++A Must Read++ Athlon to be used in MSFT's GameBox !!
That would create a huge demand for Athlon!
++++++++++++++++++++++++++++++++++++
With Sony in Its Sights, Microsoft
Weighs Entry Into Game Machines
By DEAN TAKAHASHI
Staff Reporter of THE WALL STREET JOURNAL
Microsoft Corp., determined to head off Sony Corp. in the battle to
control digital entertainment, is considering a move that could shake up the
video game market, industry executives said.
Microsoft may pour billions of dollars over four years into developing and
promoting a home video game console, code-named X-Box, said one
person who has been briefed on Microsoft's plans. Microsoft's proposed
machine, a hybrid akin to a PC that plugs into a television to play games, is
expected to be manufactured to the company's specifications by PC
makers or subcontractors.
In a bid to steal the spotlight from Sony's
forthcoming Playstation 2 system, the new
Microsoft game system is expected to go on
sale in the fall of 2000, the industry executives
said. Sony's Playstation 2 is expected to be
launched in Japan in March and in the U.S. in
the fall of 2000. It isn't clear when Microsoft
plans to announce the new system.
The Playstation 2 is the focus of a multibillion-dollar investment by Sony
and could become potent competition for consumer PCs that use
Microsoft software and also digital boxes on top of TV sets, such as
Microsoft's WebTV system. Sony's machine will be able to run
high-quality three-dimensional animations, play digital video disks, connect
to the Internet and store data in accessory hard disk drives. The new
Microsoft console is expected to play standard PC games, also with
movie-quality animations.
The brewing battle between the two companies reflects a growing
convergence of industries, as game systems grow up to be full-fledged
computers and PCs try to break into the living room. With all of
Playstation 2's new capabilities, Microsoft is believed to be worried about
possible defections by PC-game developers, some of whom could shift
plans for new products to the Playstation 2.
"Microsoft needs to make a statement to keep the game developers and
PC consumers loyal," said Rick Doherty, an analyst at Envisioneering
Group, a Seaford, N.Y., consulting firm. "Everyone can see there are 60
million Playstations out there and 20 games apiece that go with them. Sony
has proven that the video game business model works tremendously."
A Microsoft spokesman and Sony spokeswoman declined to comment.
Whether Microsoft's box would be marketed by the company under its
own brand name, that of manufacturing partners or both isn't clear.
Executives at software makers and PC manufacturers said they have been
briefed by Microsoft on the X-Box but knew of no hardware companies
that have decided to make or sell it.
It is possible that Microsoft, which has mounted abortive efforts to get into
home entertainment devices before, could back away from the idea. In
August, one Microsoft executive, who requested anonymity, said X-Box
may be killed because of the "opportunity to lose hundreds of millions of
dollars in the hardware business." Still, Microsoft has continued to pursue
the project.
At an expected price of about $299, the X-Box seems based on the
premise that fast-falling prices of PC components can offer more bang for
the buck than Playstation 2. The Microsoft features may include a DVD
player, a hard disk drive and extra circuitry suited to fast-moving games
and connections to a TV set display.
A software executive Monday described the device as "a console machine
with PC innards." People familiar with the situation say Microsoft has
decided against using microprocessor chips from Intel Corp., the
company's longtime partner in PCs, and is strongly considering using
Advanced Micro Devices Inc.'s Athlon microprocessor. Athlon promises
comparable performance to Intel's fastest chips at a significantly lower
price. Officials of AMD and Intel declined to comment.
The Microsoft machine also is expected to use a graphics processor called
GeForce, from Nvidia Corp., a Santa Clara, Calif., chip maker. A Nvidia
spokesman declined to comment.
Instead of a conventional PC operating system, Mr. Doherty believes that
X-Box will use a new hybrid of Windows 98 and a variant of Windows
NT that Microsoft designed for non-PC applications. Notably absent is
Windows CE, a widely promoted operating system for hand-held
computers and other devices that is being used by Sega Enterprises Ltd. in
its rival to Playstation 2, the Dreamcast device.
Updating Machines
One key difference between the X-Box and PCs is that the X-Box's basic
components and features won't be modifiable. In the PC business,
consumers can update their machines with add-ons that software
developers target with new products.
On the other hand, game developers might have an easier time developing
for the X-Box since the specifications aren't expected to change
constantly. Moreover, such a machine could become much easier to use
than a traditional PC, said Omid Rahmat, a games analyst at Doodah
Marketing in San Rafael, Calif.
The potential competition with Sony has been building for months. Ken
Kutaragi, president of Sony Computer Entertainment, has touted the
upcoming Playstation 2 not as a simple video game machine but as a
connected device that can handle Web surfing, electronic commerce and
other chores and that is easier to use than a PC. In one recent speech, Mr.
Kutaragi said Sony's future lies in "networked digital entertainment."
One person briefed by Microsoft said the company hasn't taken Sony's
possibilities lightly. "The X-Box is a frontal assault on a very big threat," he
said.
Publicly, Microsoft games managers have noted that PC and video games
appeal to two different audiences. Most video games are played in groups
in the living room, while most PC-game action takes place closer to users'
faces. About a third of U.S. households own game consoles, compared
with about half owning PCs. But the PC share of the market has been
steadily declining during the past couple of years.
Building a fourth major contender in the game business -- alongside Sony,
Nintendo Co. and Sega -- would require a huge marketing effort. Sega,
for example, remains a distant third despite $100 million in U.S. advertising
for Dreamcast. One industry executive said Microsoft has considered
earmarking as much as $6 billion for its effort, but another person close to
the company said that figure is incorrect.
At one point, Microsoft Chairman Bill Gates was expected to reveal the
project next month, at his keynote speech at the Comdex computer trade
show, where Sony CEO Noboyuki Idei also is speaking. But other people
briefed by Microsoft said the company won't announce until next year. |
