Microsoft denies reports of Xbox delay

Microsoft denies reports that its Xbox gaming system will be late to market

In this story: 'Right on track' Japan is skeptical RELATED STORIES, SITES

By Kristie Lu Stout
CNN.com Writer

TOKYO, Japan (CNN) -- Microsoft says its Xbox video game console is still on target for a fourth quarter release, disputing news reports and industry rumblings of a delay.

The Financial Times reports that Microsoft is behind schedule in software development kit shipments to third party developers, including 70 Japanese game designers. Such a delay would push back the console's release.

Microsoft is countering the report and says the Xbox is on target for a northern autumn release, with its support for gaming developers still "right on track." But gaming companies in Japan remain skeptical.

The Xbox is Microsoft's high-profile bid to enter the lucrative video game market currently dominated by Sony's PlayStation 2. The software giant says it will devote $500 million to promote the console in its first year on the market.

'Right on track'

Microsoft maintains that the game player will go on sale in the northern autumn, with a specific launch date to be announced next month at the Electronic Entertainment Expo (E3) trade show.

"We are still right on track to deliver hardware and software for a launch in fall of 2001," says Microsoft's director of sales and marketing, John O'Rourke, in a statement.

"Our developer support and release process is also right on track. Since last September, we've been telling developers that we'd deliver the beta Xbox Development Kit (XDK) units before E3, and we're still on schedule."

The Financial Times article says final developer kits, which allow other companies to create hardware and software for the Xbox, were delayed, likely pushing back the console's release.

Japan is skeptical

Industry rumblings in Japan also suggest that the Xbox will miss its release roll-out.

"The gaming companies I've talked to here remain skeptical. They haven't received the gaming kits," says Zachary Liggett, a Tokyo-based gaming analyst with West LB.

"It could miss Christmas here in Japan at least because of an inadequate software lineup by fall. A couple of months delay couldn't be unexpected."

With its gaming console debut, Microsoft is desperately trying to avoid the hold ups that hampered Sony's U.S. launch of the PlayStation 2. Only half of the total gaming units promised by Sony hit American retail outlets last holiday season.

The markets punished gaming companies after news of the potential Xbox delay. The leading games publisher Electronic Arts (EA) took a 9 percent fall Wednesday to $48-3/8. Japan gaming stocks so far have been spared.

"As for Tokyo, the software developers have not really been affected compared to the EA fall," says Liggett.

"The companies here have been very careful about announcing the numbers of titles or units expected because they got burned with the PlayStation 2 last year."

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