Microsoft Sets Xbox One Release as Sony Faceoff Awaits

Microsoft Corp. (MSFT) plans to release the Xbox One video-game console on Nov. 22, a week before Black Friday, and said it increased the number of units available for its holiday faceoff against Sony (6758) Corp.

Consumer demand spurred Microsoft to speed production after retailers sold out of pre-order allotments, said Yusuf Mehdi, chief marketing officer for the Redmond, Washington-based software maker’s interactive entertainment division. Sales this year will top the debut of the current Xbox 360, he said, declining to discuss specifics.

“We’re building more consoles for day one and for the holidays than we’ve ever done,” Mehdi said in a telephone interview. “It is on track to be the biggest launch by a wide margin, much bigger than what we did for Xbox 360.”

Microsoft and Sony are betting that faster machines allowing for features such as motion capture and immersive graphics will entice consumers whose tastes are shifting toward mobile games played on tablets and smartphones. Microsoft, which is buying Nokia Oyj (NOK1V)’s handset unit, is stregthening a push into hardware as demand weakens for programs such as Windows that made it the world’s largest software maker.

Microsoft also has increased the speed of the Xbox One’s central processing unit to 1.75 GHz, 10 percent more than previously targeted, Mehdi said.

“You are now able to have even better fidelity of the games,” Mehdi said. “The system itself will work much faster.”

Console Prices

Retailers began taking orders for the $499 Xbox One and Sony’s coming PlayStation 4 in June. Last month, Grapevine, Texas-based GameStop Corp. (GME) raised its profit forecast, citing strength in console orders.

Microsoft, the top U.S. seller of consoles for more than two years, will debut the Xbox One a week later than the $399 PS4, which hits American stores on Nov. 15. Nintendo Co. (7974) last week cut the price of the Wii U by $50 to $299. The console, introduced last year, has missed company sales targets.

Black Friday, the day after Thanksgiving, is the traditional start to the shopping season in the U.S., with retailers offering discounts to draw customers.

Microsoft will release the Xbox One in 13 countries all on the same day, giving it a week’s head start in Europe, where the PS4 starts selling on Nov. 29. Sony will reach stores in 32 markets this year.

Microsoft, which initially targeted 21 countries for its debut, last month cut the number to 13 to ensure larger markets have sufficient supplies.

NFL Highlights

Michael Pachter, an analyst with Wedbush Securities in Los Angeles, expects Sony to sell 3 million consoles this year and 12 million in 2014, compared with 2.5 million and 10 million, respectively, for Microsoft.

Microsoft fell 4.6 percent to $31.88 yesterday in New York, after announcing that it’s spending 5.44 billion euros ($7.2 billion) to buy Nokia’s devices and services unit. The shares have climbed 19 percent this year.

Xbox One is an attempt to merge television watching with video game playing, Mehdi said. Microsoft has teamed with partners including the National Football League to offer features such as viewing highlights and game scores.

Microsoft has no plans to offer pay-TV channels in competition with established providers, nor to spin off the video-game unit, Mehdi said. Xbox One is part of a companywide strategy to offer multiple devices to consumers, he said.

That strategy was underscored by the acquisition Nokia’s handset business. The unit accounted for more than half of the revenue for the Espoo, Finland-based company, according to data compiled by Bloomberg.

“We know we live in a multi-device world,” Mehdi said. “The people between 18 and 30 -- 80 percent of them are looking at a phone or tablet while watching TV.”

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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