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December 18, 2002—In this issue:
1. NEWS AND VIEWS
- Massachusetts, West Virginia Want Slice of the Microsoft Payment Pie
- Xbox Sales Surge
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1. NEWS AND VIEWS
(contributed by Paul Thurrott, firstname.lastname@example.org)
The two US states that are still appealing the sentencing decision in the Microsoft antitrust trial have asked Judge Colleen Kollar-Kotelly to order the software giant to pay their legal expenses. Microsoft previously contacted the nonsettling states and informed them that it would pay legal expenses for any states that chose not to appeal the sentencing. However, Massachusetts and West Virginia did appeal, and now they want to be reimbursed for more than $2 million in legal expenses. The states approached the judge after Microsoft told them that it wasn't interested in covering those expenses.
"This is money these two states would have received had they not decided to pursue an appeal," Microsoft spokesman Jim Desler said yesterday. "Maybe we'll see whether this is an issue the court needs to resolve." Maybe we will. But Massachusetts Attorney General Tom Reilly has also asked Judge Kollar-Kotelly not to make a decision until after the appeal is finished because the outcome of that appeal could significantly increase the states' fees and expenses.
Ultimately, whether Microsoft is required to pay the states' legal fees is up to Judge Kollar-Kotelly. Massachusetts says it has paid more than $2.05 million in fees; West Virginia has paid about $271,000.
Microsoft said yesterday that sales of its Xbox video-game console have surged in the past 30 days, an indication that the system might be gaining ground on competitors such as the Sony PlayStation 2 and Nintendo's GameCube. In a letter to analysts, the company said that it sold 468,000 Xbox units in November—nearly double the number sold the previous month. The company also reported sales of 2.4 million Xbox software titles, with five titles topping the 100,000 units sold mark. Finally, Microsoft reported sales of more than 136,000 Xbox Live Starter Kits; the kit lets Xbox users play games online with people around the country.
Nevertheless, market leader Sony posted numbers that, predictably, leave Xbox in the dust. The company reported sales of more than 1 million PlayStation 2 units "in the first couple of holiday shopping weeks" alone and said that it will sell more than 400,000 units of its network adapter, which is required for online games, by the end of the year. Sony says that US retail sales of all video games have exceeded $6 billion so far this year, with another $4 billion expected by year's end. That $10 billion figure represents an almost unbelievable 25 percent increase over last year's record figure of $9.4 billion.
Incidentally, the third major player in the video game market, Nintendo, has yet to report any holiday sales figures. However, analysts expect the company to meet or beat Microsoft's figures.
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