Microsoft insists 'Xbox is on track' as shares suffer

City investors are worried that Microsoft's forthcoming console will suffer from a lack of games if the software giant fails to get its development kit out

Microsoft has moved to reassure the gaming community and city investors that the Xbox is still on track following reports of delays.

It was reported on Wednesday that Microsoft had suffered a delay in supplying key developer tools for the console. Developers had expected to receive the beta version of the Xbox software development kit in March, but Microsoft has admitted that it hasn't supplied the software yet.

The news caused Microsoft's share price to fall nearly three percent on Thursday, with investors worried that the delay would mean that few games would be available when Xbox launches later this year in Japan and the US.

Speaking in Tokyo yesterday, Hirohisa Ohura, managing director of Microsoft, insisted that Xbox would launch on time, and accused Sony of pressuring Japanese game developers to keep quiet about their plans for the Xbox.

"We do not believe that the number of consoles or games sold in, say, the first few months, is a measurement of success," Ohura said in Tokyo yesterday, according to FT.com. A statement released by Microsoft on Thursday insisted that the company was still on track to deliver hardware and software for the Xbox launch.

The Xbox will rival Sony's PlayStation2, which was hit by shortages when it was launched last year. Microsoft hopes to ensure a successful Xbox rollout by launching initially in Japan and the US and only shipping in Europe in early 2002.

Meanwhile, computer game publishers are being hit by the concerns over possible Xbox delays. Electronic Arts (EA), the biggest video game publisher in the world, saw its share price fall nearly ten percent on Thursday. EA is expected to release around ten Xbox games in time for the official launch of the console, and it would be adversely affected if the console was delayed, or only released in limited quantities.

However, some industry observers believe that the delay in the Beta version of the software development kit is of little consequence.

One analyst told Reuters that developers would be able to complete at least 50 percent of a game without it. "We've talked to a couple of developers and they are not too concerned because they are able to meet development goals with the Alpha kit they have so far," he said.

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