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October 27, 1999

Microsoft X-Box Redux

By CBR Staff Writer

Microsoft Corp is planning to spend $6bn over four years on developing its X-Box console, which we reported on yesterday. According to reports in the British press, the company is already briefing key hardware and games software developers on the new machine at its campus in Redmond, Washington.

The console will see Microsoft going head-to-head with established console vendors such as Sony Corp, Nintendo Co and Sega Enterprises Ltd. As it becomes obvious that the scope of the next generation consoles extends beyond mere games and they are set to become online service and entertainment delivery channels into the home, Microsoft is developing a hardware platform which will allow it to become a player. The company also has a vested interest in keeping games developers – who may otherwise defect to the PlayStation 2 and Nintendo – on a Microsoft platform, even if that doesn’t happen to be a PC.

The X-Box which is expected to hit the streets at the end of next year, around the same time as the Sony machine, but before Nintendo’s Dolphin, will be based around an Intel Corp CPU and the GeForce 256 graphics chip from Nvidia Corp. We expect that Microsoft will use the operating system that it is developing for set-top boxes and other internet appliances, code-named Neptune, which has a lot of multimedia streaming capabilities. The device may also incorporate design ideas ripped from the PC2001 and Easy PC projects that Microsoft and Intel are collaborating on, such as a stripped down no legacy internal architecture and beefed up USB support.

The X-Box will be priced at around $299 on its launch. Sony expects that its new PlayStation will drop below $200 when it hits volume production. However, the entire model for selling these boxes may change if they are sold as an advanced set-top box, with cable companies bundling entertainment and e-commerce services with the hardware for a subscription fee. Sony has already said that it regards pay-to-play downloaded games, music and films and other media content as a major revenue generator for the company. á

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