MIcrosoft Explores New TerritoryDeep in the wine cellar of the Hotel de Paris in Monte Carlo one evening last month, two dozen of Europes top video game publishers, along with some American rivals, gathered to toast the Xbox, the newest machine that will run their games. Surrounded by Napoleonic vintages, they dined at the invitation of the games creator, the Microsoft Corporation, which stands little chance of succeeding in the $20 billion market without their games to propel sales.
One American, Sherry McKenna, who had migrated from the film business to Oddworld Inhabitants, a small development studio in California, typified what they had at stake. Oddworld had scrapped plans to make its next game for Sonys PlayStation2 in favor of the Xbox, tying its future to Microsofts success in video games. She has doubts, though, about Microsofts marketing approach.
The Xbox, which goes on sale in North America on Nov. 15, backed by a $500 million marketing budget, is Microsofts first console and its most ambitious effort yet to conquer the living room in the same way it did the office. Packing the power of a high-end personal computer, the Xbox will challenge both PlayStation2 and Nintendos coming GameCube with a top-notch graphics chip and a high-speed Internet port. Microsoft is willing to lose as much as $100 on each $300 box to lay a foundation for other consumer devices and to head off the advances of Sony, which has a head start of 20 million systems worldwide, analysts say.