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October 24, 2007, 10:09 am

Microsoft’s Wii-killer

By Yi-Wyn Yen

The Nintendo Wii won’t be the only family-friendly game console on store shelves this holiday season. On Tuesday, Microsoft unveiled the Xbox 360 Arcade, its answer to the hot-selling Wii.

The $280 Arcade is relatively cheap (like the Wii), has a wireless controller (like the Wii), and comes with a packaged set of games (like the Wii). The new, low-end Xbox is also being heavily marketed as the “family-friendly” gaming machine. But will the Arcade capture the same audience as the Wii?

“Breaking through will be difficult. I think Nintendo’s got that crowd nailed,” says IDC analyst Billy Pidgeon. “Microsoft can widen its demographics, but it’s still identified as being part of the traditional core gaming demographic. Nintendo’s done a great job stepping outside that market.” Pidgeon called the Arcade “an aspirational product” for younger kids who want an Xbox because the older, cooler kids play the console.

Nintendo has admitted that it won’t be able to ship enough of its $249 consoles to meet U.S. demand this holiday season. But a competitively-priced Xbox Arcade may not win over consumers holding out for a Wii, says Pidgeon. “I can see some people settling for the 360, but it’s still $30 more. And for the mass market, that can be a big factor.”

Microsoft’s (MSFT) move to capture a broader audience comes amid the company’s campaign to position itself as the premier console for hard-core gamers. Last month’s release of Halo 3 helped push Xbox sales ahead of the Wii in September. It was the first time this year that the Xbox beat the Wii in a single month.

But the mass appeal of the Wii and software titles like Guitar Hero have begun to change the landscape of the console market. Xbox has built its success as the console of choice for hard-core gamers with a lineup of titles like Madden NFL 07, Halo 3, Bioshock and the highly-anticipated Mass Effect, due out in November. Now the software giant is going after the masses by packaging classics like Uno, Pac-Man Championship Edition and Boom Boom Rocket into the Arcade.

“Microsoft knows it has to have a broader church,” says David Gosen, CEO of mobile gaming company I-Play, who previously ran the marketing and sales division of Nintendo Europe. “They’re looking at other content like TV and casual games. They’re waking up to be mass market versus niche market.”

Wii is just too interactive, dynamic, and immersive for the “button mashing” action the xbox delivers. The arcade gives a blast from the past but so can an old 386 from a pawnshop running dos. ie:(prince of persia on xbox360)

Only way this will pan out is with some sort of revolutionary controller to fool our senses in thinking we are closer to VR. Wii wins out.

Posted By Russ, Atlanta Ga : October 25, 2007 1:07 pm

Tim Reynolds WTF are you talking about?

Stole from the Wii? Can you tell me what the 360 “stole” from the Wii? The online arcade/marketplace was available before the Wii was even announced. M$ basically created the online gaming for consoles with the original XBox. If anyone stole anything from any one it was the PS3 stealing motion sensing from the Wii and the online market place from M$.

I’m not an M$ support be get your facts strait before flaming a board.

Posted By Mike, Detroit Mi : October 25, 2007 11:16 am

I don’t see how this is a wii killer. It is missing the feature that makes the Wii sell. It doesn’t have an answer to the Wiimote. I’ve played these home console games since atari first released pong and to me, being able to stand up and do something instead of sitting on the couch mashing buttons makes the Wii much better.

I also wonder how much money Microsoft will lose per each sale of their new system. I thought they were already losing money on their consoles. Won’t selling an xbox at $249 eat into the sales of their own higher priced consoles, and if so, won’t it cost Microsoft a lot of money?

Posted By Steve, Baltimore MD : October 25, 2007 11:12 am

Gee wiz, what a surprise, Microsoft has an answer to the Wii. Microsoft always waits for the competition to inovate, then Microsoft copies the technology and markets it as an answer. Just as the Xbox stole it’s technology from the PS2, Micrsoft stole the technology from the Wii. I knew it would happen, I am surprised it took so long. What’s worse is all of those idiots out there that buy the Microsoft products. You all keep the pirates in business. Everything Bill comes up with on his own is a flop.

Posted By Tim Reynolds, Oklahoma City, OK : October 25, 2007 7:57 am

I dont see the point xbox releasing this system as a rival to the Wii,the xbox is already established as a core gamers system and is just tryin’ 2 make som spare change by marketing 2 older gamers that the nintendo managed 2 tap, which i must say was a good strategy seeing as nintendo wii is selling like hot cakes.

Posted By Jubs, London, Englang : October 25, 2007 5:51 am

James from Troy hit the nail on the head. Obviously Microsoft knows it will not be able to kill the Wii, but its meant to offer a lower entrance price for its console without lowering the value of its more expensive hard-core 360.

Its similar to what designers of clothes do. e.g. Ralph Lauren and creation of Polo brand means that the designer can sell some of its clothes under the Polo brand cheaper than the more expensive Ralph Lauren brand without lowering the *value* of its Ralph Lauren brand.

It’s a great way for MSFT to increase sales and revenues for the upcoming holiday season (especially with the Wii shortage).

Anyways, it seems like Mark is an engineering major from Cal Tech who doesn’t understand economics and management, and seems like he wants a job at Google…

Posted By Edward, Philadelphia, PA : October 25, 2007 12:00 am

To Mike A, this system comes with a 256mb memory card. Also, as an adult-owner of both systems who has been playing games since my Atari 2600, I can tell you that as much fun as the Wii is at first, the Xbox 360 is a much deeper console, with a better library of games, a great online community with the ability to download demos (something the Wii still misses), and a beefier internal set of hardware that will be able to play “next gen” games for a very long time to come.

Posted By Kyle, Charlotte, NC : October 24, 2007 8:37 pm

The games included with this package are very weak. The Wii offers fun via movement and activity. The 360 pack in lets you play UNO? Can’t I play that with a $5 deck of UNO cards?

Posted By James M, Williston, VT : October 24, 2007 12:34 pm

It’s $30 more expensive, the games included are not interactive like the Wii games (due to the motion controller), and with this 360 system you need to buy a $40 memory card because it comes with no internal memory to save games. I doubt this will compete at all with the Wii.

Posted By Mike A, Miami FL : October 24, 2007 12:21 pm

It’s a classic move from Microsoft; good enough and cheap wins over the market. But the appeal of the Wii wasn’t based on price as much as on the innovation it brought to gaming and the broadening of the market it achieved by attracting the “very young” and the “very old” as compared to the traditional console audiences. Once Microsoft brings that kind of innovation will it have a chance of winning over the market the Wii has expanded into. Innovation is what revived Nintendo; not aggressive pricing.

Posted By Rene Bonvanie, Foster City, CA : October 24, 2007 11:10 am

Nothing Microsoft makes kills anything but their own reputation. Example: Vista, Zune, Tablet PC, Entertainment PC, Etc. Guess thats why Bill Gates is leaving his sinking ship Microsoft.

Posted By Mark, Pasadena, California : October 24, 2007 11:05 am

Is not and is not meant to be a “wii killer”. It is meant to help holiday sales by adding more value to the entry level system without lowering the price.

Posted By James, Troy MI : October 24, 2007 10:28 am
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