BBC

Thursday, 29 March, 2001, 08:36 GMT 09:36 UK

Microsoft's Xbox goes online

Microsoft's video games system Xbox is trying to steal a lead on its competitor Sony PlayStation 2 by plugging the console into the internet.

Online gaming is already offered by Sega's Dreamcast, another one of Xbox's competitors, though production of this console will be halted by the end of this month.

Sony's PlayStation 2 has also been built with future networking and internet access in mind.

But Sony has said it will wait until broadband internet access is widely available before it equips its console with a modem.

Sony has predicted that a "broadband society" will arrive in 2005.

Japanese deal

In its internet gaming push, Microsoft has formed an alliance with the Japanese internet and telecoms company NTT Communications.

Together, the two companies will develop internet access via the Xbox, facilitate games distribution and other high-speed services, and make it possible for Japanese customers to play games over the internet.

"The key part of the deal is enabling online gaming," according to the man in charge of Microsoft's new game platform, Robert Bach.

"We will have games in which thousands of people are playing against each other or playing with each other," he said.

"We believe this new service will contribute to the popularisation of broadband [in Japan]," said NTT Communications president Masanobu Suzuki.

Big in Japan

Microsoft believes the Japanese market offers great growth potential.

"In Japan, online gaming has been relatively undeveloped," said Mr Bach.

Online gaming trials will start later this year and online services will be launched next year, said Mr Bach.

The deal with NTT is seen as part of the games makers' search for new and alternative distribution methods for their products.

"People are looking for what is going to make the next generation of online gaming, and jumping ahead is critical, said Mr Bach.

Mobile phone networking

Microsoft's rival Sony has not yet announced plans to link its PlayStation 2 with its internet service provider subsidiary.

But Sony Computer Entertainment (SCE) and Japanese mobile phone giant NTT DoCoMo recently announced plans to launch Playstation games onto mobile phones.

The idea is that owners of NTT DoCoMo's i-mode internet phone will be able to turn to their phones in spare moments to play Playstation 2 games.

And players will be able to compete with each other whether they are connected to a phone, a personal computer or a television.

"We hope to be a catalyst for the mobile network era," said SCE's Yoshiko Furusawa.

Sony mobile handsets

On Thursday, Sony announced plans to upgrade its mobile phone handset operations and focus more on mobile computing products.

The stakes in Microsoft's head-to-head battle with Sony are great: The world console market is estimated to be worth $20bn a year.

Microsoft says it will spend $500m to market Xbox in its first year.

Merrill Lynch analyst Henry Blodget believes it will cost the company $2bn to bring the Xbox to the market over the next five years before the project breaks even.

When Xbox was launched, Microsoft made much of its abilities to offer high quality graphics and, the company claimed, better game quality than PlayStation 2.

"I'm talking about an extended PC - a PC that talks to the TV set-top box, talks to the music player devices, co-ordinates with other PCs," Microsoft chairman Bill Gates said at the time.

The Xbox features four game controller ports, a DVD tray and may allow players to connect voice-activated headsets.

It has an 'X' moulded into the top of a sleek black box and a circular lime green logo fixed in the X's centre.

Microsoft claims it can deliver three times the graphics performance of its rivals.

The Xbox console is scheduled to go on sale in the United States and Japan later this year, and in Europe early in 2002.

NTT Communications is a wholly owned internet and long-distance calling service arm of the telecoms carrier Nippon Telegraph, while NTT DoCoMo is 64% owned by the group.

-- Anonymous, March 29, 2001