Microsoft gets Xbox Live and kicking online

15 Nov 2002

The Seattle-based software giant launched its online gaming service Xbox Live today.

The service is part of the company’s five-year, US$2bn strategy to make its video game console an essential part of a networked home entertainment system.

For a one-year subscription to Xbox Live, which costs US$49 (€48), gamers receive demos of two games and a voice communication kit that will let players talk to each other through Microsoft’s global network, which is based in data centres located in Tokyo, London and Washington state. As many as one million users can be supported by its network, with up to 250,000 at one time.

At least nine games will be available at launch to support Xbox Live, with more expected by the year’s end. Among the most highly anticipated is the first-person shooter Unreal Championship, published by Infogrames.

In financial terms, however, the Xbox’s performance has been slow so far and the company is hoping the online gaming will provide a positive jolt. Microsoft’s home entertainment division, which includes the Xbox, lost US$177m in the last quarter.

This was not an unexpected result, in the face of intense competition from console-making rivals Sony, which claims the No. 1 spot with its PlayStation 2, and Nintendo, which released the GameCube late last year. According to The European Leisure Software Publishers Association’s annual report, the global market for leisure software was worth US$17.7bn in 2000 with Europe, at US$5.8bn, currently the second largest market after the US which is worth US$6.3bn, whilst the Japanese market is worth US$3.4bn. However, from 2002 onwards, the report predicts that the European market will overtake the US to become the world’s most valuable sales patch for leisure software.

Microsoft has announced that it plans to spend US$2bn on the Xbox project over the next five years.

By Linda Gillett