Microsoft to Develop More TV Programs as It Readies Xbox One

September 20, 2013 Leave a comment

Microsoft to Develop More TV Programs as It Readies Xbox One

Microsoft Corp. (MSFT) said it will expand its TV programming beyond the show based on its best-selling “Halo” game as it tries to position the new Xbox One console as a portal for games, videos and music. Phil Spencer, corporate vice president at Microsoft Studios, declined to elaborate in an interview in Tokyo today before the Tokyo Game Show. Microsoft is returning to the show this year as it competes against Sony Corp. (6758)’s new PlayStation 4 console and online games in a $63 billion industry.Xbox One is an attempt to merge TV watching with video game playing as Microsoft teams with partners including the National Football League to offer features such as viewing highlights and game scores. To underscore that broader approach, Microsoft is producing a live-action “Halo” show, in which director Steven Spielberg will be involved, and has a production team in Los Angeles developing concepts.

“They have literally hundreds of ideas that they are incubating right now,” Spencer said. “We will have some new announcement for TV shows coming pretty soon.”

Microsoft and Sony are betting that faster machines allowing for features such as motion capture and immersive graphics will lure consumers whose tastes are shifting toward mobile games played on tablets and smartphones. The Redmond, Washington-based company, which is buying Nokia Oyj (NOK1V)’s handset unit, is strengthening a push into hardware as demand weakens for programs such as Windows that made it the world’s largest software maker.

Improved Kinect

The Xbox One will be released in the U.S. on Nov. 22 with a price of $499. The company’s first new console in almost eight years uses voice commands and motion sensing to recognize users and let them shift between games, live TV and Skype through an improved Kinect device that will come with the machine.

Spencer said sports programming will be an important element of the new console.

“We believe sports is a very interesting category globally,” he said. “We’ll be expanding what we do in sports to bring more international sports into the mix. ”

Microsoft, the top U.S. seller of consoles for more than two years, will debut the Xbox One a week later than the $399 PS4, which hits American stores on Nov. 15. Nintendo Co. (7974) last month cut the price of the Wii U by $50 to $299 after the console, introduced last year, missed company sales targets.

Microsoft will release the Xbox One in 13 countries on the same day, giving it a week’s head start in Europe, where the PS4 starts selling Nov. 29. Sony will reach stores in 32 markets this year.

Smartphone Competition

The PS4, Sony’s first new console in seven years, and Microsoft’s Xbox One are each projected to sell 3 million units worldwide this year, according to the estimate of Michael Olson, an analyst with Piper Jaffray Cos. in Minneapolis. By comparison, smartphone shipments in the second quarter alone totaled 229.6 million, according to researcher Strategy Analytics.

U.S. retail sales of new video-game software fell 15 percent to $2.15 billion in the first half, to make up 33 percent of consumer spending on games, according to researcher NPD Group. Digital-format sales, including online subscriptions and downloads, mobile and social titles, rose 10 percent.

Microsoft, which initially targeted 21 countries for its debut, last month cut the number to 13 to ensure larger markets have sufficient supplies.

The company unveiled the new console in June and within weeks dropped curbs on trading games and the need for regular Internet connections after losing an initial face-off with the PS4.

To contact the reporters on this story: Takashi Amano in Tokyo at tamano6@bloomberg.net; Grace Huang in Tokyo at xhuang66@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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