Gates: Console battle all comes down to software

With just hours to go before Microsoft Corp. launched its Xbox games console in Japan, Chairman and Chief Software Architect Bill Gates underlined the importance of software in the success of his console and the buzz his company can create among consumers.

“The key is what people experience playing the games,” he said at a prelaunch news conference Thursday evening. “It really is the word of mouth of gamers that will drive this platform to success.”

Microsoft isn’t leaving the promotion entirely up to consumers. The company started several weeks ago a prelaunch advertising campaign on television. Tokyo’s Shibuya district, a magnet for the city’s teens and young adults has been decked out with 500 Xbox flags in preparation for the Friday morning launch. To ensure maximum splash, Gates has flown in and will, as he did in New York when the Xbox was launched in November, hand over to the first customer an Xbox console.

Like it has done in the U.S. and will do in Europe when it launches the Xbox in March, Microsoft is going up against Sony Computer Entertainment Inc.’s (SCEI) PlayStation 2 and Nintendo Co. Ltd.’s Gamecube. But here Sony and Nintendo are not just opponents, they are the home-team players and, along with Sega Corp., which left the hardware business last year, have been the long-time rulers of the game console market.

As a result, Gates and Microsoft have been paying special attention to Japan, where the Xbox will be the most expensive of the three competing consoles at