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It's Open Season on Big New Game from Nintendo and Microsoft; Sony Braces for Challenge

13 Nov, 2001 By: Hive News

With Microsoft's Xbox arriving in stores on Thursday and Nintendo's GameCube landing on shelves Sunday, this holiday is shaping up as "Game Season" for both consumers and retailers.

With the economy in a slump, game, electronics, video and toy retailers are leaning on the new consoles from stalwart Nintendo and upstart Microsoft, as well as market leader Sony, to drive traffic into stores and put some sizzle into holiday sales. The near-simultaneous launch of GameCube and Xbox should ignite a three-way marketing war with PlayStation 2 for the hearts and minds of hardcore gamers who fuel the $20 billion video game industry.

Both Nintendo and Microsoft boast they will release more than a million consoles each this holiday, but it isn't clear whether there will still be GameCubes and Xboxes on store shelves through the holidays and after. Some analysts believe demand will far exceed supply. Others are not quite sure how it will all shake out with three systems competing head-on for consumers' dollars.

Retailers remember the frustration and lost sales when Sony ended up halving its original PlayStation 2 allotment, leaving many stores in a bind, and they want to avoid a repeat of that fiasco. In an effort to err on the side of caution, some retailers are not accepting pre-orders so walk-in customers are not disappointed in case something unforeseen happens, and they are keeping customers actively up-to-date on availability on store Web sites. Retailers have also been honing sales staff on the differences between the dueling consoles.

Each of the consoles target demos that overlap to some extent, yet each has its own identity. The $199 GameCube is geared to the under-20 set with the accent on young kids. The $299-priced Xbox and PlayStation 2 appeal to an 18-to-34-year-old audience. Xbox is the only console with a built-in hard drive and a plug for high-speed Internet access. Sony offers those features as external add-ons for the PlayStation 2. At the same time, PlayStation 2, which has shipped more than 20 million units worldwide, is trying to expand its reach to the young teen market.

Demand for the two new consoles is surging on the Web. Toysrus.com and Kmart's Bluelight.com have recently done advanced online sales of GameCube and Xbox, and sold out right away. Many units of both consoles are listed for sale online on eBay.

Delays have played a part in the launch cycles of both consoles. Nintendo delayed its original GameCube launch of Nov. 8 to line up 700,000 machines for the initial shipment -- 1.1 million units by year's end. In September, Microsoft announced a one-week delay of the Xbox's U.S. release -- the tech giant still won't divulge how many units are shipping for availability on Thursday. Previous reports indicate that number will fall between 500,000 to 800,000 machines, but the company prefers to focus on its sales goals of 1 million to 1.5 million by year-end.

Sony is meeting the newcomers' challenge by increasing its PlayStation 2 production to accumulate total sales of 10 million units in the U.S. and 30 million worldwide by late March.

In the software trenches, where the console wars winner is usually crowned, PlayStation 2 offers about 175 titles, Xbox 15 to 20 games at launch, and GameCube about 15 games at launch.

On the marketing front, Nintendo is shipping GameCubes to 15,000 U.S. stores and says it is able to steer shipments because about 60% of first day sales are coming from advanced purchases. Microsoft says it is shipping Xboxes to 10,000 U.S. stores.

According to the Associated Press, Electronics Boutique plans a midnight Wednesday Xbox launch in its EBX stores in San Francisco and in Redmond, Wash. And Toys R Us is offering 5,000 Xbox consoles on a first-come, first-served basis in a midnight launch at its new Times Square store. Best Buy and Wal-Mart plan to sell consoles on a first-come, first-served basis.

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