Microsoft cuts Xbox 360 model price

Microsoft said on Sunday it is cutting the price of its 20-gigabyte Xbox 360 video game consoles and rolling out a model with three times the memory space to take its place.

The US technology giant's announcement comes two days before the official start of a major Electronic Entertainment Expo at which videogame console makers will be striving to portray their hardware as superior.

Microsoft said it will trim 50 dollars (US) from Xbox 360 models with 20 gigabytes in the United States or Canada, cutting prices to 299 dollars.

An upgraded Xbox 360 Pro model with 60 gigabytes of memory will hit markets in those same two countries in August with 349-dollar price tags, according to the Redmond, Washington-based firm.

The reasoning for the boost in memory capacity is people's interest in storing digital photos, video, music and other data on gaming consoles which are essentially entertainment computers connected to television sets.

"We know consumers need more and more space to store the amazing digital content Xbox 360 offers, and we're giving it to them at no extra charge,' said Albert Penello, Xbox director of product management Albert Penello.

Sony maintains it has no intention of cutting prices on PlayStation 3 models, which sell in the United States for 400 0r 500 dollars depending on memory capacity.

Nintendo will be defending Wii's crown as the world's most popular videogame console, which is priced at 250 dollars and is snatched from shelves as soon as it arrives in stores.

The big three console makers along with videogame software makers large and small will be showing off their newest creations at the Expo in Los Angeles during the coming wee

Nintendo Wii outsells PS3 3-to-1 in Japan in March

Nintendo Co Ltd's (7974.OS) Wii game console outsold Sony Corp's (6758.T) PlayStation 3 by 3-to-1 in Japan in March but its DS handheld machine fell behind the PlayStation Portable for the first time in six months, a game magazine publisher said.
Nintendo, creator of such game characters as Mario and Zelda, sold 265,542 units of the Wii in the five weeks to March 30, compared with 81,579 units of the PS3, Enterbrain said on Friday.

The Wii features an innovative motion-sensing controller that allows gamers direct on-screen play by swinging it like a racket or sword, while offering a range of games that has widened the machine's appeal to women and the elderly.

Sony sold 415,415 units of its PlayStation Portable (PSP) during the month. That beat DS sales of 255,124 units, as Capcom Co Ltd's (9697.T) hunting action game, "Monster Hunter Freedom 2G," designed for the PSP, became the top seller in March, Enterbrain said.

Sales of Microsoft Corp's (MSFT.O) Xbox 360, which is popular in the United States but is struggling in the home turf of Sony and Nintendo, came to 13,127 units, according to Enterbrain.

Prior to the announcement, shares in Nintendo closed up 1.1 percent at 54,400 yen while Sony fell 2.1 percent to 4,260 yen. The benchmark Nikkei average (.N225) lost 0.7 percent.

Video game firm THQ sees buying opportunities

THQ Inc (THQI.O) is looking at buying other video game developers, but the publisher of games like "Cars" and "Saints Row" can grow without making acquisitions, Chief Executive Brian Farrell said on Thursday.

"We are seeing some opportunities in the marketplace given the two transactions going on," Farrell told Reuters in an interview at a company event to preview upcoming games.

He was referring to the pending merger between Activision Inc (ATVI.O) and the games unit of Vivendi (VIV.PA), and Electronic Arts Inc's (ERTS.O) $2 billion offer for Take-Two Interactive Software Inc (TTWO.O).

"It's going to create some opportunities because we are actively looking at every developer, every license out there and with our size now we can be more aggressive than larger, slower firms," Farrell said.

THQ has already moved this year to bolster its product lineup. Earlier this week, it said had bought Elephant Entertainment, a maker of casual and online games, for an undisclosed amount.

In January, THQ bought Big Huge Games, a studio focused on strategy games such as "Rise of Nations." Farrell said that team is focused on making a new role-playing game to fill a gap in THQ's product lineup.

Asked if THQ was looking at buying smaller development studios or publicly listed firms, Farrell said: "M&A is not a required or necessary thing in order to grow."

Analysts have said the recent merger activity in the video game industry is partly a result of development budgets for new games soaring into the tens of millions of dollars, putting pressure on smaller firms with limited financial resources.

Farrell said the video game industry was still growing fast despite concerns that a broad U.S. economic slowdown could hit consumer spending.

"We haven't seen any signs of slowdown," Farrell said. He said strong year-end holiday sales of new gaming hardware like Nintendo Co Ltd's (7974.OS) Wii console, Microsoft Corp's (MSFT.O) Xbox 360 and Sony Corp's (6758.T) PlayStation 3.

This year, THQ is banking on new games like criminal action title "Saints Row 2" and "WallE" based on the upcoming Disney/Pixar movie to drive growth after a disappointing 2007 forced it to kill off lackluster franchises like "Stuntman."

He declined to comment on specific financial forecasts, saying THQ would give an updated outlook when it reported results for its fiscal fourth quarter ended in March. The company previously said it expected a net loss of 13 cents per share on sales of $200 million.

THQ shares have risen 23 percent over the past month but its stock is still down 35 percent from a year ago.

Microsoft to replace Xbox 360 wheel after reports of heat, smoke

Microsoft will send out replacement parts for its Xbox 360 Wireless Racing Wheel after 50 reports that the video game controllers overheated and released smoke when plugged in, the software maker said today.The $130 steering wheel-shaped controllers mimic the physical sensations of race car driving for games such as "Forza Motorsport 2." About 230,000 have been sold to consumers, according to the company.
The Redmond, Wash.-based company said owners of the controller should stop plugging it in, but said it is safe to use with battery power.This is the second Xbox 360 problem this summer. In July, the company said it expects to spend more than $1 billion to repair hardware problems in the video game console.Microsoft Corp. didn't offer any estimate of the cost of fixing the controller problems.Gamers can register online to receive a "retrofit," which Microsoft would send with instructions "if necessary." The company would not say what replacement parts it plans to send to customers.Microsoft said it has not received reports of fire, injury or property damage as a result of the defect, and it is working with regulatory agencies such as the U.S. Consumer Product Safety Commission.The consumer product safety commission said the smoking controllers were only reported in Japan, but that it is monitoring the situation."Any time that a company is taking individual action to offer their consumers something to be proactive. . . we're big fans of proactive," said Julie Vallese, a spokeswoman for the commission. "If the company is making recommendations to its consumers, by all means consumers should respond to it."In July, Microsoft extended the warranty to cover shipping and repairs for the Xbox 360 console to three years, from two. The company said it fixed production problems that caused consoles to lock up and display three flashing red lights, which gamers have referred to as "the red ring of death."Microsoft shares closed up 8 cents at $28.30, but slipped 3 cents to $28.17 in after-hours trading today.

XBOX 360 out of order?

Imagine your blender breaking down twice. The vacuum cleaner giving up the ghost three times. The espresso maker repeatedly going kaput. Then imagine replacing the item with the same model over and over while keeping your brand loyalty and sanity.
Stephano Nevarez can. Since he first bought his $400 Microsoft Xbox 360 in 2006, it has failed three times. Each time, he sent the game machine back to the company and waited weeks for a repair or a replacement.
“There’s nothing in the house that breaks down as much,” said Stephano, a 15-year-old high school student from Salem, Ore.
Yet he remains a devotee of his 360 console, the more so because he wants to play Halo 3, the latest iteration of a violent space epic due in stores on Sept. 25; it is available only for that game machine.
The game, published by Microsoft, could redeem the company going into the holiday selling season. Untold numbers of 360 owners have watched their machines break down, and then, in many cases, watched the replacement consoles do the exact same thing because of a severe and widespread manufacturing flaw.
But if the Xbox players keep coming back because of Halo 3, and if other gamers buy the console just for the game, then Microsoft could markedly improve its standing in its battle against rivals Sony and Nintendo.
“Halo 3 is Microsoft’s most important game,” said Dan Hsu, editor in chief of Electronic Gaming Monthly, a magazine for enthusiasts. Mr. Hsu, who has seen the game, said it delivers in spades, with one caveat: “Assuming your machine does work, it does what it sets out to do.”
The bar is high. Combined, Halo and Halo 2 have sold around 15 million units, making the series one of the most successful game franchises of all time. The game has spawned novels, comic books and a possible movie.
The $12.5 billion console and video game business is up for grabs this year. On the console side, Nintendo is off to an unexpectedly strong start with its Wii, a game system that makes its players get up off the couch and move their bodies to direct action.
It has well over 28 percent of the American console market, according to NPD Group, a market analysis firm. The Wii is currently selling at a faster pace than the 360, and the company is releasing its big games this fall, Super Mario Galaxy and Super Smash Bros. Brawl, though neither is as popular as Halo.
Sony, with about 14 percent of the market, was hurt when the release date of Grand Theft Auto IV, a game it was counting on to increase console sales, was pushed back from October into the second quarter of next year.
Microsoft, which has 57 percent of the market, has declined to say what is causing some of its Xbox 360 to stop working, or how many machines have been affected. It has set aside $1.1 billion for repairs, a figure that suggests to industry analysts that the problem could affect a third of the 11.6 million 360s already in the hands of consumers.
Microsoft has said that it will fix any faulty Xbox 360 free of charge.
The most likely explanation of where the engineers went wrong is that the 360s are poorly designed to deal with the intense heat generated by game play and that computer chips and other electronics may be popping off the motherboard, said Richard Doherty, an analyst with the Envisioneering Group, a technology assessment and market research firm.
Mr. Doherty said he thinks that Microsoft, in an effort to put is machine into the market a year ahead of the Sony PlayStation 3, had skimped on product testing. He said that the failure rate among 360s is almost unheard-of among consumer electronics, where having even 1 percent or 2 percent of machines fail is considered a major problem.
He has been doing surveys of video game consumers, and results suggest that their patience is waning and that news of the problems is dissuading some potential buyers, he said.
Even die-hard users, he said, are wondering why they cannot take their machine to a store to have it checked out, rather than wait for it to break.
“It’s dissipating a tremendous amount of momentum they built up prior to July,” Mr. Doherty said, referring to when Microsoft first publicly discussed its $1.1 billion repair fund. “This is going to get worse before it gets better.”
But some financial analysts said that the eventual damage to reputation and revenue may not be so profound. Evan Wilson, an equity analyst with Pacific Crest Securities, said he thought that Microsoft’s fix-it-free policy had mollified many avid game players who have been among the first to purchase the 360.
Aaron Greenberg, group product manager for Xbox 360, said the repair campaign is aggressive and that the company, while it is not discussing what has gone wrong, is not taking the failures lightly.