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Ballmer says Microsoft can tackle Sony's games, DVDs

Microsoft Corp chief executive Steve Ballmer expressed confidence yesterday in his company's two-pronged challenge to Sony in the pivotal markets for videogame consoles and next-generation DVDs.

Microsoft is banking on its new Xbox 360 gaming device and the high definition DVD format backed by Toshiba to counter rival Sony Corp's hugely popular PlayStation lineup as well as its development of an alternative DVD format called Blu-ray.

Ballmer, in Tokyo to mark Microsoft's 20th year of business in Japan, said he is "100 percent" sure the new Xbox will outsell its predecessor and said the HD DVD format is superior to Blu-ray because it is more easily integrated with personal computers.

"I know for sure, 100 percent, we will do much, much better in Japan than we did with Xbox I, but that wouldn't be too hard," Ballmer said, adding that demand also seemed strong in northern Europe, the US and Australia.

Microsoft's Xbox 360 videogame counsel debuts in North America next Tuesday and in Japan on Dec. 10, aiming to please hardcore gamers -- primarily young men who spend hours each week tethered to a videogame console.

Despite the popularity of gaming in Japan, Microsoft has not been able to overcome the home-court advantage of Tokyo-based Sony's PlayStation franchise.

As of September, Microsoft had sold 21.9 million of the first-generation Xbox machines globally since introducing it three years ago, but only about 1.8 million of those were sold in Asia, including Japan.

Sony, by contrast, has sold about 91 million PlayStation 2 consoles worldwide over the last five years, 21 million of them in Asia. More than a 100 million of the original PlayStations have been sold worldwide.

To appeal to Japanese game fans, Microsoft has made more of a point this time of signing on designers popular in Japan to make games exclusively for Xbox 360, such as Final Fantasy XI.

Microsoft may benefit from a head-start on Sony, which releases its PlayStation 3 next spring.

Microsoft is also odds with Sony in the war to dominate the market for next-generation DVDs.

Microsoft is part of a consortium including chip maker Intel Corp that supports Toshiba's HD DVD, while Sony's Blu-ray format is backed by PC makers such as Apple Computer, Hewlett-Packard Co and Dell Inc.

Ballmer said HD DVD has advantages in integrating with PCs and that the company is working to make it compatible with Vista, Microsoft's first significant Windows upgrade since 2001.
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