Pacific Northwest Microsoft will start selling a cheaper model of the Xbox 360 video-game machine in Japan to woo gamers there, the company...

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Microsoft will start selling a cheaper model of the Xbox 360 video-game machine in Japan to woo gamers there, the company said Monday.

The entry-level offering goes on sale March 6 for about $260, about a fifth less than the least expensive Xbox 360 now costs in Japan. The stripped-down version went on sale in the U.S. last year for $279.99.

The Xbox 360 has been struggling in Japan against rivals Wii and PlayStation 3 from Japanese manufacturers Nintendo and Sony, respectively.

Microsoft doesn’t give a regional breakdown but says it has sold 17.7 million Xbox 360 machines globally. Nintendo has already sold more than 20 million of the newer Wii worldwide. Sony has sold 10.5 million PS3 machines worldwide.

Tokyo-based Enterbrain, which publishes game magazines and tracks video-game sales, says only 257,800 Xbox 360 consoles were sold in Japan last year, in contrast to 1.2 million PS3s and 3.6 million Wiis.


Manufacturers get Vista service pack

Microsoft said it sent a major package of upgrades and fixes for Windows Vista, its latest operating system, off to manufacturers for mass production on Monday.

The software maker said Vista Service Pack 1, or SP1, improves reliability, security and performance.

The upgrade, to be available in March, will go first to business customers with volume licensing deals.

Many of the fixes have already been released as part of regular monthly updates in the year since the operating system went on sale to consumers.

Windows Server 2008 was also released to manufacturing Monday and will be available to new customers March 1. Existing owners of Windows Server licenses will be able to download the software at the end of February.


Starbucks exec named to board

Safeco has appointed Gerardo Lopez as a director and member of the board’s audit committee.

Lopez, 47, is president of Starbucks Global Consumer Products and Food Services Group and chief executive of Starbucks’ Seattle’s Best Coffee retail operation.

He will stand for election at Safeco’s annual meeting May 7.

Jones Soda

Compensation set for interim leaders

Jones Soda will pay interim Chairman Scott Bedbury and interim Chief Executive Stephen Jones each $15,000 a month for December, January, February and March, the Seattle company said in a regulatory filing.

The men will also receive options to buy 20,000 shares of common stock exercisable when the company hires a full-time CEO or on April 30, whichever comes first.

Lovefilm to acquire European DVD arm

Seattle-based online retailer and DVD-rental subscription company Lovefilm International said Monday that Lovefilm will acquire Amazon Europe’s DVD-rental business in the U.K. and Germany.

As part of the transaction, Amazon Europe will also make a cash investment and become the largest shareholder in Lovefilm International. Amazon Europe will also promote Lovefilm on its sites for British and German customers.

Financial details of the transaction were not disclosed, and the deal must pass regulatory scrutiny in Britain and Germany to be completed, Lovefilm said in a statement.


More e-mail security added

Google is adding more e-mail security and storage products for businesses, sharpening its aim on a Microsoft stronghold while the competition between the two rivals also heats up in Internet search and advertising.

The tools to be introduced today build upon technology Google acquired last year when it bought e-mail specialist Postini for $625 million.

The package of products is designed to weed out junk mail and potential viruses as well as protect against leaks of confidential information sent through e-mail.

Google also is offering to retain e-mail data for longer periods.

All the latest features are compatible with Microsoft Exchange as well as Lotus Notes and Novell Groupwise. Prices will range from $3 per user to $25 per user, depending on how much protection and data retention a customer wants.

Google’s push into business software, launched in 2006, looms as a threat to Microsoft, which derives much of its profit from the sale of its more expensive Office suite.

Yum Brands

Rising costs cause minor slip in profit

Yum Brands, which operates the KFC, Taco Bell and Pizza Hut chains, said Monday its fourth-quarter profit slipped less than 1 percent as strong sales in its China and international divisions mostly countered the impact of higher costs.

Net income edged down to $231 million from $232 million in the same period a year earlier. At 44 cents, earnings per share were up from 42 cents in 2006 because the results were based on 28 million fewer shares outstanding.

Revenue rose 8 percent to $3.26 billion from $3.02 billion in the fourth quarter of 2006.

Analysts polled by Thomson Financial had expected, on average, earnings of 42 cents per share on revenue of $3.14 billion.

The company said costs rose 9 percent to $2.93 billion from $2.69 billion last year. That increase was mostly offset by sales growth in the company’s mainland China division.

Shares fell $1.24, or 3.5 percent, to $34.57 in after-hours trading Monday, having ended the regular session at $35.81, up 57 cents.

Commerce Department

More factory orders placed at year’s end

U.S. factories saw demand for their products rise in December by the largest amount in five months, a spot of welcome news that failed to change the picture of an economy struggling to stay afloat.

The Commerce Department reported Monday that orders placed with U.S. factories rose by 2.3 percent in December. That was an improvement from the 1.7 percent gain posted in November and marked the biggest increase since July.

For all of last year, total orders — durable and nondurable goods — placed with U.S. factories increased by just 1.4 percent. It was the worst performance since 2002, when the economy was struggling to recover from the 2001 recession. In 2006, factory orders rose by 5.1 percent.

News Corp.

Improved results net strong earnings

Improved results from the Fox broadcast network and Fox News Channel lifted second-quarter earnings at Rupert Murdoch’s News Corp., outweighing lighter returns from movies and TV production, the media conglomerate reported Monday.

News Corp., which bought Wall Street Journal publisher Dow Jones & Co. in December, earned $832 million in the final three months of 2007, up 1 percent from the $822 million it earned in the same period a year earlier.

The results for News Corp.’s second fiscal quarter were equivalent to 27 cents per Class A share, in line with estimates of analysts polled by Thomson Financial.

Compiled from The Associated Press, Dow Jones Newswires and Seattle Times business staff