Thu, May 23, 2013 - Page 15 News List

Microsoft unveils first new Xbox in eight years

ONE-STOP GADGET:The company refers to the new device as an entertainment system, signaling its focus on making the Xbox a window for entertainment content

Reuters, REDMOND, Washington

Members of the media take photographs and shoot video at the unveiling of Microsoft Corp’s first new Xbox in almost eight years in Redmond, Washington, on Tuesday. The Xbox One is set to go on sale later this year and will use voice commands and motion sensing to recognize users and allow them to switch between applications.

Photo: Bloomberg

Microsoft Corp unveiled the “Xbox One” on Tuesday, its first new gaming console in eight years, and its strongest push so far to dominate consumers’ living rooms with an array of exclusive media content.

The Xbox One took four years to develop and will be the launchpad for a Halo live-action video series produced by Steven Spielberg. It will be sold worldwide “later this year,” games unit chief Don Mattrick told reporters at an event at the software company’s campus near Seattle, without providing details on timing or pricing.

The device will also be the first platform to release the next installment in Activision Blizzard Inc’s blockbuster shooter franchise Call of Duty.

Microsoft hopes its third-generation Xbox console will attract video game fans who are increasingly sampling games on mobile devices, while also becoming a hub for living room entertainment.

The new device interacts with a television, responds to voice and gesture commands, includes group video calling on Skype, 15 exclusive game titles and original programming content.

The Xbox One will chiefly compete with Nintendo Co’s new Wii U and Sony Corp’s forthcoming PlayStation 4 for a bigger slice of the US$65 billion-a-year computer game market.

Microsoft did not refer to the new gadget as a “console” but rather an entertainment system, signaling its renewed focus on making the Xbox a sort of window for media and entertainment content, Forrester Research’s James McQuivey said.

The software giant is “trying to break out of the category” and risks having to battle not just Sony and Nintendo but Apple Inc, Google Inc and others to control consumer entertainment in the age of smart TVs, tablets and smartphones, he said.

The new console will also offer exclusive NFL content and eight new game franchises, executives said.

Yusuf Mehdi, senior vice president of Microsoft’s Interactive Entertainment Business declined to put a figure on the company’s investment in exclusive game and video content, but called it a “very serious commitment,” in an interview with Reuters.

Console gaming still accounts for the largest share, about 42 percent, of the US$65 billion world gaming market, according to Microsoft. However, playing games on smartphones and tablets is gaining ground.

Videogame publishers have moved toward integrating their games across consoles, PCs and mobile devices to keep gamers engaged. Microsoft said it will have an updated SmartGlass app that connects the Xbox One to tablets and smartphones.

Despite its strong brand and “cool” factor, the Xbox itself is not a key financial factor for the world’s largest software maker. Its Entertainment and Devices unit is set to break US$10 billion in sales for the first time this year, but that is half the sales of its Windows unit, and a lot less profitable, averaging less than 15 percent margin compared to 60 percent or higher for Windows or Office.

The company has more than 46 million users of its online gaming and digital entertainment service Xbox Live. That is still a fraction of the people who pay for its software. Microsoft’s stock closed down 0.7 percent at US$34.85.

“Xbox is not going to move the revenue needle but it might change the business model for the better as Microsoft tries to learn how to have the kind of relationship Xbox does” with consumers, McQuivey said.

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