Microsoft taking on Sony in battle of games consoles

Microsoft is to introduce the most powerful games console ever marketed to break into a multi-billion-dollar business dominated by Japan, the US group controlled by Mr Bill Gates said yesterday.

Microsoft said its new X-Box, which is still in development, would be three times as powerful as Sony's PlayStation2, which has achieved massive sales since being introduced in Japan on March 4th. In a recorded video link, Mr Gates told a news conference in Tokyo: "X-Box is a huge milestone, which has the best of the PC and the best of the console world."

Microsoft, without specifying a figure, said it planned to spend more on bringing the X-Box to market than the billions of dollars it lavished on the much-hyped marketing of Windows 95. Its long-rumoured entry into the home gaming world will pit it against Sony Computer Entertainment's PlayStation2, Sega Enterprises' Dreamcast and Nintendo's new Dolphin, due out later this year.

The X-Box would arrive on the market in autumn 2001, and would include a digital video disc player, the ability to make fast broadband Internet connections and a fast 600-megahertz central processing unit, the company said. Asked if Microsoft was coming late to the games console business, vice-president for hardware Mr Rick Thompson said the company wanted to wait to refine its next-generation technology.

Many components have yet to be made, Microsoft said, but a key plank in the new machine is a hard drive, which is lacking in rival consoles. The PlayStation2 has a plug-in memory card with limited storage space.

Although no retail price has been set, Mr Thompson said: "We will not allow price to be a barrier to our success."

The games console industry is estimated to be worth $10 billion a year, growing at 15 per cent annually, according to investment bank Merrill Lynch.

Meanwhile, Sony Corp said yesterday that some PlayStation2 consoles have malfunctioned, triggering a sharp fall in its share price.

Sony Computer Entertainment (SCE) said it had received 340 complaints from clients by Thursday about glitches with memory cards. The problem causes data or programs needed for playing digital video disks to be erased.