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Monday, August 22, 2005

Microsoft's Strategy For The Xbox 360 Isn't Single-Minded Domination

Microsoft's Strategy For The Xbox 360 Isn't Single-Minded Domination

"There's a strategy that is very familiar to gamers who play real-time strategy games such as "Age of Empires." It's called the "early rush." You build up your offensive forces at the expense of everything else and then charge the enemy's base. If you catch your opponent off guard before he or she has a chance to build up defenses, you win the game. It's a quick and dirty surprise attack.

That's just what Microsoft has been planning with the Xbox 360. It wants to launch early and grab as much of the games market as it can before its rivals can launch. The announcement this week of its manufacturing strategy is consistent with that point of view.

The company hired three contract manufacturers, Flextronics, Wistron and Celestica to build three factories in China so that it can launch in Europe, Japan and the U.S. simultaneously. The company tried to do this with the original Xbox but supply shortages forced it to back off.

No one has ever pulled this off, but globalizaton has come a long way since the first Xbox launch. Robbie Bach, chief Xbox officer, said the worldwide launch was on schedule.

The idea is to get a few million boxes into the hands of gamers at launch and then replenish quickly. Peter Moore, corporate vice president at Microsoft, said in an interview that the first company to get to 10 million units may have an insurmountable lead. That was the lesson of the last war." [more]

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