X marks the spot for Microsoft


Microsoft plans to go head-to-head with three giant Japanese corporations, Sony, Sega and Nintendo, for the games console market. Leading games companies have already started developing for the system, which is based on PC technology, and which will go on sale in the US in about 18 months.

In all, Microsoft claims the console, codenamed X-Box, will deliver about three times the performance of Sony's PlayStation 2, which went on sale in Japan earlier this month. J Allard, general manager of the X-Box platform, reckons it will "blow people's socks off".

The console represents a change of strategy for the American software house, which has previously supplied operating systems that other companies could use in their hardware. The X-Box will be a Microsoft branded product, and will conform to games console industry business practices, not PC industry approaches. The specification will be fixed at launch, not subject to continuous changes and upgrades, like PCs.

Allard says: "We're not confused: this is a single-function device entirely focused on the games market." Like the Sony PlayStation 2 and forthcoming Nintendo Dolphin, it will also play DVD movies and music CDs. However, John O'Rourke, director of marketing in Microsoft's gaming division in Seattle, says: "We are positioning the X-Box 100 per cent as a games console. We can't try to be another multi-purpose device. We have to focus on creating great games."

The X-Box is basically derived from a general-purpose device: the PC. But, as Mr Allard points out, "the X-Box will not be compatible with PC games", and PCs will not be able to run X-Box games. The X-Box will be a closed proprietary system with its own peripherals, such as control pads, and will be sold at a competitive (low) price. Profits will come mainly from sales of games - and developers will have to license rights to publish games for the system, as they do with rival consoles.

There should be no shortage of software, because the system is based on the DirectX software interface already used by about 97 per cent of Windows games. Mr Allard reckons it will be simple for companies to develop PC and branded X-Box versions of games with just the "finishing off" stage being different.

Electronic Arts, the biggest independent games software house, is interested in X-Box games. Acclaim, Activision, Eidos, Hasbro, Infogrames Konami, Namco and Titus have announced their support.

A graphics expert, Mr Jez San, chief executive of a British games developer, Argonaut Games, is enthusiastic: "It will be out a year after the PlayStation 2 so you'd expect it to be better, but it's very good for the entire industry: a bit of stability in a PC-style games machine is hugely beneficial."

The X-Box - which Bill Gates unveiled at a game developers conference in San Jose last Friday week - also represents big wins for Intel and nVidia. The processor will be derived from a 600MHz Intel Pentium III, with Intel snatching the business from rival AMD the day before the announcement. The graphics chip will be supplied by nVidia. Mr Gates says it will be able to do a trillion operations a second, which will make photo-realistic games possible.

The X-Box will run a stripped down version of Microsoft's robust Windows 2000, with the bulk of the operating system on games discs, interfacing with a stub of code built into the X-Box. Mr Allard says there will be no boot-up process, and the operating system will be invisible to users.

To support complex PC-type games, the X-Box will have a built-in hard drive - a first for the console market. It will also have a 100 megabit Ethernet network port. This will enable users to link machines for network play, or connect to broadband communications networks via ADSL phone lines or cable modems.

Microsoft has made a deep study of the console market, and thinks it has the formula. Further, Mr Allard says Microsoft is prepared to spend the money necessary to establish the system. "The budget we have is astronomical. The launch of Windows 95 is going to look like a whisper compared with what we are going to do on the X-Box."

If the company has a weakness, it's that it has not been very good at creating games. It doesn't have properties like Nintendo's Mario and Donkey Kong, or Sega's Sonic the Hedgehog . "Why is XBox going to be successful?" asked Mr Gates. "The answer is simple: it will have better games. That's what this business is all about, that's what the customers want."

Microsoft thinks its ace is that most game developers are already familiar with DirectX and will be able to produce great games quickly. But unless it and its allies can come up with something special in the next 18 months, the X-Box is not going to fly.

The X-Box website is at www.xbox.com.

A transcript of Bill Gates's launch speech is a www.microsoft.com/billgates/speeches/03-10gdc.htm

Garret Rowe is on leave.