CES 2007: Microsoft Says it Now Leads Video Game Market

To hear Microsoft Chairman Bill Gates tell it, there's the Xbox 360 and then there's everything else. The world's richest man is in Las Vegas this week for the 2007 Consumer Electronics Show (CES), and one of the facts he touted during his keynote address Sunday night was that Microsoft exceeded its goal of shipping 10 million Xbox 360s by the end of 2006. Given its year-long head start over the competition and the lackluster showing of Sony's PlayStation 3 during the holidays, Gates says the Xbox 360 is now in lead market position.

"I'm very excited about the progress we've made to become the leader in this next generation of gaming," Gates said. "The majority of those owners of Xbox 360 are new to the Xbox platform. That tells you how we are expanding the market, that tells you how we're growing, and how we're becoming a leader. And when you look at games, and the attach rate of games, the number of games sold per console, and the number of peripherals sold per console, we are setting records on Xbox 360 every step along the way."

One example of the Xbox 360's success is the game title "Gears of War," which has sold 2.7 million copies since hitting the market just two months ago. Gates refers to Gears as a "Halo-like franchise" that will drive Xbox 360 sales just as "Halo 2" drove sales of the original Xbox. But the Xbox 360 has other, more important advantages over consoles like the PlayStation 3. More than 160 games are now available for the Xbox 360, compared to just a handful for the PlayStation 3, and there will be more than 300 games for the Xbox 360 by the end of 2007. Microsoft's Xbox Live online service is both broad and deep, with features for hard-core and casual gamers alike. In addition, Microsoft is ensuring that the service is interesting to non-gamers, with movie and TV show downloads, some in High Definition (HD), a first for any console. And an upcoming new Xbox 360 product will merge Internet Protocol Television  services with a console for the first time.

For its part, Sony is ready to reassume control of the video game market. The company claims to have shipped 1 million PlayStation 3 consoles in 2006, despite indications in the market that far fewer consoles were made available. More important, Sony says that its parts shortages problems are over and that it will meet its goal of selling 6 million PlayStation 3 consoles by March 2006.

Sony dominated the previous two generations of video game consoles with its original PlayStation and PlayStation 2 devices. However, constant delays, high product costs, and a reinvigorated Microsoft have cast doubts on whether the company can repeat that success with the PlayStation 3. According to show goers, the PlayStation 3 is also hard to find at CES, compared to the almost ubiquitous Xbox 360. Is this a portent of things to come? We'll know more in March, when Sony's predictions can be compared to reality.

TAGS: Windows 8
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