By Bill Rigby and Malathi Nayak
REDMOND, Wash. May 21 Microsoft Corp
unveiled the "Xbox One" on Tuesday, its first new gaming console
in eight years, and its strongest push so far to dominate
consumers' living rooms with an array of exclusive media
The Xbox One took four years to develop and will be the
launchpad for a "Halo" live-action video series produced by
It will be sold worldwide "later this year," games unit
chief Don Mattrick told reporters at an event at the software
company's campus near Seattle, without providing details on
timing or pricing.
The device will also be the first platform to release the
next installment in Activision Blizzard Inc's
blockbuster shooter franchise, "Call of Duty".
Microsoft hopes its third-generation Xbox console will
attract video game fans who are increasingly sampling games on
mobile devices, while also becoming a hub for living room
The new device interacts with a television, responds to
voice and gesture commands, includes group video calling on
Skype, 15 exclusive game titles and original programming
The Xbox One will chiefly compete with Nintendo Co's
new Wii U and Sony Corp's forthcoming
PlayStation 4 for a bigger slice of the $65 billion-a-year
computer game market.
Microsoft did not refer to the new gadget as a "console" but
rather an entertainment system, signaling its renewed focus on
making the Xbox a sort of window for media and entertainment
content, said Forrester Research's James McQuivey.
The software giant is "trying to break out of the category"
and risks having to battle not just Sony and Nintendo but Apple
Inc, Google Inc and others to control consumer
entertainment in the age of Smart TVs, tablets and smartphones,
Acclaimed movie maker Steven Spielberg will be
executive-producing a television series based on Microsoft's
blockbuster sci-fi game "Halo" -- one of the game industry's
largest franchises by revenue -- for the Xbox One.
The new console will also offer exclusive National Football
League content and eight new game franchises, executives said.
Yusuf Mehdi, SVP of Microsoft's Interactive Entertainment
Business declined to put a figure on the company's investment in
exclusive game and video content, but called it a "very serious
commitment," in an interview with Reuters.
CONSOLE TO MOBILE
Console gaming still accounts for the largest share, of
about 42 percent, of the $65 billion world gaming market,
according to Microsoft. But playing games on smartphones and
tablets is gaining ground.
Videogame publishers have moved towards integrating their
games across consoles, PCs and mobile devices to keep gamers
engaged. Microsoft said it will have an updated SmartGlass app
that connects the Xbox One to tablets and smartphones.
"This is what we needed, a machine that could connect all the
possibilities the devices that exist can bring," Yves Guillemot,
CEO of games publisher Ubisoft, told Reuters.
The device will have 8 gigabytes of memory and comes with a
new-generation Kinect sensor that communicates a user's voice
and gesture commands to the console.
The original Kinect was launched in 2010 and sold
separately. Bundling the Kinect -- which costs $100 in the
current version -- may inflate the Xbox One's overall price tag.
Mehdi said Microsoft is still "evaluating" sale price.
"As a gamer, I wanted to see the additional features to make
the gaming experience better," said Dennis "Thresh" Fong, a
former professional video gamer and now CEO of gamer network
Sony had touted the new PlayStation 4's live streaming of
games and social features like a "share" button on its
controller when it announced its new console, Fong said.
Despite its strong brand and 'cool' factor, the Xbox itself
is not a key financial factor for the world's largest software
maker. Its Entertainment & Devices unit is set to break $10
billion in sales for the first time this year, but that's half
the sales of its Windows unit, and a lot less profitable,
averaging less than 15 percent margin compared to 60 percent or
higher for Windows or Office.
The company has more than 46 million users of its online
gaming and digital entertainment service Xbox Live. That is
still a fraction of the people who pay for its software.
Microsoft's stock closed down 0.7 percent at $34.85.
"Xbox is not going to move the revenue needle but it might
change the business model for the better as Microsoft tries to
learn how to have the kind of relationship Xbox does" with
consumers, McQuivey said.