SBJ/October 17 - 23, 2005/Marketingsponsorship

New Xbox 360 console to hit market

Microsoft Corp.’s next-generation gaming console, Xbox 360, will hit store shelves in the United States on Nov. 22, and a predictable, holiday-fueled retail frenzy will commence.

But for Microsoft and leading video game publishers, the goals for Xbox 360 are much loftier and designed for the long term: diversify the gaming audience beyond its traditional base of young males, and turn the niche world of video games into a mass-market, mainstream entertainment vehicle.

Is it a game or live action? The newest games, such as these from EA Sports, provide detail and other features that should attract more players.
Sports games, which provide a much more stable and annual revenue stream than the more hit-driven fantasy, driving and shooting genres, are a central building block of that strategy.

Electronic Arts, publisher of the perennially popular Madden NFL game, next month will release four sports titles at launch for the new console: Madden NFL 06, NBA Live 06, Tiger Woods PGA Tour 06, and FIFA 06.

Take-Two Enterprises plans five sports titles initially for Xbox 360: NBA 2K6; NHL 2K6; Top Spin 2, a tennis game; College Hoops 2K6; and Amped 3, a snowboarding title. Since it holds an exclusive license with Major League Baseball, Take-Two will follow with a major push in the spring for that sport.

Activision, meanwhile, will produce an action sports title for Xbox 360, Tony Hawk’s American Wasteland.

Microsoft, which no longer publishes sports titles for its own console, will still spend a third of its Xbox ad budget for the launch on sports programming. It won’t reveal the size of the budget, but said the buy will include Fox regional sports networks and the upstart CSTV, an indication of how much Microsoft values the core sports audience. Xbox is also a sponsor of the Association of Volleyball Professionals.

“Sports is a major part of what we do, even though we’re not involved on the publishing side,” said Bill Nielsen, Xbox marketing chief. “These games are a tremendous testimonial for our console because of the realism they depict. The new titles, they really make it difficult to tell whether it’s a game or real.”

By hitting store shelves next month, Xbox 360 will get a leg up on new consoles from Sony and Nintendo, which are not due out until next year. But again, the sales goals are long-term. Microsoft is expected to sell out virtually every console on the shelves this holiday season, reaching global sales of about 2 million. Of much more interest to industry watchers is how quickly Xbox 360 gets to 13 million, Microsoft’s estimated sales total for the original Xbox.

“The release of a new console typically puts a halo on the gaming industry, and I think we’d all like to have this event be a real celebration of gaming, and actually, move beyond just gaming into a fully fledged entertainment experience,” said Jeff Karp, Electronic Arts group vice president of marketing. “The capabilities of this console are so much greater and bring so much more depth and emotion to the games, that we’re now offering a much more immersive experience.”

But while the Xbox and the related sports titles may help move gaming beyond the traditional crowd of males 17 to 25 years old, sports is not a great fit with Microsoft’s other demographic target — attracting more females to gaming. Microsoft is planning a significant ad push highlighting the console’s other capabilities — playing DVDs and MP3 files and displaying digital photos — and is developing more family-oriented titles in search of that elusive audience.

“Sports titles will definitely be critical to the sales of any console, and in the case of Xbox 360, I think it will help make the audience [both] younger and older,” said Edward Williams, an interactive entertainment analyst for Harris Nesbitt in New York. “As for making it less male, I’m not sure about that.”

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