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Tuesday, May 11, 2004 - Page updated at 12:00 A.M.
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Electronic Arts to play online with Xbox

By Kim Peterson
Seattle Times technology reporter

KEVORK DJANSEZIAN / AP
Workers put the finishing touches on a display yesterday for the Sony PlayStation booth at the Electronics Entertainment Expo in Los Angeles.
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LOS ANGELES — Just a year ago, the biggest video-game developer teamed up exclusively with Sony's best-selling game system to develop online sports titles — dealing Microsoft's Xbox a very public snub.

But now it appears Electronic Arts (EA) has learned a thing or two from Xbox's new marketing slogan: It's good to play together.

The game developer and Microsoft announced yesterday they have made peace and plan to release about 15 titles, including several sports games, that are compatible with the Xbox online gaming service, called Xbox Live.

The companies made the announcement at Microsoft's Xbox news briefing at the Shrine Auditorium, kicking off the Electronic Entertainment Expo video-game convention, or E3.

The games, to be released this year, include Madden Football 2005, the successor to the best-selling game of last year. Also expected is the sequel to the popular "Need for Speed: Underground" title and a new game in the "Goldeneye" series.

KEVORK DJANSEZIAN / AP
Mike Micros works on "The Incredibles" display in the Buena Vista Games booth. The video-game industry's annual trade show is in Los Angeles this week.
The announcement is of huge significance for Microsoft, which had 750,000 subscribers for its Xbox Live service at the beginning of the year and is trying to build up that base to at least 1 million by June.

"We wanted EA from Day One," said Cameron Ferroni, general manager for Xbox Live. "It's always been both of the companies' goals to find an agreement that works for us. We're thrilled."

None of the games is exclusively for the Xbox, which would have been a bigger coup. EA still intends to produce titles for Sony's PlayStation 2, with whom it announced an exclusive partnership at last year's E3 to develop online sports titles.

Electronic Arts already has developed an extensive library of Xbox games.

Chip Lange, a vice president for marketing at EA, said the decision to work online with Microsoft in addition to Sony was not a result of a change of heart.

"These are two very smart companies, and this is a new business," he said. "Nobody was going to rush into doing anything."

In the past year, Lange said, Electronic Arts has been working out its online game structure and business model. Microsoft was doing the same thing, he said, and both companies came to an agreement.

"At a 50,000-foot-level, it really looked like we were far apart awhile ago," Lange said. "Then we started really digging down. As you started really kicking the tires, we weren't that far apart."

The news had been expected in the video-game world, particularly after Microsoft said it would not produce many of its own online sports games this year. But Ferroni said that move was not related to the EA partnership.

"We basically just took a look at the market this Christmas and realized the best thing we can do with these sports titles is take a year off," he said. Such moves are typical for game developers, he added.

Analysts said yesterday the news was big for Microsoft.

"Score one for Microsoft," said P.J. McNealy, an analyst with American Technology Research. "They needed to be aggressive to drive the Xbox Live subscribers, and having EA on board will certainly help."

Other analysts speculated that the company's cancellation of its own sports titles this year sweetened the pot for EA. The game developer is known to be a tough negotiator, and some said it's likely the company demanded significant compensation for partnering with Microsoft. Financial terms were not announced.

"EA is one of those companies, they're able to bargain a lot," said David Cole, an analyst with DFC Intelligence. "Microsoft pulling their sports games, that's a pretty big sweetener."

Microsoft did not give away any details about its next-generation video-game console. To do so would generate enthusiasm but also undermine sales of the current Xbox console. The new console is expected sometime next year.

Instead, the company focused on the games it would debut this year and announced a Nov. 9 sale date for "Halo 2," the highly anticipated sequel to its best-selling title.

Microsoft also showed highlights from "Doom 3" and "Full Spectrum Warrior," two titles that will be exclusively for Xbox.

On the software side, Microsoft said it is working on a program that will allow Xbox Live users to conduct up to four video chat sessions.

The new technology, which requires Web cameras, is expected to be initially rolled out in Japan.

McNealy said the program is a sign Microsoft wants to innovate and expand the Xbox audience.

Microsoft wants first to put the Xbox in every household with a PlayStation 2, McNealy said. Next it wants to go after those without either system.

The company also announced an arcade for Xbox Live, where customers can pay about $10 to download simpler, more casual games such as "Bejeweled." Game developers Atari and Namco have committed to producing titles for the arcade.

Kim Peterson: 206-464-2360 or kpeterson@seattletimes.com

Copyright © 2004 The Seattle Times Company

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