Report From The E3 Expo


Five-Year Marketing Plan Detailed at E3

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Microsoft Xbox will only offer broadband access to online gaming.
Sony & Nintendo
Nintendo and Sony also unveiled the latest marketing strategies for their GameCube and PlayStation 2 online gaming systems at E3.

LOS ANGELES ( -- Microsoft Corp., signaling its apparent commitment to the Xbox video-game console, said Monday it will invest $2 billion during the next five years in the system and a new online gaming service in an effort to control living rooms.

Microsoft executives, speaking before a capacity crowd of game developers, analysts, retailers and the press at the E3: Electronic Entertainment Expo, offered details of its Xbox Live online gaming strategy and said 200 games would be available for the console.

Rebuilding existing games
Part of the $2 billion budget will go to fund continued developer, retailer and third-party publisher support for the Xbox console and games. For instance, game software publishers have to develop new versions of existing console games to work in the online mode.

Via Xbox Live, Microsoft will also be linking data centers globally, doing backend billing, support and hosting for its online gaming network.

10,000 gamers experimenting
The company said it expects to have 10,000 gamers experimenting with the online system by mid-summer, and that a fall launch of Xbox Live is planned for the U.S., Europe and Japan.

Microsoft, which has sold more than 3.5 million Xbox consoles since the product's launch last November, created the unit with online gaming in mind -- it has a built-in Ethernet port, modem and hard-drive. The company said at least half of all Xbox owners already have high-speed broadband


While Microsoft executives talked up the "always on" potential of Xbox Live, they didn't talk about the additonal fees involved beyond the $49.99 starter kit to get gamers into the network.
> $9.95 a month
International Data Corp.'s IDC anticipates that Microsoft will charge $9.95 a month for the service that allows gamers to simultaneously talk, play and download content and game updates.

> $40 - $50 game fee
On top of that, Microsoft is expected to charge $40 to $50 a pop to access some of the online games by subscription, to play in tournaments and to receive updates.

> $50, +/- broadband
Then there's the matter of having a broadband connection, which in most homes costs around $50 a month.

Internet access, which is considered crucial for the online experience.

J. Allard, general manager of Microsoft's Xbox division, referred to online game play using dial-up Internet connections as the equivalent of "sucking pizza through a straw."

Microsoft will make a Xbox Live starter kit available for $49.95, which includes a year's subscription to the network and a voice-controlled headset to enable live global chats.

New games, price cuts
On May 22, Microsoft kicks off the Xbox Title Blitz, a national promotion for 70 video games now available for the Xbox and a recent price cut for the console from $299 to $199 (Sony Computer Entertainment America also has cut the PlayStation 2 price to $199 and Nintendo of America cut the GameCube price from $199 to $149). Microsoft was roundly criticized last year for not having enough games for the Xbox -- only 20 titles last Christmas -- and no real break-out hits, except for the turbo-charged combat game "Halo."

Microsoft says it will have 200 games available by this holiday for the Xbox and it showed previews, like one would find at the movies, of those titles.

Three Xbox exclusives set for release this fall are Artoon's "Blinx, the Time Sweeper"; Bioware's "Knights of the Old Republic," an extension of the Star Wars franchise; and Sega Smilebit studio's "Panza, Dragoon Orta." Other forthcoming titles include those in the role-playing

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genre and games based on popular franchises like Superman and "Buffy the Vampire Slayer." "Splinter Cell," a game based on a Tom Clancy novel, is due next year.

Receiving the most applause however, was "Dead or Alive," which featured footage of bikini-clad buxom babes playing beach volleyball, a match that was destined to turn violent.

Microsoft said software developers have committed to making 50 games for the Xbox Live network by the end of 2003.

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