FOOL PLATE SPECIAL
Electronic Arts was the most glaring omission when Microsoft announced its preliminary list of developers for the Xbox, the gaming console the company hopes will be the hit of Holiday 2001. However, as of this morning, it seems EA's hit sporting games -- all currently top sellers for Sony's PlayStation 2 -- will help draw customers to a new machine for the second year in a row.
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The official developers' list on Microsoft's (Nasdaq: MSFT) official Xbox website is now officially out of date, with video game software leader Electronic Arts (Nasdaq: ERTS) this morning announcing that it will join the conga line of companies developing games for the Rule Maker's forthcoming monster console. Electronic Arts' (EA) absence from the first draft of the list, released earlier this year, raised some eyebrows since the company is the world's leading game company by a long shot. But few in the industry believed EA -- which I own -- would be truant for long and, sure enough, the wait is now over. The list of developers for Xbox now numbers more than 200, so the addition of one more company isn't exactly earth-shaking. Still, the EA news does provide an added boost for the system as well as the game maker, shares of which were up slightly this morning. (We examine this sector in more depth in our Industry Focus 2001 report.) Microsoft, like Sony (NYSE: SNE) with the original PlayStation in the mid-1990s, will rely on strong "third-party" game developer support to provide consumers with enough high-quality titles to make Xbox worth buying. EA should help that become a reality. Though no plans for specific games to come were mentioned in today's release, they were hinted at: "Titles like Madden NFL 2001, SSX snowboarding, and Knockout Kings boxing are going to look great on Xbox," an EA exec said today. In return, EA should be the beneficiary of plenty of free publicity when the Xbox launches, which is expected to be next October. The software giant is planning a $500 million marketing blitz, much as Sony is expected to do for PlayStation 2. EA publishes several of the most popular "franchise" games in the business. According to PC Data, four of the company's annually updated sports titles were among the top 10 sellers for the new PlayStation 2 in the week ended Dec. 2, particularly in the mainstream sports category. Games like those should help Xbox's legitimacy with buyers. Microsoft will also count on strong buzz from exclusive games published under its own name, and the company has signed up 18 developers for this purpose. Will Redmond follow up by going on the acquisition trail? It certainly has the money to do so, though it's unclear whether it would look to take out a company like EA or one of its other publicly traded counterparts, or look instead toward smaller, private developers with specific products in mind as it did in buying Bungie from Take-Two Interactive (Nasdaq: TTWO). The biggest draw for the Xbox, however, may be the box itself. Though nobody knows what it will look like or what it will cost -- though a price point comparable to PlayStation 2's going ticket is likely -- the technical specifications are likely to blow its competitors' out of the water. Even so, it will be up to the game developers to turn those numbers into fun, and that's where announcements like today's should give prospective Xbox gamers hope. The announcement should also please Microsoft investors, many of whom may be watching curiously as their company looks for growth in a decidedly different market.
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