Microsoft Sends Invitations for May 21 Xbox Event

Microsoft Corp. (MSFT) plans a “special unveiling” related to the Xbox, suggesting that the world’s biggest software maker use the event to introduce the latest version of its game console.

The event will be held at Microsoft’s Redmond, Washington, headquarters, according to the e-mailed invitation. It will also be shown online, via the Xbox Live service and the Spike TV network.

The software maker is planning a new version of the console to maintain its 27-month lead over Sony Corp. (6758) and Nintendo Co. in a market projected to expand to $70 billion in 2017. It’s also adding features to the Xbox designed to help it withstand the shift to games downloaded to computers and mobile devices from packaged products.

Microsoft will “share our vision for Xbox and give you a real taste of the future,” Larry Hryb, the Director of Xbox Programming who goes by the name Major Nelson, on his official Xbox blog. He said Microsoft will will continue to discuss its plans and show its games lineup in May at the E3 show in Los Angeles.

Microsoft will use an Advanced Micro Devices Inc. (AMD) processor in the next Xbox game console, seeking to cut the cost of building machines and get developers to create more titles, people with knowledge of the matter said earlier this month. Xbox has led console sales in the U.S. for the last 27 months, according to market-research firm NPD Group.

Competitor Consoles

Sony unveiled the PlayStation 4, the newest version of its own console, in February and plans to release it in time for the holiday shopping season. Microsoft had considered holding its event in April and scrapped that plan, people familiar with the matter said earlier this month. The company saw little competitive pressure from Sony’s announcement, the people said.

Nintendo’s Wii U, another competitor, has been selling below the company’s initial forecasts. In January, the company said it expected to sell 4 million units in the fiscal year ending March 31, down from a previous outlook for 5.5 million.

Traditional console makers face competition from cheaper machines like Ouya Inc.’s online gaming device, and changes in game play that favor inexpensive titles for mobile devices such as Apple Inc. (AAPL)’s iPads and Samsung’s Galaxy Tab.

U.S. retail sales of packaged video games fell 21 percent last year to $8.9 billion, according to researcher NPD Group, while revenue from games downloaded to computers and mobile devices rose 16 percent to $5.9 billion. Globally, the market including hardware and accessories was $67 billion.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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