Microsoft smartphones might not lure video gamers

Mon Oct 11, 2010 3:51pm EDT
 

By Liana B. Baker

NEW YORK (Reuters) - Microsoft Corp's plan to offer its Xbox Live games service on its new smartphones may not be enough to woo even the most avid video gamers to its latest attempt to stay relevant in the mobile phone business.

Microsoft unveiled its Windows 7 phones on Monday, touting the phone's connection to Xbox Live, the online subscription service that some 25 million owners of the Xbox 360 video game console pay about $60 a year for so they can play multiplayer games online.

Some analysts are skeptical that the phones' tie-in with the Xbox will be enough to lure gamers to the phones.

"There's some harmony here with the Xbox, but will people really buy these phones for the games?" said Mike Hickey, a Janco Partners analyst.

Microsoft needs more exclusive game content to set the phone apart from the flood of games already available on phones that run on Google's Android software and Apple's iPhones, analysts said.

Electronic Arts, one of the largest video game publishers, said it would develop mobile games for the new Microsoft phones, which can be connected to users' Xbox live subscriptions. Players can accumulate points on their Xbox accounts by playing the EA games.

While EA's games come from its popular mobile brands such as "The Sims" and "Need for Speed: Undercover," many will resemble those that exist on other phone platforms.

On the new phones, users get access to their Xbox accounts, but will not be able to play console games like "Halo."

Microsoft must connect the phones to these console games to give it the boost it needs to rival mobile competitors, said Janney Montgomery Scott analyst Sasa Zorovic.

Still, Zorovic said, "It's very clever that Microsoft is providing this dedicated community of 25 million people with something compelling as a hook for them to migrate them to the new phones."