Focus Enhancements, a designer of proprietary video technology for the computer and television industries, has developed the FS454 TV-Out chip for Microsoft's Xbox, to assist in Microsoft's continuing effort to reduce the cost of its next generation video game system. In May 2001, Microsoft and Focus Enhancements began an OEM development program to produce low-cost TV-Out technology with fine text capabilities that would fit into the existing Xbox configuration, as part of a cost reduction effort. Todd Holmdahl, general manager, Xbox Hardware believes that the cost-effective TV-Out chip will help Microsoft "better compete in this hotly contested, price sensitive market." Xbox (US$199) has two main competitors, Sony's Playstation2 and Nintendo's GameCube, currently priced at US$199 and US$149, respectively. The FOCUS FS454 chip includes 4 DACs and has patented scaling and 2D adjustable flicker filter technology, enabling excellent visual quality for games and text rendering. The new ASIC uses a 0.18 micron process, which costs less, has lower power requirements and generates less heat than prior technologies. "Microsofts Xbox division set extremely high standards for this development project," said Tom Hamilton, EVP and general manager of Focus Semiconductor Group. "On a very tight schedule, we developed our studio quality video chip and integrated it into Xbox while reducing costs, without impacting the previously established console design footprint. The FS454 chip is expected to provide immediate, as well as long term cost benefits for Xbox." No word on how this new chip technology will affect the Xbox price, and no target date has been set for the release of Xbox with the FS454 chip, although it should be "sometime this year ," according to a Focus representative. In April 2002, Microsoft slashed prices of the Xbox in Europe and Australia from 479/£300 and A$650 (approx. US$460 and US$355) to 299/£199 and A$399 (approx. US$290 and US$217). They followed suit in the U.S. one month later, reducing the cost of the set-top from $299 to $199. Xbox is also available in Japan at a cost of 34,800 yen (approx. US$290).