Gates launches Xbox offensive in Japan

Microsoft chairman Bill Gates has launched a publicity offensive aimed at winning customers away from competing games consoles ahead of the launch of its Xbox console in around six months.

          Microsoft Chairman and Chief Software Architect Bill Gates launched a publicity offensive here at the Tokyo Game Show on Friday, aimed at winning customers away from competing games consoles ahead of the launch of its Xbox console in around six months.

          One stunt saw Microsoft plaster Tokyo with posters inviting people to send a message to what was supposedly Gates' e-mail address. A reply from Bill in perfect Japanese instructing them to check the company's new Xbox web site was the reward for anyone who sent an e-mail. Another stunt saw a smiling Gates pictured on the tray liners at a fast-food restaurant at the game show site, holding a hamburger and an Xbox controller and asking, "Which of these two items is more tasty?"

          Gates's focus on Japan, including delivering a keynote speech at the show, is not surprising. Not only is Japan one of the world's top games markets -- Gates cited figures showing that a third of games revenue worldwide come from Japan, and three out of four homes here have a game system -- but it is also the home turf of Sony Computer Entertainment Inc. (SCEI) and its PlayStation 2.

          SCEI stomped into the games market in the mid-nineties with the launch of its PlayStation console and almost immediately began winning a substantial market share. The recently-launched second version of the console provides Microsoft with its toughest competition, although Microsoft will also find itself up against Nintendo's recently-launched GameBoy Advance handheld machine and the company's planned Game Cube home console.

          The Xbox is based on a 733MHz Pentium III processor from Intel Corp. and includes a graphics processor produced by NVidia Corp., 64M bytes of memory, a DVD (digital versatile disc) drive, Ethernet adapter, four game ports and an 8G-byte hard disk drive.

          This last component is clearly regarded by Microsoft as a key advantage for the console. Gates noted that "people still underestimate the difference it will make." Data on the hard drive can be accessed much faster than that on an optical disc and so it should free up developers from the limitation of having to store the most frequently-accessed game data in memory and thus allow much more data to be accessed quickly while a game is played -- something that should enable more feature-rich games.

          SCEI's PlayStation 2 doesn't have a hard drive built-in, although the company, seeing the advantages that such a device can offer, is planning to release an add-on hard disk drive later this year.

          Microsoft's offensive is not focused on hardware alone. Gates stressed that hundreds of developers are working on games and used the keynote to preview 14 of the titles currently under development. He also introduced Toshiyuki Miyata, games production product group senior manager at Microsoft, who now heads Microsoft's games development program and was poached from SCEI.

          Gates' keynote comes weeks after the industry got a vivid reminder of the price of failure in the highly competitive market. Sega Corp. threw the towel in on its games console, the Dreamcast, at the end of January after large losses on the back of sales that never managed to live up to expectations. The halting of production and liquidation of surplus consoles alone cost Sega 80 billion yen (US$648.7 million) -- losses covered by the donation of 85 billion yen in stock by company President Isao Ohkawa, who passed away recently.

          While exiting from the console business, Sega announced its intention to focus on producing games for other platforms and this week said it would be working on 11 titles for the Xbox.

          During his keynote, Gates spoke of Ohkawa as a "great man who accomplished many things" and said, "We talked many times about how to bring Microsoft and Sega together so I know he would be very happy to hear Microsoft and Sega are announcing a long term partnership."

          The week also saw Microsoft announce another alliance in Japan. With NTT Communications Corp., the Internet and long distance telecommunications arm of Japan's dominant telephone operator, it announced plans Thursday to develop an online gaming platform for the Xbox in Japan, due to be launched commercially in 2002. [See "Microsoft, NTT link for Xbox online games in Japan," Mar. 29.]

          [Editors: Images to accompany this story are available in the IDG News Service Image Bank.]

Microsoft, in Redmond, Washington, can be reached at +1-425-882-8080 or at

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