The console launched with great hype, but at the moment it has little more than novelty value over Sony’s PlayStation 2. As Microsoft rolls out online services and exclusive games, the Xbox’s position will improve. However, its major aim is to establish Microsoft as a serious player in consoles. The company’s attempt to lead the market will come later.
Microsoft has launched its Xbox games console in Europe.
Microsoft on Thursday launched its Xbox games console in Europe, with great hype all round – unsurprising, given its $500 million global marketing budget. Initially, the consoles will sell in Europe for E479 each.
The Xbox is the most technologically advanced console on the market, with huge financial support behind it. However, it has hit the European market more than a year after its most serious rival, Sony’s PlayStation 2, and retails for a much higher price. The third new generation console, Nintendo’s GameCube, is targeting a different niche market.
At the moment, the market dynamics are in Sony’s favor. The Xbox’s lineup of games pales next to the huge array of PS2 software, and Xbox games do not yet reflect the console’s technological superiority. Metal Gear Solid drove PS1 sales; until an Xbox-only game appears that has the same consumer appeal, the console will trade mostly off its novelty value.
However, Microsoft is not in the gaming industry for the short term – and several factors are set to even up the fight. The first will be the Xbox’s online gaming capacity. All Xboxes are Internet-enabled, and Microsoft’s knowledge of online services is strong. If Microsoft launches a fast and reliable gaming service soon, this will be a major differentiating factor over Sony. The PS2’s Internet capabilities are optional extras, inevitably reducing the target audience.
Content will also be important – Microsoft will persuade content providers to create ‘must-have’ Xbox-exclusive games, preferably using its online capabilities. This will be expensive, since publishers are unsurprisingly reluctant to go exclusive, but necessary.
These advantages will build the Xbox’s market share substantially, but are still unlikely to dethrone the PS2 – and Microsoft is aware of this as anyone. The Xbox’s major aim is to get a foot in the door; the big battle for Redmond will be the PS3 versus the Xbox 2.