Posted on: Thursday, May 17, 2001

Microsoft's Xbox ready to enter video game wars

Bloomberg News Service

LOS ANGELES — Microsoft Corp. will start selling its Xbox video-game console in the United States Nov. 8 for $299, taking on more established rivals Sony Corp. and Nintendo Co. in a $20 billion market.

Microsoft plans to deliver 600,000 to 800,000 Xbox units on the first day the device is on sale, and a total of 1 million to 1.5 million by the end of the year, said Senior Vice President Robbie Bach.

Fifteen to 20 games for Xbox will go on sale the first day, he said.

Xbox is Microsoft's bid to break into the video-game market and gain sales from devices unrelated to personal computers.

Some analysts had expected Xbox to cost $249 because Sony's PlayStation 2, introduced Oct. 26, is $299. If Microsoft meets its targets, the company will have sold more devices than Sony's estimated 400,000 units in PlayStation 2's first two months on sale.

Analysts said Microsoft is planning to spend $500 million on marketing its consoles, more than it spent promoting Windows 95.

"If you're Microsoft, all you really want to do is get more quantity than Sony out there," said James Lin, an analyst with Jefferies & Co.

Sony last year sold fewer PlayStation 2 units than expected because of problems making the device.

Microsoft's planned introduction date is within the range of forecasts from analysts, who had expected Xbox to go on sale between mid-October and early November. The company plans to announce the dates Xbox will be available in Japan and Europe later this year, Bach said.