.
When Xbox arrived in 2001, it was heralded as the most powerful of the consoles and had innovations including a built-in hard drive and an Ethernet port for online play.
The machine's biggest hits have been the Halo games, published by Microsoft itself; Halo 2, released last fall, has sold 6.3 million copies. Xbox has also developed a following among game developers, who have been drawn to its power.
Still, even with 20 million consoles sold, Xbox has been far outdistanced by Sony's PlayStation 2, with sales of 80 million and 70 percent of the world market.
While Halo 2's success put Microsoft's games unit in the black for one quarter last year, the Xbox effort has yet to provide sustained profitability.
"Xbox 1 was very much ready, fire, aim," said J Allard, corporate vice president at Microsoft and a leading architect of the Xbox effort. "We had 19 months and a day between the day we approved the project to the day we were on store shelves."
For the new Xbox project, Mr. Allard said his team had twice that time and aimed at conceiving a "magical product" that was so well integrated it would seem the creation of a single mind.
In sheer computing power, the new Xbox is capable of a trillion calculations per second, many orders of magnitude above the original Xbox. (The current box depends mainly on a 733-megahertz processor.) The heat generated by all that power will be drawn off by a water-based cooling system, something usually seen only in high-end PC's.
It will also include a redesigned wireless game controller. A Web camera, code-named Cyclops, and a TV-like remote control will be optional.
Peter Moore, a Microsoft corporate vice president for worldwide sales and marketing, said Xbox 360 would be especially suited for wide-screen high-definition television and Digital Dolby 5.1 multichannel sound, a requirement for all Xbox 360 games.
He added that the new console would also be more seamlessly integrated with Xbox Live, the service that connects games and gamers over high-speed Internet connections for multiplayer action. Xbox Live, which has 1.4 million subscribers, will include a new tier that waives the $6 monthly fee.
A demonstration of the console's power delivered stunningly realistic scenes that were indistinguishable at some points from live-action video.
"We have to continue to feed that core audience," Robert J. Bach, senior vice president and chief Xbox officer at Microsoft, said of the most ardent gamers. "But part of the challenge of this next generation is how do we cultivate a broader mass audience."
Part of that strategy, he said, includes designing Xbox 360 to perform a range of nongaming functions suited to the living room, like streaming digital music and pictures, or videoconferencing.
In addition to playing DVD's, as the current Xbox does, it can rip songs from CD's onto a 20-gigabyte hard drive - a hard drive that can be removed, upgraded and interchanged with other 360 consoles.
Judging by dozens of Web sites dedicated to interest in next-generation consoles, expectations are soaring that Xbox 360's competitors will also provide vastly improved graphics, sound and game playing.
For example, it is widely believed that Sony's PlayStation 3, which will use a new cell processor technology, will be the most powerful. Molly Smith, a Sony spokeswoman, would not discuss hardware specifics of the PlayStation 3. But she did say that it would be able to deliver "a quantum leap" in gaming and electronic entertainment.
Nintendo, struggling to shed an image that its technologies mostly appeal to children, is preparing to deliver a game console that is radically different from the cute and cuddly GameCube.
Perrin Kaplan, Nintendo's vice president for corporate affairs, said GameCube's successor would be "very, very sleek." She described it as horizontal and no taller than a stack of three DVD cases.
Unlike GameCube, the new system will play DVD's, Ms. Kaplin said, and will feature a wireless controller. It will play GameCube games as well as a new class of high-definition games, with new emphasis on online play.
Microsoft would not say whether games for the current Xbox would play on Xbox 360. Some industry analysts and game developers said it was likely that games for all three consoles would increase to $60 or $65; the typical price for premium titles on the current machines is $50.
"Over all, the introduction of the next-generation systems will have a very positive impact on the video game industry," said Will Kassoy, vice president for global brand management at Activision, a game publisher. "They will expand the user base and grow software sales."
Historically, he said, each new cycle of consoles has ushered in a 30 percent rise in the number of players. "We believe this next generation will see similar growth," Mr. Kassoy said.
Activision is scheduled to have four games for Xbox 360 at the start, including some of the company's best-selling series - Tony Hawk, Call to Duty and Quake.
Simon Jeffery, president of Sega, said his company would have two titles for Xbox 360 for the holiday season - Condemned: Criminal Origins and Full Auto - emphasizing that they will take advantage of the new console's increased power.
"Every successive jump in technology affords new elements of games," he said. "We now will have processing power to do things we haven't been able to do before."
================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 antunes at uh dot edu
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