MICROSOFT TO LAUNCH GAME PLATFORM

DAN ALAIMO

SAN JOSE, Calif. -- Move over Sony, Nintendo and Sega, a big new player is moving into the video game market.

Bill Gates, chairman and chief software architect at Microsoft Corp., Redmond, Wash., said this month at the Game Developers Conference here that the company will launch a video game platform in late 2001. The device is now code named, "X-Box." Intel Corp., Santa Clara, Calif., will make the processor for the new platform.

"Building on our strengths as a software company, X-Box will offer game developers a powerful platform and game enthusiasts an incredible experience," Gates said. "We want X-Box to be the platform of choice for the best and most creative game developers in the world."

For retailers, this means more decisions to make in terms of video game rental inventory, but also more opportunities as consumers sample the new systems, industry observers said. For example, many retailers saw rental revenue increases with the introduction of Sega Dreamcast last year, and many also expect success with the Sony PlayStation 2 next year, despite problems reported in Japan following its launch there this month. Nintendo also has a new platform in the works, but it may not be ready until 2001, according to industry sources.

Microsoft reportedly is entering the video game market out of concern that the Sony PlayStation 2, with its DVD-playing and Internet capabilities, will become a "Trojan horse" in the home for new technologies, leaving Microsoft-based products behind. The Microsoft game system will also include these features.

"The PC has always been the design center for high-end entertainment because of the unlimited graphics power and the great tools that make programming easier," said Robbie Bach, vice president of Microsoft's Games Division. "Our developer partners are excited to apply Hollywood design techniques to creating superior X-Box games," he said.

According to Microsoft, among the features of the new game system will be:

Realistic gameplay based on Intel Pentium III processor technology and the X-Box hard drive.

More than three times the graphics performance of competitive machines. A custom-designed graphics chip will deliver more than 200 million polygons per second.

Broadband internet connectivity will extend the game experience.

The new platform will have support among third party game publishers. "We view Microsoft's entry into the console business as an important and positive event for our industry," said Larry Probst, chairman and chief executive officer of Electronic Arts, Redwood City, Calif.

"We welcome the development of the new X-Box platform because we expect it will help the home game console industry expand," said Kagemasa Kozuki, chief executive officer of Konami Co. Ltd., Redwood City, Calif. "We plan to organize an X-Box development team and release new titles for the platform before anyone else. We hope that X-Box will be a successful platform and will help the game console industry grow further."