Gaming's Clash of the Titans

Gaming's Clash of the Titans

SEGA'S FOLLY

One of the biggest riddles remains: Does being first to market matter? Microsoft will have at least a six-month jump on rivals. Bill Gates and his crew vowed never to be tardy again after the first Xbox hit shelves more than a year behind Sony's PlayStation 2. Thanks to certified hits like Gran Turismo and Grand Theft Auto, the PS2 has since outsold Xbox by 4-1. This time around, Xbox honcho Robbie Bach argues that, because of Microsoft's lead, developers are likely to optimize their games first for the Xbox 360. "That's a very good thing, in my book," Bach said in an interview.

Maybe not. Remember Sega's Dreamcast? That company had a year's lead on the PS2, but Sony's then-superior technology clobbered Dreamcast's sales. Researcher IDC games analyst Schelley Olhava says if Sony delivers on all the technology it showcased during its news conference, Microsoft could find itself in a similar fix. Sony says it will roll out PS3 in the spring, although it did not give details on which regions of the world will meet that deadline.

ONLINE MYSTIQUE.

Game developers say a big factor in Microsoft's favor is its clear strategy for using the Internet to generate extra game-related revenue. For example, players may be willing to spend a few bucks on on such things as new character-themed clothing offered online. That could help boost a $20 billion market now largely governed by one-time sales (see BW Online, 5/24/05,

At the show, Microsoft demonstrated new improvements to its Xbox Live online gaming service and noted that customers will get entry-level "silver service" (online service) free. The Xbox 360 also will be tied to Windows PCs and supposedly connect to a variety of handheld devices, letting consumers access outside music and video content and play it through the Xbox.

Neither Sony nor Nintendo has offered many details of its online plans. Sony Computer Entertainment America President Kazuo Hirai declined to elaborate in a follow-up interview. "There will be an extension of the PS3 outside the home, with chat, e-mail, and head-to-head game competition," Hirai says. "We're looking to develop a relationship with the customer to say what works and what doesn't work."

EXCLUSIVE TITLES.
For its part, Nintendo had little to say about Revolution that game developers did not already know. The oldest of the top three console-makers drew thunderous applause after announcing Revolution would be able to play virtually every game in Nintendo's history. But President Satoru Iwata did not offer details of the "entirely new way of playing games" that he has been promising. The company doesn't expect to release further details until the end of the year, as it gears up for what it will only say is a 2006 launch.

Gamers, be warned: This battle is going to look more like a chess match than a fight to the finish. Each company hopes behind-the-scenes incentives will lure the likes of Electronic Arts (ERTS ) and Square Enix to create exclusive titles for its consoles. Exclusivity could be the key to success, since hit franchises have always been the deciding factor in any console's success. "We will be there to support the developers to make sure they take advantage of the power of the PS3," Hirai says. Counters Microsoft's Bach: "From a platform perspective, we have the most powerful one on earth."

With the gloves off and billions of dollars at stake, count on such rhetoric as just the first salvos in a multifaceted strike to win the battle for fun.

New Xbox: Games are just the start

MercuryNews.com | 05/13/2005 | New Xbox: Games are just the start

Beyond being a killer machine for gamers, the Xbox 360 makes good on the company's original plan in 2001 to unleash a ``Trojan horse.'' That is, consumers buy the console as a game box, but they use it for all sorts of digital entertainment. The Xbox 360 goes on sale in the fall but Microsoft has not revealed its price.

The Xbox 360 will play not only games but movies, music and photos. It will connect to the Internet, letting players chat with each other and buy gaming merchandise at an online marketplace. The Xbox's high-definition games will have more of a cinematic feel, and the Xbox 360 will have more horsepower than any personal computer available today.

Beyond expanding the reach of video games -- now found in about 45 percent of U.S. homes -- Microsoft Chairman Bill Gates wants Microsoft technology to be a gateway to all sorts of paid entertainment. At stake are billions of dollars as consumers begin to use such devices for getting everything from Internet TV to downloads of new video game levels.

Microsoft has been willing to tolerate big losses in pursuit of this strategy. The group that includes the Xbox has lost $1.4 billion in the past seven quarters.

``The PC is not going to be the device that wins, so this is the major play that Microsoft is making for the future,'' said Rob Enderle, an analyst at the Enderle Group. ``This is going to put a huge amount of pressure on Sony.''

But Microsoft only can win if it loosens Sony's much stronger grip on gamers. Moore said Microsoft has learned lessons from its first foray into gaming. Sony outsold the original Xbox, with roughly 87 million consoles sold vs. Microsoft's 20 million.

Microsoft did nose out Nintendo as the No. 2 player, beating a company which has been making games for more than 50 years. However, the Xbox fell flat with Japanese consumers, who didn't like the games and who thought the console was too big for their smaller living spaces.

Outdoing initial expectations, the Xbox will come with a 20-gigabyte hard disk and 512 megabytes of memory as well as free online services. The Internet strategy lets Microsoft tailor its ads and other pitches directly to a gamer's personal tastes. Rivals will have to weigh matching Microsoft's expensive upgrades or risk producing less impressive games.

With the Xbox 360, Microsoft is having an easier time lining up game developers and publishers. The company and its allies have more than 160 games in the works, and Microsoft has seeded the developers with thousands of game-making kits.

Electronic Arts, a reluctant supporter of the first Xbox, is now wholeheartedly devoting resources to Xbox 360 games, said a person familiar with the matter who asked not to be identified. Microsoft also has made it easy to create games that run on either a personal computer or the Xbox 360.

``I believe we can win this time,'' said Shane Kim, head of Microsoft's Game Studios, which makes games for the Xbox and the PC. ``We have a massive amount of investment in this project.''

Microsoft has loaded the Xbox with entertainment extras to win over the ``swing voters'' who aren't sure what console they want. But it has stopped short of making the machine into an unwieldy PC.

``It's more like a digital amplifier, not a full stereo,'' said Peter Moore, corporate vice president of worldwide marketing and Xbox publishing at Microsoft.

Analysts briefed about Microsoft plans said the company likely will take business away from Sony, which has 68 percent of the console market.

``I think it's going to be a neck-and-neck battle this generation,'' said Van Baker, an analyst at market researcher Gartner. ``It's clearly much more of a horse race.''

``They've done their work this time, and it's an even playing field,'' says Richard Doherty, an analyst at market analyst firm Envisioneering Group. ``Does it have bang beyond a game console? Absolutely. But are they going to deliver? That's the question.''

Yahoo upsets the online music investing cart

New York Daily News - Business - Yahoo upsets the online music investing cart

Yahoo upsets the online music investing cart

BY TOM VAN RIPER, DAILY NEWS WRITER

Investing in hot technology has never been for the faint of heart. Yesterday's big winner is tomorrow's dog - as intense competition blows up business models just as they seem to be taking off.

So it goes with online music, where Yahoo's announcement that it's jumping into music downloading sent shares of Napster and RealNetworks reeling yesterday.

RealNetworks stock sank $1.54, or 21%, to $5.76, while Napster plunged $1.70, or 27%, to $4.65. Yahoo shares gained 82 cents to $34.88.

Napster said its quarterly loss widened to $24.3 million, or 60 cents, from a year-ago's $6.57 million, or 20 cents. Revenue nearly tripled to $17.4 million.

Yahoo, in its quick attempt to emerge as the prime competitor to Apple's iTunes, said it is offering thousands of songs for a yearly subscription fee of just $60, about a third what Napster and RealNetworks charge.

And that might make an investment in those two music providers only for those willing to bet on a takeover, experts said.

"Napster and RealNetworks have built a model based only on subscription fees, and that's just not happening now," said Manhattan money manager Gene Walton, who tracks the industry.

Even though shares of both companies had soared over the past couple of years, their future may now depend on a partnership to provide exclusive content - possibly adding video along with music - to a big gadget seller like Sony, Walton said.

Meanwhile, analyst Eugene Munster of Piper Jaffray told clients he thinks Yahoo will eventually raise prices after luring customers, giving Napster a chance to compete again.

But Yahoo's broad set of businesses, from Internet search to online games, may well allow it keep music cheap as a way to draw more traffic and drive up the price of its banner advertisements.

Longhorn UI Meets Social Computing

BetaNews | Longhorn UI Meets Social Computing

By David Worthington, BetaNews, May 3, 2005, 2:47 PM

Microsoft is concentrating social-computing experts from Microsoft Research onto the Windows user interface team, Microsoft Watch has reported. This happening has led some Longhorn insiders to speculate that the "Aero" user interface will assimilate interactive elements including blogs, RSS feeds and wikis.

In late April, Microsoft tapped social-computing group research project manager Lili Cheng to join the Windows Shell interface team, said Microsoft Watch. Cheng has been employed by Microsoft since 1995, and, prior to that, worked with Apple Computer's human interface research group.

As part of the reorganization, Cheng is shifting approximately 10 of her coworkers to the Windows team where she will serve as the "director of Windows user experience and research."

Cheng is credited as being the driving force behind Wallop, a social-networking Web site that puts each of the aforementioned technologies into practice to explore how users "share media and build conversations in the context of social network."

Other projects developed by Microsoft Research focus on how to utilize metadata to clusters information and include the "Stacks" project for sorting digital images. MS Connect, meanwhile, displays graphical representations of the relationships between groups and individuals.

"I commend Microsoft for trying to improve the Windows user interface, but I question the timing. The UI appears to be a major work in progress, in what I consider to be fairly late along in the development process. My advice to Microsoft: Closely watch the social engineering effort MSN is engaging around Messenger and Spaces," commented Jupiter Research senior analyst Joe Wilcox.

Why Google Scares Bill Gates

Technology - Why Google Scares Bill Gates - FORTUNE

GATES VS. GOOGLE
Search and Destroy
Bill Gates is on a mission to build a Google killer. What got him so riled? The darling of search is moving into software—and that's Microsoft's turf.
By Fred Vogelstein

Một bài báo hay về cạnh tranh giữa MS và Google. Phân tích các vũ khí của hai bên, chỉ ra khó khăn lớn nhất của MS trong cạnh tranh với Google: Business model và một vài gợi ý về bước đi tiếp theo của MS.

Microsoft hits redial in cell phone battle

Microsoft hits redial in cell phone battle | CNET News.com

After years of playing runner-up in the cell phone market, Microsoft hopes it has finally found a winning entry


The software maker will announce Tuesday that it has wrapped up development of Windows Mobile 5.0, its latest operating system for cell phones and handhelds. As previously reported, Microsoft is hoping to boost its fortunes--and grab some market share from archrival Nokia--by creating software that can more easily be customized by device makers and wireless carriers.

"A lot of their requests about customization used to take us a lot of handwork to do what they wanted," Microsoft Chairman Bill Gates told CNET News.com. "With Windows Mobile 5.0, we've taken a lot of the customization and made it really trivial for them to do it."

Gates, who will announce the new version at a mobile developer conference in Las Vegas, noted that Microsoft has already convinced 68 carriers in more than 40 countries to offer phones using its products.

The company's mobile effort is led by Ya-Qin Zhang--who previously headed Microsoft's Beijing research lab. The mobile effort has focused for some time on an overhaul of the OS that would allow it to run on a broader array of devices.

Sweating the details

In many cases, however, it's the little things that Microsoft worked on this time around, such as making sure that cell phone operators can customize the color scheme on a device so it matches their logo and not that of a competitor. For years, all of the links on a Microsoft mobile device were colored blue. The company said its early experiences have helped it this go-around.

Devices running the new operating system will begin coming to market over the next several months, Horn said. A few products, such as T-Mobile's MDA IV and Samsung's hard drive-based SGH-i300, have already been announced. Others will be announced next week.

But Microsoft is clearly focused on the market for cell phone devices--and on touting its progress against chief competitor Nokia--by adding support for hard drives and USB 2.0 connections, and by making it easier to create phones with keyboards.

In Windows Mobile 5.0, the software maker also addressed a key shortcoming: Devices running previous versions of Windows Mobile often lost key information if the handheld or phone's battery completely drained. The problem was so bad that some device makers wrote their own software, but Microsoft said it has implemented a feature in the OS called "persistent memory storage," which is designed to take care of the issue.

A RIM killer?

In the past, Microsoft has had three distinct flavors of Windows Mobile: one for handhelds, one for phones and a third for handheld-shaped devices that also packed phone capabilities. The distinctions still exist, but Horn said the barriers between the categories are starting to fall. He said that roughly 90 percent of the code is now common among the categories, though in many cases software written for one class of device still needs to be modified to run on a different kind of Windows Mobile product.

Although Microsoft is updating the operating system that runs on mobile devices, the company is not providing a concurrent upgrade to its ActiveSync software that connects cell phones and handhelds to corporate servers. Because of the corporate link, some had said Windows Mobile 5.0 would be a "RIM killer," directly targeting the maker of BlackBerry devices that are popular in the business world.

While there are not many features directly targeting Research In Motion's stranglehold on mobile e-mail, analysts say Microsoft has set the stage for a showdown through its broader support for devices with keyboards.

"By enabling easy customization, handset manufacturers should be able to introduce attractive BlackBerry handheld alternatives," Stanford Group analyst Pablo Perez-Fernandez wrote in a report issued Monday.

Microsoft added a number of networking enhancements including improved Bluetooth short-range wireless networking. Also, Wi-Fi, which was supported in Pocket PC devices, is now supported for smart phones as well.

The new Windows Mobile version should help RIM's server software rivals including Good Technology, Seven Networks, Visto and Intellisync, Perez-Fernandez said. "Most alternative push e-mail suppliers are already customizing their platforms to run under (Windows Mobile 5.0), and we believe that a barrage of...products will soon hit the market."

"RIM is being attacked from every angle," Perez-Fernandez said, "and we think things will get worse."