Newspaper article The Evening Standard (London, England)

Microsoft's Xbox Lags in Video Games Race

Newspaper article The Evening Standard (London, England)

Microsoft's Xbox Lags in Video Games Race

Article excerpt

Byline: RAY HEATH

VIDEO game players can expect to enjoy the spectacle of a real-life price war in the near future as the major console makers battle it out for market share.

Slow global sales of Microsoft's Xbox since it was launched in November have prompted industry analysts to predict that price slashing is on the way.

When the much-telegraphed box hit US stores it was fighting against two well-established rivals, Sony and Nintendo. Sony had been first mover, bringing its PlayStation 2 console out a year before the Xbox and it had built up a loyal following of gamesters.

Nintendo also had its Gamecube on the shelves and it came with a reputation established by the veteran Gameboy of Mario Brothers fame.

The struggle for dominance will be long, hard and hyped up, for games is expected to be one of the key growth areas for hardware and software manufacturers.

Last week, market research firm DataMonitor estimated that total sales of game products will top [pound]15 billion by 2004, compared with [pound]11.7 billion last year. Even for a company the size of Bill Gates's Microsoft, that is a total worth chasing but, unlike its software business, it is not the dominant player with virtual market control.

Reports of poor Xbox sales are pouring in from around the globe.

Figures published last week showed that in the key Japanese market the Xbox was trailing dismally behind the much-cheaper PS2, having sold only 4300 units against Sony's 100,000 and Nintendo's 25,000.

That low figure suggests demand has dived steeply after it was reported to have sold up to 123,000 units in the first three days of the February launch in Japan.

In Australia the PS2 is outselling the Xbox two to one, although Microsoft claims that it is on track to sell 100,000 machines in three months.

Sales in Britain and Europe have been poor, say analysts, and they expect Microsoft to have to cut its price from the current [pound]299 to compete with the [pound]199 PS2 if it is to have any chance of grabbing significant market share. …

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