Microsoft Corp, maker of the money-losing Xbox video-game console, said it will upgrade its online gaming service and introduce a new program for playing music and viewing photos on the Xbox in a bid to boost sales.
Xbox Live, which lets more than 500,000 subscribers play each other over the Internet, will get added features for voice chat, setting up teams and paging a customer's cellphone, computer or hand-held organizer with invitations to join a game, said Robbie Bach, Microsoft's Xbox chief.
Microsoft, whose Xbox is being outsold by Sony Corp's PlayStation 2 at a rate of about six to one, is searching for ways to attract new customers and sell more products to current Xbox owners.
Microsoft also needs a hit game for the holiday season now that the sequel to its best-selling Xbox game has been postponed until next year.
"I don't think any of these specific new announcements will help with sales, except maybe some of the Xbox Live advances," said Matt Rosoff, an analyst at Directions on Microsoft, a Kirkland, Washington-based market research firm.
Microsoft said on Monday in a filing that it lost twice as much on its Xbox, games and home products business last quarter as it did in the same period a year earlier.
Microsoft lost US$190 million on sales of US$493 million in the quarter ended March 31, compared with a loss of US$97 million on sales of US$943 million.
Appearing before hundreds of video-game developers and enthusiasts who came to Los Angeles for the annual Electronic Entertainment Expo, Bach said he expects the game industry's sales to double in the next decade. US consumers already spend more on video games than they do at the cinema.
"There's the opportunity for explosive growth: to make interactive entertainment pervasive, on the order of music, movies and TV. And we can make that happen by expanding our audience," Bach said. "We can make that happen by expanding the definition of video- game entertainment."
Microsoft will show a new program called Music Mixer that lets customers use their Xbox to sing karaoke, play music and view photos stored on a personal computer.
Bach said he expects sales of the program to be slow this year, and the idea is mainly to show that Xbox can combine video, music and games.
"We are not expecting sales to be in the hundreds of thousands of units," he said.
The program will go on sale for Christmas and will cost US$40.