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March 18, 2006

Dog bites man: Ballmer says Xbox will capitalize on PS3 delay

Posted by David Hunter at 7:31 PM ET.

Sony’s stumble with the PS3 release draws a not unexpected comment from Microsoft CEO Steve Ballmer:

“In every other generation, the first guy to 10 million consoles was the number one seller in the generation,” Ballmer told FORTUNE in an interview on Thursday afternoon. “Did we just get an even better opportunity to be the first guy to 10 million? Yeah, of course we did.”

But Microsoft (Research) will not formally revise its projected market share for the Xbox 360, and it will not speed up production to capitalize on Sony’s delay, because it’s already producing the Xbox as fast as possible. “We’ve been saying ‘make them faster’ before yesterday,” says Ballmer.

More interesting is what he had to say about current Xbox status:

There is still a production bottleneck because of problems with a component vendor, whom Ballmer declined to name, but he expects Microsoft to sell 5 million systems by June. “We’re sort-of on track,” he says, “though it would’ve been nice at Christmas to have one for everyone who wanted one.”

Microsoft plans “major pushes” of the Xbox 360 in France, Italy, Spain and Japan — markets where the first generation Xbox didn’t perform as well as Microsoft hoped.

“I am palpably optimistic,” Ballmer says. “I think we are absolutely in the game for the market position it would be nice to have.”

Ballmer dismissed Sony’s expectation that Playstation’s Blu-Ray DVD player will give it an advantage over the Xbox, which will soon offer an HD-DVD peripheral. “Sony’s going to try and define that as a fundamental battleground, but I don’t think it is a fundamental battleground,” he says. “I don’t care whether it’s Blu-Ray or HD-DVD, there’s not going to be a lot of content in either format this year.”

Very sensible. If, as is generally believed, Sony delayed the PS3 because of Blu-ray problems, they are pursuing fools gold, not to mention that their Blu-ray drive is a very expensive standard feature.

Filed under Blu-ray, Coopetition, Executives, HD DVD, Hardware, Microsoft, Sony, Steve Ballmer, Xbox

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