Michael Bluth
03-05-2003, 02:43 PM
Microsoft taking Xbox into arcades
By Dean Takahashi
Mercury News
Hoping to open another avenue for its video games and broaden its front in the war against Sony and Nintendo, Microsoft is expected to take its Xbox game console into arcades later this year.
The project, code-named Chihiro after the heroine of the Japanese anime film ``Spirited Away,'' has been in the works for a couple of years. Microsoft and Sega announced in fall 2001 that they would jointly create arcade machines based on the Xbox technology. But the partners have been quiet since that time.
Now the project is closer to fruition. When Microsoft and graphics-chip maker Nvidia settled their price dispute on chips for the Xbox, the agreement included plans for the Santa Clara chip maker to provide Microsoft with chips for arcade machines.
A Microsoft games source said the appeal of the arcade is the opportunity to sell more games and the chance to extend the Xbox brand as the coolest gaming experience. While hundreds of console games are released each year, only several dozen arcade games are released. The arcade titles influence the kind of console games that fans buy.
Exclusive titles
Moreover, if Microsoft can get Sega to switch off its current Dreamcast-based arcade technology, dubbed Naomi, then it can lock up more exclusive titles that could be instantly converted to run on the Xbox.
For the arcade product, Nvidia probably will supply the same graphics chip it provides for the Xbox home console. In part, that's because the quality of the Xbox graphics engine is considered more than adequate to power a cool arcade machine, though the machine will have more main memory chips than the 64 megabytes in the Xbox to accommodate fast-action arcade graphics.
Microsoft also will find other ways to stuff more capability into an arcade machine, which typically costs $4,000 to $16,000, compared with the $199 Xbox.
Not wanting to be left out, both Nintendo and Sony also are working on arcade versions of their console machines. Sony has shown the ``Tekken 4'' fighting game on an arcade machine based on the PlayStation 2, and Sega recently showed a version of its ``F-Zero'' flying game running on an arcade machine based on Nintendo's GameCube console.
Shigeru Miyamoto, Nintendo's top game developer and a senior managing director, said ``F-Zero'' would allow someone to take a game stored on a GameCube and put it in an arcade system, allowing the player to resume a home console game on the arcade machine.
Perrin Kaplan, vice president of corporate affairs at Nintendo, said the company hasn't decided whether to launch the arcade machine in the United States.
Big risks
The arcade business carries big risks. Eddie Adlum, publisher of arcade magazine RePlay, said arcades have been in decline ever since the rise of console gaming. About a decade ago, he estimates there were 10,000 arcades, but that number has since dropped to about 3,000. Hit games such as ``Ms. Pacman'' once sold 100,000 machines, but today, typical hits sell maybe 4,000 to 6,000 units, Adlum said.
Sega Enterprises, which has agreed to merge with pachinko-machine giant Sammy, and Namco remain the biggest players in arcades, but many Japanese rivals have exited the business.
Microsoft and Intel tried to restore life to arcades in 1997 using PC technology in the machines, but the effort drew few converts.
``Everyone thought that Microsoft would be the salvation of a declining industry,'' Adlum said. ``It looked good for about 10 minutes and then nothing happened.''
Xbox's strength
Lately, the rise of online gaming, especially in Asia, has transformed many arcades from stand-alone machines to networks of connected computers where players can play against each other or anyone else over the Internet. That transition plays to the Xbox's strength, since it is primed for broadband gaming, and it also plays to Microsoft's strong relationship with Sega, which is a big supporter of online gaming.
Microsoft reported Tuesday that more than 350,000 gamers have subscribed to its Xbox Live online service since its launch in November. Those gamers have logged more than 15.7 million hours playing games on the service. On March 14, Microsoft will extend the service to Europe.
Microsoft has talked numerous times to Sega about buying the Japanese company, and Sega used Microsoft's Windows CE software in its defunct Dreamcast console.
``We think that the arcade business shows some signs of revival, particularly in Japan,'' said a Microsoft gaming source. And that's where the Xbox needs the most help, since it is a distant third in that market to Sony and Nintendo.
http://www.bayarea.com/mld/mercurynews/business/5319668.htm
Hm.............. maybe they're thinking about buying Sega out and letting them run that division? That sounds like it'd be a mighty good plan.
By Dean Takahashi
Mercury News
Hoping to open another avenue for its video games and broaden its front in the war against Sony and Nintendo, Microsoft is expected to take its Xbox game console into arcades later this year.
The project, code-named Chihiro after the heroine of the Japanese anime film ``Spirited Away,'' has been in the works for a couple of years. Microsoft and Sega announced in fall 2001 that they would jointly create arcade machines based on the Xbox technology. But the partners have been quiet since that time.
Now the project is closer to fruition. When Microsoft and graphics-chip maker Nvidia settled their price dispute on chips for the Xbox, the agreement included plans for the Santa Clara chip maker to provide Microsoft with chips for arcade machines.
A Microsoft games source said the appeal of the arcade is the opportunity to sell more games and the chance to extend the Xbox brand as the coolest gaming experience. While hundreds of console games are released each year, only several dozen arcade games are released. The arcade titles influence the kind of console games that fans buy.
Exclusive titles
Moreover, if Microsoft can get Sega to switch off its current Dreamcast-based arcade technology, dubbed Naomi, then it can lock up more exclusive titles that could be instantly converted to run on the Xbox.
For the arcade product, Nvidia probably will supply the same graphics chip it provides for the Xbox home console. In part, that's because the quality of the Xbox graphics engine is considered more than adequate to power a cool arcade machine, though the machine will have more main memory chips than the 64 megabytes in the Xbox to accommodate fast-action arcade graphics.
Microsoft also will find other ways to stuff more capability into an arcade machine, which typically costs $4,000 to $16,000, compared with the $199 Xbox.
Not wanting to be left out, both Nintendo and Sony also are working on arcade versions of their console machines. Sony has shown the ``Tekken 4'' fighting game on an arcade machine based on the PlayStation 2, and Sega recently showed a version of its ``F-Zero'' flying game running on an arcade machine based on Nintendo's GameCube console.
Shigeru Miyamoto, Nintendo's top game developer and a senior managing director, said ``F-Zero'' would allow someone to take a game stored on a GameCube and put it in an arcade system, allowing the player to resume a home console game on the arcade machine.
Perrin Kaplan, vice president of corporate affairs at Nintendo, said the company hasn't decided whether to launch the arcade machine in the United States.
Big risks
The arcade business carries big risks. Eddie Adlum, publisher of arcade magazine RePlay, said arcades have been in decline ever since the rise of console gaming. About a decade ago, he estimates there were 10,000 arcades, but that number has since dropped to about 3,000. Hit games such as ``Ms. Pacman'' once sold 100,000 machines, but today, typical hits sell maybe 4,000 to 6,000 units, Adlum said.
Sega Enterprises, which has agreed to merge with pachinko-machine giant Sammy, and Namco remain the biggest players in arcades, but many Japanese rivals have exited the business.
Microsoft and Intel tried to restore life to arcades in 1997 using PC technology in the machines, but the effort drew few converts.
``Everyone thought that Microsoft would be the salvation of a declining industry,'' Adlum said. ``It looked good for about 10 minutes and then nothing happened.''
Xbox's strength
Lately, the rise of online gaming, especially in Asia, has transformed many arcades from stand-alone machines to networks of connected computers where players can play against each other or anyone else over the Internet. That transition plays to the Xbox's strength, since it is primed for broadband gaming, and it also plays to Microsoft's strong relationship with Sega, which is a big supporter of online gaming.
Microsoft reported Tuesday that more than 350,000 gamers have subscribed to its Xbox Live online service since its launch in November. Those gamers have logged more than 15.7 million hours playing games on the service. On March 14, Microsoft will extend the service to Europe.
Microsoft has talked numerous times to Sega about buying the Japanese company, and Sega used Microsoft's Windows CE software in its defunct Dreamcast console.
``We think that the arcade business shows some signs of revival, particularly in Japan,'' said a Microsoft gaming source. And that's where the Xbox needs the most help, since it is a distant third in that market to Sony and Nintendo.
http://www.bayarea.com/mld/mercurynews/business/5319668.htm
Hm.............. maybe they're thinking about buying Sega out and letting them run that division? That sounds like it'd be a mighty good plan.