Acer’s Manufacturing Arm To Produce Xbox

In line with its previously stated strategy, Microsoft Corp. has entered into an agreement with Wistron Corp., the manufacturing arm of Acer Inc., to manufacture the Xbox video game system.

Wistron will join Flextronics as a manufacturing partner for Xbox. Earlier, Microsoft relocated its Xbox production plant managed by Flextronics from Hungary to Doumen, China, in a bid to reduce costs as competition bewteen game console systems heat up in the US and Europe.

Wistron will therefore be the second manufacturing partner for Xbox after Flextronics and will begin manufacturing the consoles in its facility located in Zhongshan, China, before the end of the calendar year. The facility will provide manufacturing services for Xbox from parts to final packaged product including parts procurement, assembly and integration, testing, and final box build.

“With the expansion of Xbox into six new countries and regions, we anticipate a hot holiday season for Xbox,” said Par Singh, director of business development for Xbox at Microsoft. “With Wistron and Flextronics on board, we are well prepared to meet the anticipated demand.”

The partnership with Wistron underscores Microsoft’s support for the development of China’s IT industry. In the memorandum of understanding signed in June with China’s State Development Planning Commission, Steve Ballmer, CEO of Microsoft, announced a US$750 million investment and cooperation agreement with the Chinese government and the IT industry (full story on asia.internet.com/briefs/article/0,3916,4141_1378291,00.htm).