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Microsoft releases Xbox Live plans
Wednesday, May 22 2002
by Aoife White


Microsoft has announced ambitious plans that will see the world's number one
software maker launch a global gaming network for its Xbox console this autumn. 

Xbox Live, an interactive gaming service based on always-on broadband technology,
was announced at the annual E3 Gaming Congress in California on 21 May. 







Essentially, the new Xbox Live service will assign participating gamers a unique
user ID which will be linked to each Xbox console. Gamers will only be able to
access the network from another console by saving their ID to an SMB memory
unit.







Through the network, players are matched to opponents with similar gaming
abilities anywhere around the world and the network will prevent advanced gamers
from entering easy levels and wiping the floor with beginners.





Microsoft said it was placing a large emphasis on security, claiming that it will
build the entire infrastructure for the gaming network from scratch to make sure
it is secure and reliable. Users will be asked for personal information such as a
credit card number and demographic data to form the ID and the safety of the data
is likely to be a key consumer issue.





A voice communicator peripheral will allow every user to communicate with other
players and Microsoft said the sound quality will compare favourably to a
hands-free mobile phone.





Consumer beta testing will start in the United States this summer and the Xbox
Live Starter Kit will cost USD49.99 for 12 months of service in the US. The
service will go live in North America, Japan and Europe later this year, but
details on the launch dates for each country are not available at this time.





Interestingly, all three of the big console makers, Sony, Microsoft and Nintendo,
have now announced on-line gaming strategies but how successful they will be in
the market remains to be seen. Although Sony's "EverQuest" has proven to be a
raging success with more than 100,000 subscribers paying USD13 a month to access
the game's virtual world, Sega's Dreamcast, which also had on-line capabilities,
was a dismal failure and Sega pulled the plug on the unit last year.





Last week, Microsoft announced that it had signed an exclusive publishing deal
with Sigil Games Online, a development studio run by two of the creators of
"EverQuest." 



Moreover, Jupiter Media Metrix said in December 2001 that the PC will remain the
number one vehicle for on-line gaming in the US despite the increased
availability of connected video game consoles. According to Jupiter, the number
of American households owning a games console connected to the Internet will
increase from 700,000 in 2000 to 12.3 million by 2006, but people who play games
on-line via their PCs will continue to account for most of the gaming
subscription revenue. 



Jupiter forecast that subscription revenues from on-line PC games will be USD1.5
billion by 2006, while similar revenues from connected console gaming will only
reach USD250 million in the same period. But the company does admit that the
investment in on-line gaming for video console makers will begin to pay off after
2006 when broadband penetration increases in the US and the current generation of
consoles are ready for replacement. 

Last week Microsoft cut the US cost of the console from USD299 to USD199
following game console price cuts from rivals Sony and Nintendo.