To best meet initial demand for the Microsoft(r) Xbox(tm) video game system around the world, Microsoft Corp. today announced key elements of its Xbox manufacturing and logistics plans. Under the plans, the company will bolster distribution capabilities by working with Flextronics International Ltd. to establish Xbox manufacturing facilities in several regions of the world.

Microsoft also confirmed its plans to launch Xbox in North America and Japan in fall 2001 and in Europe in the first quarter of 2002, carefully staging the rollout of Xbox so that demand can be met in each region.

Flextronics will initially establish and manage regional Xbox manufacturing operations in Mexico and Hungary. Noted for its flexibility, quality and speed in manufacturing consumer electronics products, including Microsoft's other hardware products, Flextronics has demonstrated its ability to deliver premium full-service global manufacturing projects. In addition, Microsoft's long-term plan is to open a manufacturing facility in Asia to support markets in that region, including Japan.