02:10 PM PST on Monday, November 21, 2005

Associated Press

BELLEVUE, Wash. - Xbox fans are already lining up outside the Best Buy store in Bellevue for the midnight release of the highly-anticipated Xbox 360, and they'll be rewarded by a rare appearance from Microsoft founder Bill Gates.

Gates is expected to arrive at 11 p.m. Monday night, and he'll play a few rounds with the fans after handing out the first Xbox 360.

Wal-Mart, Circuit City and Target also plan to sell consoles at all locations Tuesday, but all of the stores are warning that they expect to sell out quickly.

Microsoft has said it plans to sell 3 million of the new $399.99 Xbox 360 consoles worldwide within 90 days of its launch. The company said it is producing Xboxes as fast as it can. But it has conceded that an ambitious plan to launch the console worldwide within a few weeks -- rather than staggering releases over months and months, as is typical -- will mean fewer consoles initially in North America. A slimmed-down version without a detachable hard drive and wireless controller will sell for $299.99.

Apart from its high-definition graphics and gaming aptitude, the device offers users other capabilities: the ability to listen to music, view photos, watch DVDs and play electronic puzzle and card games.

"The supply problems are there in as much as the demand is unbelievable," said Peter Moore, a corporate vice president in charge of marketing for the Xbox.

But he denied production problems and dismissed "conspiracy theories," including that the company is purposefully bottlenecking supply to intensify interest.

"None of those are true whatsoever," he said.

Best Buy plans to open some stores at midnight for elaborate launch events, and all of the company's stores -- including those that sold consoles at midnight -- will open at 9 a.m. with consoles available.

Wal-Mart also is planning to sell consoles beginning at midnight, but only at stores that are already open 24 hours. Circuit City, Costco and Target say they will begin selling the consoles when their stores open for business at the regular time Tuesday.

Circuit City spokeswoman Amanda Tate said the retailer plans to hand out vouchers on a first-come, first-serve basis and will put a "sold out" sign up so people don't waste their time waiting. She said not to expect too many consoles at each store on launch day.

"I would like to say hundreds, but in actuality it's dozens," she said.

Costco Wholesale Corp. will have consoles available at some stores, but don't expect elaborate launch events like those planned at some Best Buy locations. Rick DeLie, Costco's vice president for toys, said he's hoping that consumers just stumble happily upon them.

"We're a treasure hunt," DeLie said. "Do we want people lining up outside our doors? No."

Amazon.com Inc. is sold out of Xbox 360s, but company spokeswoman Tracy Ogden said the online retailer expects to be able to get consoles to those who pre-ordered them relatively quickly. Ogden would not say when the company planned to again begin taking orders.

GameStop and EB Games, both units of GameStop Corp., plan to open hundreds of stores at midnight to welcome the console -- but don't show up expecting to get one. The company is only handing out actual consoles to customers who pre-ordered months ago, and spokesman Chris Olivera said even some people who pre-ordered more recently may not see a console until early January. The company hopes to sell games and other add-ons at the midnight event.

For everyone else, Olivera is recommending that perhaps they consider another system, like the first Xbox or rival Sony Corp.'s PlayStation 2, will do.

Microsoft's Moore said most people who want an Xbox 360 immediately probably already have other consoles, so he's not worried about losing business to older machines.

As for those who might be left empty-handed on launch day, he said: "The only thing I can tell those folks is that supply will continue to come in, and ultimately demand, I'm sure, will start to slow down a little."