MSFT and Intel rumored to be developing set top game consoles. They want to expand their market and keep their PC partners happy as they are likely to be the manufacturers. If true, sounds like a good plan.
quote.bloomberg.com.
Microsoft, Intel Working on Set-Top Game Consoles, Analysts Say
Microsoft, Intel Working on Set-Top Game Consoles, Analysts Say
Redmond, Washington, Sept. 6 (Bloomberg) -- Microsoft Corp. and No. 1 chipmaker Intel Corp. are working on technology that could allow them to partner with a computer maker to develop a stand-alone video game console, analysts said.
Microsoft, the world's largest software maker, is working on the console and other projects that would allow it to compete with Sega Enterprises Ltd., Nintendo Co. and Sony Corp. in the $15 billion worldwide video games market, analysts said.
Microsoft is developing video game technology at a time when the market is booming. Game systems are becoming more advanced than many personal computers and could become the launching pad for all interactive entertainment, including the Internet and digital TV. Sony has plans to introduce a successor to its PlayStation by 2000, which is based on digital video disk technology and offers movie-like graphics. Sega's new Dreamcast, which will go on sale in the U.S. and Europe next month, costs $200 and can be used to access the Internet. ''They have accelerated their work because the startling effects that have been demonstrated on these low-cost machines are diverting interest from PC-type games back to the console,'' said Jon Peddie, president of Jon Peddie Associates Inc., which provides market research and analysis for the computer industry.
Next Generation, a magazine for video game fans, reported that Microsoft is developing a set-top game console under the code name X-Box that would be powered by an Intel Corp. or Advanced Micro Devices Inc. computer chip that could make it as powerful as Sony's PlayStation 2 to be unveiled next year.
A Microsoft spokesman would say only that reports it was developing a game console were ''speculation'' and that the company wouldn't comment. An Intel spokesman also said the company wouldn't comment on unannounced products.
Venue for Windows CE
A new game console could be Microsoft's chance to popularize its slimmed-down Windows CE operating system, which powers everything from hand-held PCs to cable TV set-top boxes. Microsoft has been investing million of dollars in cable companies and wireless phone providers, in large part to ensure Windows CE is a key driver in next-generation set-top boxes and cell phones that allow users to surf the Internet.
For Intel, video game consoles provide another revenue source. Intel could also develop new, powerful specialized chips designed for game consoles. ''Somebody is going to control the technology that we play games and get information through,'' said Greg Fischbach, chief executive at Acclaim Entertainment Inc., which makes game software. ''If you see Sony and Nintendo (sets) as being the future set-top box, then you would see a motivation for Microsoft to do that.''
Microsoft is already the No. 4 maker of games for the PC, and may be looking more to the video game market, which grew at a rate of more than 14 percent last year and is forecast to grow to $17.2 billion in the U.S. and Europe in 2003 from $8.7 billion last year, according to Datamonitor Plc.
NYSE/AMEX delayed 20 min. NASDAQ delayed 15 min.
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