NEWS - Thursday, April 8, 2004

How Platform Exclusives Sell

Bill Gates is used to monopolies, and he’s got one with the video game Halo. The game, which received rave reviews from Electronic Gaming Monthly, is touted by Microsoft as a "futuristic odyssey that challenges players to save humankind from extermination by aliens." Microsoft (Nasdaq: MSFT) announced plans to produce a relatively small run of 200,000 Xbox systems packaged with the title, along with a controller and game unit that will be shaded in "Halo green" later this month. While new users are obviously being targeted, die-hard collectors are also expected to be very interested, at least according to Microsoft. Just like the good ole opposable thumb, exclusivity and limited editions are a distinct selective advantage that help a company and its products survive the Darwinian world of business. Being able to sell what no one else can -- in this case, the disadvantaged competitors are Nintendo (Nasdaq: NTDOY) and Sony (NYSE: SNE) -- confers a differentiated brand proposition. Limiting the production schedule of a certain item tends to increase the value of said item, whether it is a worthwhile thing or not.


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