Sony, MS to battle for local game market

By Paul Vecchiatto for Microsoft
Cape Town, 10 May 2006

A day after Sony announced it will release its PlayStation 3 gaming console in November, Microsoft says it will begin distributing its Xbox 360 consoles in several new markets, including SA.

A Microsoft statement released today says it "will launch Xbox 360, the next-generation video games and entertainment system, in SA and four countries in Eastern Europe. With these launches, Xbox 360 will expand its presence in the Europe, Middle East and Africa (EMEA) region from16 countries to 21."

According to the Microsoft statement, by the end of 2006, Xbox will have expanded its global footprint.

Chris Lewis, regional VP for EMEA at Microsoft`s Home and Entertainment Division, made the announcement at the Electronic Entertainment Expo, the annual conference for the interactive entertainment industry, held in Los Angeles.

"These are growing markets for console and Windows gaming - gamers in these markets have been craving Xbox 360, publishers are already marketing their games here, and we have great relationships with key retail partners in these regions already," he said.

Local launch

Microsoft SA says it expects to announce the launch date of Xbox in SA towards the end of the last quarter of this year. It has yet to determine the distributors, or through which retailers the consoles and games will be sold.

The company says it will bring in about 100 gaming titles. Final pricing for games and the Xbox 360 and Xbox 360 Core consoles has yet to be finalised, it adds.

"We believe the Xbox 360 provides consumers with the affordable first step to enter the digital entertainment lifestyle," says Microsoft SA.

A local market observer says Microsoft`s Xbox market announcement, which has been expected for some time, seems to have been spurred by Sony outlining the launch dates and prices for its PlayStation 3.

The PlayStation is distributed in SA through film and entertainment group Ster-Kinekor.

Huge loyalty

"The real driver for the gaming consoles is if they are able to secure the popular titles," says Stephan Rabe, MD of electronics distributor Reviva. "While some gamers show huge loyalty to a particular brand, most seem to go to the console that has the popular titles."

Rabe says the new Sony product seems to offer more advanced technology than the current version of Xbox.

"It is the old technology story of one-upmanship in the market. One competitor launches a product and then 10 months later the rival launches a more advanced version," he says.

Analysis of Microsoft`s latest quarterly results show sales of Xbox 360 surged in the past three months, but the gain came with higher costs.

A Reuters report quotes Microsoft as saying it wanted to increase the machine`s user base before rival Sony introduces its PlayStation 3 console later this year.

The US software giant lifted the bottom of the Xbox 360 sales target range for the year ending 30 June to 5 million to 5.5 million units from an earlier range of 4.5 million to 5.5 million.

The new Windows and Office, along with the Xbox 360, are central to Microsoft`s efforts to revive a stock that has underperformed every major index since the start of 2002, the Reuters report says.