Microsoft unveils new Xbox 360, takes aim at Sony

[Maxman]

SEATTLE (Reuters) - Microsoft Corp. unveiled its new Xbox 360 on Thursday, taking aim at Sony Corp (SNE.N). in the video game console market with a machine sporting high-definition graphics and features that make it an entertainment hub for the living room.

The world's largest software maker said its second generation Xbox will be on U.S. store shelves well in time for the 2005 holiday season that begins in late November, but it did not say how much the white-and-silver concave console would cost.

Among the features are three IBM microprocessors that are expected to deliver powerful computing and advanced graphics, as well as a detachable 20-gigabyte hard drive and the ability to customize the machine's front panel with detachable face-plates.

Microsoft's Xbox business is arguably the Redmond, Washington company's biggest bet, costing the software giant more than $1 billion in sunk costs every year since 2001.

Microsoft, with deep pockets and a reputation for persistently chipping away at competitors, has Sony squarely in its sights at a time when the Japanese consumer electronics maker is struggling with a top-level management overhaul and weak profitability.

Microsoft narrowly beat its closest competitor, Nintendo Co. Ltd., with the Xbox.

The smaller Xbox 360 is a departure from the original squarish black Xbox that debuted in late 2001, and is aimed at a wider audience, said J. Allard, Microsoft's vice president leading the charge behind Microsoft's push into the business.

Allard said Microsoft learned from its mistakes with the first Xbox, which launched a year behind its main rival, Sony's PlayStation 2 console.

Allard acknowledged, "We didn't get the controller right, we didn't get the industrial design right," referring to the original oversized Xbox controller and hardware that scratched DVD disks, generating customer complaints.

For the latest round, Microsoft hired U.S. and Japanese design firms to design a machine with smoother, more fluid lines to attract customers drawn to the iPod and Sony's products.

EYE CANDY

Microsoft unveiled the Xbox on MTV nearly a week before the start of the $10 billion gaming industry's annual Electronic Entertainment Expo, or E3.

Despite all the multimedia features, however, the Xbox 360 will also have to be "first and foremost a good game system," said Robert Enderle of the Enderle Group.

Peter Moore, Microsoft's vice president in charge of Xbox marketing, said the Xbox 360 will be "gorgeous visually," thanks to upgraded graphics chips and full support for high-definition television displays.

Moore did not say how many launch titles Microsoft would have for Xbox 360, a key factor in driving early sales of the console.

In early game demonstrations, graphics quality has been boosted to the point where individual blades of grass are visible on moving landscapes while armies of monsters can be programmed to act individually or as a group.

For the internal gaming hardware, Microsoft replaced Intel Corp.'s central processor from the first Xbox with new PowerPC-based chips made by International Business Machines Corp., similar to the chips used by Apple Computer Inc.'s Macintosh personal computers.

Microsoft also swapped out the graphics chips, a key gaming system component, for chips made by ATI Technologies Inc. instead of Nvidia Corp..

Sony's PlayStation 3, expected to be launched in 2006, will feature an ambitious, advanced microprocessor called "cell" that is expected to power more realistic and advanced games.

Microsoft said it would extend its lead over Sony in the online gaming arena by introducing a two-tiered Xbox Live system for its new console.

By offering a free service, in addition to its current subscription service, Microsoft said it expected to have more than half of Xbox 360 gamers connected via the Internet, playing games and communicating together.

Another unresolved issue is whether Xbox 360 will be able to play games made for the older console, a tricky task because of the radical redesign. Microsoft did not say whether the new console would be backward-compatible.

[Maxman]

A few thoughts....

1. Microsoft totally screwed up the first time around on the controller design. They were huge and clumsy. I can't believe it actually went to market like that.

2. They have to make these games backwards compatible. Microsoft loves to bleed you dry but that would be insanity.

3. Kind of ironic that MS is offering some sort of free online gaming service at the same time that Sony announces it is going to start charging with the release of their next console.

[Maxman]

[Maxman]

Xbox 360 makes its debut

Next generation system will feature wireless controllers, multimedia functionality, new online plans

May 13, 2005: 5:13 PM EDT

By Chris Morris, CNN/Money

CNN's Andy Serwer talks about the new Xbox 360 and Bill Gates' comments on cell phones overtaking iPods as the portable music players of choice.

NEW YORK (CNN/Money) - After months of teases, hints and leaks, Microsoft has finally --officially -- unveiled its next generation video game machine.

The Xbox 360 will go on sale during the 2005 holiday season in North America, Europe and Japan, offering high-definition graphics, multimedia functionality and a dramatically different online plan. Despite a rumored November launch date, though, Microsoft declined to give a specific launch date or price -- and added it would not reveal those at next week's E3 video game trade show, either.

The 360 will pack a powerful technological punch, with an advanced IBM Power-PC processor and next generation ATI graphics chip. The machine will once again feature a hard drive for users to store saved games, music and more. This time, the drive will be 20GB (versus the current 8GB drive on the Xbox). It will also be detachable, allowing users to take their data to friends' houses, and upgradable.

The system will support both wired and wireless controllers -- and comes wi-fi ready, allowing users to connect wirelessly to the Internet. (A traditional Ethernet port is also built-in.)

As previously announced, all Xbox 360 games will be formatted for high definition televisions, with a 16:9 widescreen format, 720p or 1080i resolutions and multichannel surround sound. Games will play on standard televisions as well.

While the focus of the Xbox 360 is undeniably games, the system will encompass many multi-media functions as well. The machine will double as a progressive scan DVD player. Users will also be able to rip their CDs directly to the machine's hard drive.

But the real multimedia functionality ties in with the 360's wireless capabilities. The machine will automatically connect and stream digital media -- including video and digital pictures -- stored on any PC running Windows XP.

"I think people want to say it's the Trojan horse or the hub of the home," said J Allard, Microsoft corporate vice president and chief XNA architect. "It's not. Xbox 360 is a digital amplifier. You're not going to put all of your music on 360, you're going to do it on your PC. What I do think is you want to enjoy your music in your home theater and we want to enable that through this device."

The multimedia functions of Xbox 360 can be accessed via the game controller or a remote control, which will be sold separately.

As expected, broadband online connections will play a significant role in the future of Xbox. (Once again, users with dial-up Internet access will not be able to utilize the system's online capabilitites.)

Xbox 360 will offer a multi-tiered system for its Live component. One of those tiers will be free.

Members of the free tier, dubbed Xbox Live Silver, will have access to the system's online community function, allowing them to chat with other players and freely download game demos. They will not be able to play games with others except during occasional 'free preview' opportunities (much like those that cable movie channels sometimes offer).

Xbox Live Gold members will pay an as-yet undetermined annual or monthly fee to play with or against others. Current Xbox Live members, who currently pay $50 per year, will be able to keep their online nicknames.

"If we get half or two-thirds of all the Xbox 360s out there connected to the Internet, that would be a good thing," said Allard.

Microsoft (Research) will also showcase the Xbox 360's personalization features in the weeks following launch. Users can create their own background "skin" for the system interface as well as customize the look of the hardware. Faceplates for the Xbox 360 will be interchangeable, allowing all forms of user customization.

"We'll be showing five or six (faceplates) at E3," said Allard. "We'll have 10 or so at launch. And that number will be in the hundreds within a year or so."

Microsoft has sold 20 million Xboxes since the console's introduction in 2001. The machine has outsold Nintendo's GameCube console and has seen its momentum grow dramatically as it gets more mature. Despite its successes, the Xbox is merely an also-ran when compared to sales of Sony's (Research) PlayStation 2, which launched a year earlier and has sold nearly 87 million units.

By being first to market in the next generation, Microsoft hopes to reverse its market position with Sony and take a leadership role in the industry.

[Rob D]

After my experience with the xbox, I think I will wait a few months after release before deciding whether to buy the xbox 360 or the PS3. I paid

[Panzer Division Marduk]

I'm happy enough with my PS2, it'll do for another couple of years, then in all probability, go with PS3.