NEWS - Monday, September 23, 2002

Xbox Facing Crucial Xmas Sales Test

It’s been just six months since Microsoft Corp. launched its video game console Xbox in Europe and there is already mounting pressure on the U.S. software giant to score a big Christmas. The Xbox needs to end its first year with a flourish. If it doesn’t, industry observers say, its prospects for turning a profit will be pushed back a few years, triggering some deep soul-searching at Microsoft headquarters in Redmond, Wash. "If Microsoft has a disastrous Christmas, particularly in important markets like the UK and the U.S., then somebody in Redmond is bound to say, ’Wait a minute guys. This doesn’t look good," said Toby Scott, editor of video game trade publication ’Games Analyst.’ Industry experts are quick to point out the $30 billion video game market has never supported three consoles, noting that Dreamcast maker Sega Corp. of Japan, gave up the console business when it couldn’t compete. While the market is now bigger than ever, rivalling music and film box office sales, one elemental truth remains. Without a large installed base, developers are less inclined to create exclusive games for a machine, making profits elusive. A poor Christmas won’t sway Microsoft’s commitment immediately, but with estimated losses of anywhere from $76 to $150 on each Xbox, its prospects for being able to stay in the market long-term will look a lot murkier if it fails to capitalise on what could be the industry’s biggest sales periods ever. Click Here to Catch The Rest of the Article


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