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Jun 14, 2010 9:29 PM by Chris Welty

Microsoft Makes Big Push for New Game Audience

LOS ANGELES (AP) - To appeal to families ready to graduate from
the Nintendo Wii, Microsoft Corp. wants to build on the success of
the Wii's motion-capture wand - by getting rid of the wand
entirely.
On Monday, Microsoft detailed its new Kinect game technology,
coming this fall for the Xbox 360 game console. Once known as
Project Natal, the Kinect system recognizers users' gestures and
voices, so you can control on-screen avatars in racing, action and
sports games just by moving your body. Microsoft showed off a
"Star Wars" game, coming in 2011, that will use Kinect to let
players swing virtual lightsabers in their living rooms, and a
dance title from the makers of "Rock Band" that eliminates the
need for controllers and high-tech mats to get moving.
Kinect's voice feature also means you can say "pause" or
"play" when watching a movie on the Xbox instead of reaching for
the remote. And it has a video chat function that can connect
people from different sides of the country, as Microsoft
demonstrated Monday at the E3 Expo in Los Angeles, a video game
conference with 45,000 industry insiders.
Kinect will launch Nov. 4 in North America, Microsoft said.
Prices were not disclosed, and it's not clear whether Kinect will
come with new Xboxes or only be sold separately. The technology
works with existing systems, as well as a new version of the Xbox
console that goes on sale next week. It's smaller, sleeker and
comes with built-in Wi-Fi and a 250 gigabyte hard drive. The new
Xbox will cost $299, which previously got you a hard drive with
half the capacity.
Until now the Xbox has been mainly known as the device to play
hard-core shooter games such as "Call of Duty" and "Halo."
Microsoft ranks second in console sales to Nintendo, just ahead of
PlayStation maker Sony Corp.
"We've established ourselves as a strong No. 2," said Dennis
Durkin, chief operating officer of Microsoft's video game business.
He called the launch of Kinect an inflection point for Xbox, adding
"we're not content with being No. 2 any more."
Since the original Xbox launched in 2001, the video game system
has been part of three money-losing divisions. Microsoft doesn't
break out results from the Xbox, but in total, the divisions that
housed the game unit reported operating losses of about $7.45
billion from fiscal 2002 through 2007. The past two years, the
group that now includes Xbox, Zune media players, Windows phone
software and the touch-screen Surface table computer finally was
profitable, with operating earnings of $497 million in fiscal 2008
and $169 million in fiscal 2009. The most recent figure was still
less than 1 percent of the company's total operating income.
Scott Steinberg, video game analyst and most recently founder of
Game Exec magazine and Game Industry TV, said the most exciting
applications of Kinect are the uses that go beyond gaming, like
video chat and the ability to select and watch movies without the
need for a remote controller.
It opens up new possibilities for interfacing with technology -
for instance, calling up movies and TV shows with the flick of a
wrist or interacting with virtual pets with just a smile, he said.
Though it is working to broaden its reach, Microsoft is still
trying to nurture its loyal gamer fans, who reliably buy sequels to
blockbusters like "Halo" and "Gears of War." To that end, the
company announced an exclusive deal Monday with Activision Blizzard
Inc., the maker of the "Call of Duty" games, that will bring
downloadable content known as "map packs" to the Xbox first (and
then the PlayStation 3) through 2012. Such extra content is an
increasingly important business for video game makers because they
can extend the life of games.

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