E3: LET THE VIDEO GAMES BEGIN

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NEW YORK (AdAge.com) -- This week marks a coming out party of sorts for Microsoft Corp.'s Xbox videogame console. All eyes are on the software
E3 kicks off this week in Los Angeles.
giant's foray into console gaming, as Sony, Nintendo and top game publishers gather in Los Angeles for the Electronic Entertainment Expo, or E3.

This week's interactive entertainment showcase promises more action and surprises for the $6 billion video-game industry than in recent years.

Xbox debut
For starters, the Xbox, which Microsoft previewed to the industry, press and analysts in January at the International Consumer Electronics Show, makes a more public splash. Microsoft will release details on pricing, launch date, retail plans, promotional partners and, of course, software titles exclusive to the Xbox. Gaming enthusiasts are eager to check out the software lineup and to experience the games firsthand. The game system's graphics and sound quality are said to have a cinematic, lifelike feel.

Industry insiders say Microsoft likely will match Sony's price for its PlayStation 2 at around $300. The company has signed at least one promotional partner, Taco Bell, but more are expected.

Meanwhile, Sony Computer Entertainment America will need to make some noise of its own if it doesn't want to be eclipsed by Microsoft. The company isn't standing idle, said Andrew House, vice president of marketing, who expects Sony's marketing spend for PS2 and PS1 to be comparable to Microsoft's spending in North America.

Microsoft has said it will spend $500 million globally to market its console for more than a year. Interpublic Group of Cos.' McCann-Erickson Worldwide, New York, handles the advertising duties.

Game Boy and GameCube
Nintendo will flog not one but two major product introductions at E3, the handheld Game Boy Advance, which has already hit retail stores, and the forthcoming GameCube console.

The company has its work cut out for it. GameCube will debut by October, the same time as Xbox, to rack up fourth-quarter holiday sales. Nintendo executives maintain that GameCube won't go after the same 16- to 26-year-old audience everyone else is targeting, but that the product will surely fight for its life as Sony and Microsoft battle for supremacy. Nintendo has traditionally been the favorite for the 12 and under set.

Pushing inventory
Sega, which earlier this year exited the console business, still has to sell its Dreamcast console, which executives say will funnel through the retail channel at least through Christmas.

The company is expected to make a series of announcements about the games it intends to publish. It recently entered a pact with Microsoft to publish several titles for the Xbox.

The interactive entertainment business is big business. According to the NPD Group, the $6 billion industry posted an 18% increase in sales of video-game hardware, software and accessories in the U.S. during the first quarter of 2001, compared with the same period last year.

Video-game consoles posted the biggest sales gain for the quarter, up 146% in dollar volume and 49% in unit sales. Analysts say price cuts by Sony on PS2 and Sega on Dreamcast helped accelerate growth in the console category.

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