Microsoft Enters The Arcade Business: Welcome To The X-Zone
We're still four months from the launch of Microsoft's Xbox game console, but the company is already making inroads into another lucrative sector of the gaming business: arcades. Though conventional arcades have been in decline for several years now, a new segment of the industry is seeing its fortunes grow: the "fusion arcade", a concept that fuses arcades, restaurants, and even elements of theme parks to provide an all encompassing entertainment experience that focuses on more adult clientele. Sega has been pushing their "Sega Gameverse" arcades for the past four years, and now there are over 80 locations in North America. And upstart companies like Dave and Buster's have seen healthy profits as well. Enter Microsoft and their X-Zone concept. The facilities will include both arcade games and restaurant areas, but will also include theaters and virtual reality experiences as well. If that sounds an awful lot like Blockbuster's "Block Party" concept, you'd be right. In fact, Microsoft has made a deal with Blockbuster to purchase the Block Party concept and all of its locations, and plans to convert them into X-Zone locations by this fall. Before Blockbuster sold all the Block Party locations to Microsoft, there were 14 in existence, including locations in Los Angeles, Albuquerque, Indianapolis, and Brandon, Florida. Microsoft also plans to open four additional centers by next spring, bringing the total number of X-Zone facilities to 18, with even more planned if the concept is successful.
The company plans to revamp the Block Party facilities somewhat, to make room for more areas for people to play Xbox games. The Power Grid, a large-scale maze similar to the play areas found in Discovery Zone locations, but geared toward adults, will be removed in order to clear room for other attractions, though in some locations, Microsoft plans to create a laser tag arena-based game to promote its upcoming IP, The Covenant. Dubbed "The Covenant Experience", the attraction will pit teams of players against one another in a live-action combat simulation where they will have to take sides in the conflict depicted in the game. According to Microsoft, X-Zone facilities will hold regular Xbox tournaments for cash and prizes, and locations will give visitors the opportunity to play certain Xbox games up to two weeks before release. In fact, Microsoft has already announced that an exclusive Divine Wrath 2 arcade machine will be released only to X-Zone a month before the game is set to release on the Xbox console. The grand opening for X-Zone is set for November 1st, where a special Xbox preview party is set to be held at all locations, giving players a first chance to enjoy Xbox launch titles including The Covenant, Project Gotham Racing, and Grand Theft Auto. While arcade business as a whole may be in decline, these fusion arcades, if successful, could end up being a crucial battleground in the console wars.
-from an article in the August 2001 issue of Wired magazine
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The news that Microsoft had made a deal to acquire the software company Psygnosis, best known for releasing games such as Klepto and Wipeout, and most recently Future Fear: Escape The Arena, came as a shock to many gamers, given the company's close relationship with Sony. But for those who knew how aggressively Microsoft has been courting game makers, it wasn't much of a surprise. The company has been reported to have sent out feelers for companies like Naughty Dog and even game powerhouse Acclaim, and though Microsoft didn't get either of those (it's reported that the company was particularly interested in Naughty Dog's Tales Of The Seven Seas and Valor IPs, and intended to turn the latter into a first person shooter), the company is still sitting pretty as far as exclusives go, with a host of popular franchises locked up for the forseeable future. That includes the popular fighting game Divine Wrath, whose sequel is coming to the Xbox next year, and John Romero's Daikatana. And now, with the Psygnosis acquisition, the next installments of the popular Klepto and Wipeout franchises will be making their way to the Xbox soon.
"We're really excited to be working with Psygnosis and they're excited to be making games for our machine," said Microsoft's Robbie Bach, when we asked him about some of the recent exclusivity deals his company has made. "They've got a great concept for the new Wipeout game, which really looks great even in the alpha stage. And they've also got a concept for an exciting new FPS, but we won't be seeing that until 2003."
Microsoft is keenly aware of the growing popularity of FPS games and their particular popularity with online players. It's said that they lobbied hard for The Covenant to be an FPS, though were convinced to allow Bungie to make it a third-person shooter after the success of Squad Four: Rebellion, considered by many to be the best video game of 1999.
"Of course we want to have a hit first person shooter. Sega's beaten us to the punch a bit with Quake III Arena, but we'll be getting a version of that, and we're also really excited about Deep Black, which is being released in the Xbox launch window. And then there's Turok Evolution, which comes with Xbox exclusive levels, including for online, so we'll have the best version of that game as well."
We asked Bach if he was disappointed that Microsoft wasn't able to buy out Acclaim and secure exclusivity for Turok, but he declined to answer.
"We're not going to comment on rumors or speculation, all that I'm going to say is that no matter what, Microsoft will be the best system for online FPS titles, now and in the future."
Bach was much more excited to discuss the concept of game exclusivity as it pertains to the Xbox.
"We feel that the most important factor in a console's success is being able to secure the best exclusives. We want to have experiences that you won't get anywhere else but the Xbox, and we're hoping that we can use those games to bring in new players and show them everything Microsoft's Xbox has to offer."
-from an article in the August 2001 issue of GameInformer magazine
-
"We are launching two of our most important product releases ever within one month of each other. Windows XP and the Microsoft Xbox are going to completely revolutionize what we're doing here at Microsoft. We're going to change the way that people live, work, and play, just as we've been doing for almost two decades now. I cannot emphasize enough the importance of making it clear to our potential customers that our products are going to improve their lives. Windows XP will change the way that people use their computers, making them faster, more powerful, and most importantly, easier to work with. It is a complete change from the ground up, a revolutionary step above Windows 95, 98, and ME. And then with the Microsoft Xbox, we're coming into people's living rooms in a way that we've never done before, not even with WebTV. Not only will we be bringing true PC-quality gaming into people's homes for the very first time, but we'll also be bringing to people a new way to watch their favorite movies, as, for a lot of people, the Xbox will be the first DVD player that many people own, much in the same way that our competitors at Nintendo provided many families with their first CD player with the Super Nintendo CD. Just as Nintendo and Sony made billions of dollars from bringing games and multimedia together in one package, we will take that concept and evolve it with the Microsoft Xbox. Between Windows XP and the Microsoft Xbox, we are going to have our most successful year ever. And that, my friends, is the Power of X."
-from Bill Gates' "Power Of X" keynote speech at a July 12, 2001 Microsoft shareholders' meeting
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Blockbuster Launches Online Video Rental Service
Blockbuster Inc. has announced the launch of their "Blockbuster @ Home" online video rental service, which will begin offering titles as early as September of this year. The company has been reluctant to dip their toes into the online rental business, especially after services such as Netflix and Reelship have posted losses. Netflix, which Blockbuster declined to purchase earlier this year for $130 million, seems to have survived the burst of the dot-com bubble and is slowly gaining in monthly subscribers, while Reelship went bankrupt in March and was acquired by Netflix for $24 million. Blockbuster is hoping that its larger video library and corporate infrastructure will allow the company to post profits shipping titles out to subscribers. Blockbuster, like Netflix, will not be offering individual film rental, but will offer plans in both subscription and block-based formats, where people can pay a certain amount of money to rent a certain amount of films. Customers can return films rented via the service either in the mail or at their local Blockbuster locations. So far, no plans have been made to offer video games as part of the service, but the company has announced that they are looking into offering games some time next year.
-from an article on Yahoo! Business News, posted on July 17, 2001
We're still four months from the launch of Microsoft's Xbox game console, but the company is already making inroads into another lucrative sector of the gaming business: arcades. Though conventional arcades have been in decline for several years now, a new segment of the industry is seeing its fortunes grow: the "fusion arcade", a concept that fuses arcades, restaurants, and even elements of theme parks to provide an all encompassing entertainment experience that focuses on more adult clientele. Sega has been pushing their "Sega Gameverse" arcades for the past four years, and now there are over 80 locations in North America. And upstart companies like Dave and Buster's have seen healthy profits as well. Enter Microsoft and their X-Zone concept. The facilities will include both arcade games and restaurant areas, but will also include theaters and virtual reality experiences as well. If that sounds an awful lot like Blockbuster's "Block Party" concept, you'd be right. In fact, Microsoft has made a deal with Blockbuster to purchase the Block Party concept and all of its locations, and plans to convert them into X-Zone locations by this fall. Before Blockbuster sold all the Block Party locations to Microsoft, there were 14 in existence, including locations in Los Angeles, Albuquerque, Indianapolis, and Brandon, Florida. Microsoft also plans to open four additional centers by next spring, bringing the total number of X-Zone facilities to 18, with even more planned if the concept is successful.
The company plans to revamp the Block Party facilities somewhat, to make room for more areas for people to play Xbox games. The Power Grid, a large-scale maze similar to the play areas found in Discovery Zone locations, but geared toward adults, will be removed in order to clear room for other attractions, though in some locations, Microsoft plans to create a laser tag arena-based game to promote its upcoming IP, The Covenant. Dubbed "The Covenant Experience", the attraction will pit teams of players against one another in a live-action combat simulation where they will have to take sides in the conflict depicted in the game. According to Microsoft, X-Zone facilities will hold regular Xbox tournaments for cash and prizes, and locations will give visitors the opportunity to play certain Xbox games up to two weeks before release. In fact, Microsoft has already announced that an exclusive Divine Wrath 2 arcade machine will be released only to X-Zone a month before the game is set to release on the Xbox console. The grand opening for X-Zone is set for November 1st, where a special Xbox preview party is set to be held at all locations, giving players a first chance to enjoy Xbox launch titles including The Covenant, Project Gotham Racing, and Grand Theft Auto. While arcade business as a whole may be in decline, these fusion arcades, if successful, could end up being a crucial battleground in the console wars.
-from an article in the August 2001 issue of Wired magazine
-
The news that Microsoft had made a deal to acquire the software company Psygnosis, best known for releasing games such as Klepto and Wipeout, and most recently Future Fear: Escape The Arena, came as a shock to many gamers, given the company's close relationship with Sony. But for those who knew how aggressively Microsoft has been courting game makers, it wasn't much of a surprise. The company has been reported to have sent out feelers for companies like Naughty Dog and even game powerhouse Acclaim, and though Microsoft didn't get either of those (it's reported that the company was particularly interested in Naughty Dog's Tales Of The Seven Seas and Valor IPs, and intended to turn the latter into a first person shooter), the company is still sitting pretty as far as exclusives go, with a host of popular franchises locked up for the forseeable future. That includes the popular fighting game Divine Wrath, whose sequel is coming to the Xbox next year, and John Romero's Daikatana. And now, with the Psygnosis acquisition, the next installments of the popular Klepto and Wipeout franchises will be making their way to the Xbox soon.
"We're really excited to be working with Psygnosis and they're excited to be making games for our machine," said Microsoft's Robbie Bach, when we asked him about some of the recent exclusivity deals his company has made. "They've got a great concept for the new Wipeout game, which really looks great even in the alpha stage. And they've also got a concept for an exciting new FPS, but we won't be seeing that until 2003."
Microsoft is keenly aware of the growing popularity of FPS games and their particular popularity with online players. It's said that they lobbied hard for The Covenant to be an FPS, though were convinced to allow Bungie to make it a third-person shooter after the success of Squad Four: Rebellion, considered by many to be the best video game of 1999.
"Of course we want to have a hit first person shooter. Sega's beaten us to the punch a bit with Quake III Arena, but we'll be getting a version of that, and we're also really excited about Deep Black, which is being released in the Xbox launch window. And then there's Turok Evolution, which comes with Xbox exclusive levels, including for online, so we'll have the best version of that game as well."
We asked Bach if he was disappointed that Microsoft wasn't able to buy out Acclaim and secure exclusivity for Turok, but he declined to answer.
"We're not going to comment on rumors or speculation, all that I'm going to say is that no matter what, Microsoft will be the best system for online FPS titles, now and in the future."
Bach was much more excited to discuss the concept of game exclusivity as it pertains to the Xbox.
"We feel that the most important factor in a console's success is being able to secure the best exclusives. We want to have experiences that you won't get anywhere else but the Xbox, and we're hoping that we can use those games to bring in new players and show them everything Microsoft's Xbox has to offer."
-from an article in the August 2001 issue of GameInformer magazine
-
"We are launching two of our most important product releases ever within one month of each other. Windows XP and the Microsoft Xbox are going to completely revolutionize what we're doing here at Microsoft. We're going to change the way that people live, work, and play, just as we've been doing for almost two decades now. I cannot emphasize enough the importance of making it clear to our potential customers that our products are going to improve their lives. Windows XP will change the way that people use their computers, making them faster, more powerful, and most importantly, easier to work with. It is a complete change from the ground up, a revolutionary step above Windows 95, 98, and ME. And then with the Microsoft Xbox, we're coming into people's living rooms in a way that we've never done before, not even with WebTV. Not only will we be bringing true PC-quality gaming into people's homes for the very first time, but we'll also be bringing to people a new way to watch their favorite movies, as, for a lot of people, the Xbox will be the first DVD player that many people own, much in the same way that our competitors at Nintendo provided many families with their first CD player with the Super Nintendo CD. Just as Nintendo and Sony made billions of dollars from bringing games and multimedia together in one package, we will take that concept and evolve it with the Microsoft Xbox. Between Windows XP and the Microsoft Xbox, we are going to have our most successful year ever. And that, my friends, is the Power of X."
-from Bill Gates' "Power Of X" keynote speech at a July 12, 2001 Microsoft shareholders' meeting
-
Blockbuster Launches Online Video Rental Service
Blockbuster Inc. has announced the launch of their "Blockbuster @ Home" online video rental service, which will begin offering titles as early as September of this year. The company has been reluctant to dip their toes into the online rental business, especially after services such as Netflix and Reelship have posted losses. Netflix, which Blockbuster declined to purchase earlier this year for $130 million, seems to have survived the burst of the dot-com bubble and is slowly gaining in monthly subscribers, while Reelship went bankrupt in March and was acquired by Netflix for $24 million. Blockbuster is hoping that its larger video library and corporate infrastructure will allow the company to post profits shipping titles out to subscribers. Blockbuster, like Netflix, will not be offering individual film rental, but will offer plans in both subscription and block-based formats, where people can pay a certain amount of money to rent a certain amount of films. Customers can return films rented via the service either in the mail or at their local Blockbuster locations. So far, no plans have been made to offer video games as part of the service, but the company has announced that they are looking into offering games some time next year.
-from an article on Yahoo! Business News, posted on July 17, 2001