Senior Vice President Microsoft's Games DivisionRobbie Bach is betting more than half a billion dollars that Microsoft has got game. Make that a totally awesome, wet-your-pants, slime-green-colored game machine called Xbox, which Microsoft is certain will thrash the likes of Nintendo and Sony in the ferociously competitive video game business. Bach is heading up what is perhaps Microsofts most aggressive product rollout ever. Over the next 18 months, Microsoft expects to spend some $500 million marketing Xbox, more than it spent to promote Windows 95. The Xbox game system, expected to cost less than $300, is slated to hit stores this fall though Microsoft is notorious for slipping its ship dates.
Why is Microsoft playing games? First, the market opportunity is gigantic: Video game hardware and software sales totaled $6.5 billion in 2000, according to research firm NPD Group. But more important, Xbox represents Microsofts best chance to bust out of the PC and get into the living room. Xbox will have an Ethernet port for broadband Internet gaming, which analysts expect to become a sizable market segment.