Xbox 2 could take 30% market share - EB President

Industry bosses speaking at the Piper Jaffrey conference in New York have sounded notes of cautious optimism about Microsoft's next-generation plans, with EB president Jeff Griffiths saying that the system could win 30 per cent market share.

"Yes, they could get a 30 per cent share, " Griffiths told the conference, speaking about the Xbox 2 console which is widely expected to launch by late 2005. "I think if they got less than that they'd be disappointed. If they come out earlier than Sony, if they have the breadth of exclusive titles like Sony had for PS2, I think they'd definitely have potential for market share leadership."

While it's obviously positive that key industry executives such as Griffiths believe that the Xbox 2 could share leadership in the next generation, his statement has a number of important caveats - particularly in terms of Microsoft's ability to deliver on exclusive titles as Sony has.

"I think Microsoft is being more aggressive," agreed THQ CEO Brian Farrell, but like Griffiths, he too qualified his optimism heavily. "Can they gain share?" he asked, "Yes. Do they have to have a solid value proposition? Yes. Do they have to have aggressive marketing? Yes."

The aggressive marketing, at least, is almost guaranteed - reports within the industry suggest that Microsoft has earmarked a marketing spend for Xbox 2 which is twice as large as the massive above the line campaign for the original console.

Xbox 2 is expected to launch well ahead of its competitors from Sony and Nintendo, with the new console potentially arriving at US retail by the middle of 2005 - having slipped past Microsoft's original highly aggressive target of Christmas 2004.

Although many in the industry expect the Redmond-based software giant to grow its market share of the games industry significantly in the next generation, some industry bosses have expressed concern at the prospect of having to support both Xbox 2 - a next generation platform with a small installed base - and PlayStation 2, a current generation system with a massive installed base - for a number of years, as cross-development between the two platforms will be extremely difficult, if not impossible.