Microsoft goes head to head with Sony in battle for games market

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The Independent Online

MICROSOFT'S BID to dominate the digital revolution has the software giant on the verge of investing several billion dollars to launch a new home video console, in a move to head off Sony, the electronic games industry leader.

MICROSOFT'S BID to dominate the digital revolution has the software giant on the verge of investing several billion dollars to launch a new home video console, in a move to head off Sony, the electronic games industry leader.

Since Monday, Microsoft has been briefing leading software developers and hardware manufacturers at the company's Redmond, Washington, headquarters about its plans to develop and market a home video game console, code-named X-Box, according to industry executives present.

The proposed console, understood to be planned as a hybrid between a PC and a video console that would be plugged into a television to play games, would be manufactured according to Microsoft specifications.

The move comes as Sony is gearing up to launch its Playstation 2 system in Japan next spring, and in Europe and North America next autumn.

Industry executives said Microsoft could spend $6bn over four years to gain a foothold in the fast growing multi-billion pound video-games market.

That would be consistent with Bill Gates, Microsoft's chairman and chief executive's strategy to expand beyond its PC base to provide software for digital devices ranging from palm-top computers to mobile phones and digital TV set-top boxes. From no presence a year ago, Microsoft has emerged as the second largest investor in Britain's cable sector and earlier this month linked with BT to develop equipment standards and services for mobile phone Internet applications for consumers around the world.

"They've been able to influence consumer electronics with Windows CE software, so they have growing confidence they could introduce a game console," said Rich Doherty, an analyst with Envisioneering Group, a US consulting firm.

"There's a window of opportunity for a game console, since Playstation 2 and Nintendo Dolphin, won't launch until next summer."

The head on clash with Sony has been building for months. Recently Ken Kutaragi, of Sony Computer Entertainment, has described Playstation 2 as a video game machine that can perform Web surfing, electronic commerce, store information in its periphal hard drive and is easier to use than a PC.

Although PC games are available, the lack of consistency of computer platforms has seen consumers opt for consoles made by Sony, Nintendo and Sega. The rate of growth of console sales has been surpassing that of PCs in recent years.

Last night, Microsoft refused to comment. "Nothing has come out of this conference on a game console or X-Box at all," said a spokeswoman.

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