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Online Games Get a Boost From Microsoft's Xbox

by Rainier on March 30, 2004 @ 8:52 a.m. PST

AXcess News (www.axcessnews.com) released a story describing how a sagging online gaming industry got a boost recently by Microsoft when the Redmond-based software maker announced it had lowered the price of its Xbox console and added more software titles.

Microsoft Corporation announced Monday that it was lowering the price of its video console game system, Xbox, both in the USA, Canada and Mexico.

The move came on the heels of Apple recent pull back in its European rollout of iPod mini, citing the lack of components. The iPod mini holds up to 1,000 songs, which compliment Apple's iTunes online music library. Microsoft's Xbox now comes with a music feature called "Xbox Music Mixer" that broadens the system's features.

Microsoft claimed to have over 750,000 Xbox Live subscribers and market growth of 2%.

According to NPD Funworld, Xbox console sales grew 2 percent year over year, while Playstation 2 declined 29 percent and GameCube declined 18 percent.

Factoring PC games into overall industry software sales resulted in a 1.5% increase in 2003, to $7 billion, up from $6.9 billion in 2002.

NPD reports that all industry segments saw significant increases in unit sales in 2003, with the exception of portable game accessories, which fell 11%.

"The market has seen price cuts from console manufacturers as well as declines in retail software prices. With manufacturers and software publishers dropping prices to vie for consumer dollars, $10 billion in sales for the year is far from disappointing," said Richard Ow, senior video games analyst, The NPD Group.

AXcess News published a technology news story in mid February covering the video game industry (See, "US video game industry driven by console software sales, study finds") where again NPD Group was quoted as saying console software would drive sales.

The story noted a micro cap stock, Infinium Labs Inc. (OTC BB: IFLB), which is being led by a founding member of the Xbox project team, Kevin Bachus.

Infinium is developing the first game content over broadband platform with a totally secure delivery system. Dubbed The Phantom, Infinium Labs' system doesn't use CDs or cartridges, or any form of inserted packaged media. It runs strictly on an Internet based network.

With today's news by Microsoft lowering the Xbox price Bachus' company may need to increase its pace of product development. But Infinium may be doing just that. On March 16 IFLB announced a 4-for-1 forward stock split subject to regulatory filings with the Secretary of State in Delaware.

To find out why the Xbox console did not make the top ten list of software games in 2003 that used other platforms and to read the rest of NPD Group's findings go to http://www.axcessnews.com.

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