MICROSOFT CORPS XBOX HAS LANDED
Copyright 2002 www.ft.com

[ March 14th 2002 ]

Hostilities in the great console war of 2002 will intensify on Wednesday night when Microsoft launches its Xbox in 16 European territories, Australia and New Zealand.

In London the event will be marked by Sir Richard Branson and Microsoft director Chris Lewis giving away the first console to the hardy soul who heads the queue of pre-booked customers outside the Virgin Megastore in Oxford Street. Perhaps Mr Branson's presence, rather than that of Bill Gates who turned up at a similar event in Japan is indicative of Microsoft's assessment of the relative toughness of each market.

The Redmond giant would not detail its hopes for early unit sales in the UK and Europe - although Mr Lewis assured the world "Microsoft is in this business for the long-term", which gives it a handy reference point if things do not go brilliantly. However, it would surely hope for something closer to its US launch - where it has sold 1.5m units since November - rather than the slower start it is believed to have had in Japan, and where some consoles caused damage to CDs.

Xbox arrives with a price tag of £299 ($423) that matches Microsoft's bold claims for the console. Such is the power within the box, Mr Lewis argues, as well as the hard disk and pre-prepared ethernet connection for online gaming, that punters will recognise it as a fair and competitive price point. For core gamers this is likely to be the case, but at £100 more than the PS2 currently sells at, it remains to be seen whether the Xbox can place Sony under pressure in the wider leisure market.

The chief executives of Europe's big three publishers - Infogrames, Ubisoft and Eidos - speaking at a Goldman Sachs technology conference in London reached that conclusion about the Xbox on Wednesday: great technology, but too expensive for now and price cuts will be needed if the console is to be competitive. Mr Lewis also has great faith in the 20 launch titles Microsoft has lined up, including the highly-regarded Halo, which one UK magazine gave an unprecedented 10 out of 10 rating.

There are some holes in the roster, however. It seems unfortunate to have no soccer title for a European audience, although that gap will be filled soon. Similarly, Michael Schumacher-worshipping Formula One fans will have to wait a little while longer for their game.

Having been in possession of an Xbox for a week now, Gameswatch can confirm some of the claims that have been made for it. The console - as befits a machine of its considerable bulk - feels a lot more powerful than anything that has come before it.

Halo, a space-aged first person shooter with a convoluted but interesting narrative, is a clever launch title as it fully illustrates the visual capability of the machine, delivering scenarios that look and feel more like a movie than a game. The game has sold more than 1m units in the US and deservedly looks set to become a classic.

The second game keeping Gameswatch up all night is Project Gotham Racing - a Gran Turismo style racing game in which the gamer earns points racing a real cars from Beetles to Porsches, through a variety of different races and challenges in four world cities. Not to put too fine a point on it, Gotham is superb, and the perfect showcase for how far developers have been able to unlock the speed of the box.

Scenes on the streets of San Francisco are breathtaking with the cars taking to the air as they hit the bumps on the way down the hills. Throughout the game users will see buildings and landmarks they recognise such as the London Eye, Central Park and Fishermans Wharf.

With Sony already so far ahead, unlocking dominance in the console sector will be an equally tough challenge, despite Microsoft's considerable marketing power, financial muscle and strategic nous. It has made a good start, with an excellent gamers' console providing a good foundation. But as ever in this business, the key to wealth and eternal happiness lies with the software, and in Microsoft's case its ability to get the best out of third party publishers.

Some of those companies are already developing the type of anti-competition paranoia that has soured Microsoft's relations with peers in other sectors. In his address to Cebit in Hanover this week, Steve Ballmer insisted the company was thinking hard about third party relations. He is right too. Xbox needs Harry Potter, Lara Croft and Fifa as much if not more than they need Xbox.