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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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February 14, 2008 7:30 PM

PS3 outsells Xbox, but Wii beats both in January, and other notes on gaming

Posted by Benjamin J. Romano

NPD's January figures on the U.S. video game industry are in. Nintendo keeps its monthly sales lead and Sony can gloat about besting Microsoft for the first time in this generation, while Microsoft looks for excuses.

Here's the break down:
Nintendo Wii: 274,000 units
Sony PlayStation 3: 269,000
Microsoft Xbox 360: 230,000

Analysis, and some predictions about the future of the console market, after the jump. And tune-in next week for much more on video games. I'll be reporting from the Game Developers Conference in San Francisco.

Console sales were actually down from a year ago, which might be of note to economy watchers. But NPD analyst Anita Frazier pointed not to slackened demand, but possible supply hiccups.

"In unit sales on an equal-week basis, hardware sales are down less than 2% while the average retail price has fallen by 5% from last year. Given the huge number of hardware systems sold in December, inventory shortages could be the biggest contributor to the softer than expected sales," she wrote in notes released with the monthly data.

They were indeed a factor, according to Microsoft.

"Our retailers are telling us that Xbox 360 is selling as fast as they can restock, but due to this high demand, Xbox 360 is experiencing temporary shortages. We are working as quickly as we can to replenish inventory," according to a spokeswoman.

Meanwhile, here are a couple of interesting reports on the future, both near-term and a bit farther out, of the console biz.

First, the near-term: An iSuppli forecast today picks Sony's PlayStation 3 to be the fastest-growing console in 2008. See coverage from Reuters: "Worldwide sales of the PS3 are expected to be 10 million units this year, compared with 12.2 million units for Nintendo Co Ltd's Wii and 7.5 million units for Microsoft Corp's Xbox 360."

Looking farther out: Evan Wilson, senior research analyst covering entertainment at Pacific Crest Securities in Portland, thinks the successors to Microsoft's Xbox 360 will arrive in 2010 and Nintendo's follow-up to the Wii will "likely launch before then." That's according to a report on GameSpot. I called Wilson to talk more about this, but haven't heard back.

Sony expects its console to be in the market for 10 years and is packing it with more features to help compete for the pole position in the digital living room. BBC News blogger Darren Waters got to check out a new PS3 add-on that will turn the console into a personal video recorder.

It's called PlayTV and Waters says it's going to launch later this year. A spokesman told me that's just in Europe, but added, "you never know."

Here's Waters' description: "PlayTV is a small black box which connects to a USB port on the machine and has an aerial port in (and a pass through port) to pick up digital terrestrial signals." It's the software that's really interesting, he reports.

"It's a very slick piece of user interface design. The Electronic Programme Guide and menu systems are well designed and laid out and the whole experience is certainly simple enough that PlayTV could be used as a main Freeview system in the home.


"Just like a PVR, you can pause and rewind live TV, as well as record programmes. The PlayTV has a dual tuner so you can record one channel while watching another."

With its Blu-ray Disc player smacking down HD DVD, and this feature coming, the PS3 is looking like a more formidable multi-media competitor to the 360.

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Posted by Jerry

5:54 PM, Feb 19, 2008

Your blog topic causes me to once again consider some basic questions. Pardon me for my lack of knowledge of the video game industry, I am not a gamer. Xbox sales were running less than 30% of the market in January and are projected around 25% for the year

1. Why does a customer choose PS3 or Wii vs. Xbox?

2. Is there a brand trust factor here? In other words, do customers prefer Sony or Nintendo because they trust those companies more than MS?

3. Does MS have its collective fingers on the customersí pulse? Do they really understand the customer? As the owner of several Apple iPods and numerous Sony products, I believe that Apple and Sony are very aware of their customers.

4. Are more games available for PS3 and Wii than for Xbox?

5. MS has a habit of buying technology to increase market share and sometimes, because the competitorís technology is just plain better. For example, one only need look at their proposed acquisition of Yahoo, past acquisitions of Powerpoint, Visio, Ray Ozzieís Groove, Calista, aQuantive, Giant, Lookout, Great Plains, Hotmail, etc., ad infinitum. To increase market share, will MS make a play for Nintendo or Sonyís video game division?

6. Does MS need a larger market share to succeed, or is the Xbox niche (if there is such a thing) good enough to be successful and/or profitable? I guess this begs the question: why do you have to own the world?

7. Now, here are the questions I always ponder. Is it best to stick to that which you do best, rather than trying to be everything to everybody? Does trying to do everything divert and attenuate MSís attention to making their essential, core products better?

Thanks,

--Jerry

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