A whole new ball game

Microsoft has been accused of playing games on a number of market fronts over the years, but this time the company says it's true.

Making its global reputation on its operating systems and aggressive Internet strategy, the Redmond, Washington, behemoth is now moving onto yet another turf, one that's far from its word-processing roots. Unbeknownst to many general consumers, Microsoft is moving with increasing speed into the gaming world alongside Sega, Nintendo, and other market leaders.

Flight Simulator

In the latest reflection of this strategy, Microsoft (MSFT) announced its first equity investment in a games developer, Single Trac, this week. That followed its acquisition of Bruce Artwick Organization, the original developer of Microsoft's popular Flight Simulator game, late last year.

And between those two market moves, the company unveiled 11 new game titles at the Electronic Entertainment Expo in May, compared to its usual annual rollout of two or three new titles. Already, Microsoft has two titles in the top-20 rankings, and other game companies are prepared for more. (See chart)

"We recognize a certain percentage of market share will go to Microsoft," said Ken Williams, chief executive officer of Sierra On-Line, the number-one publisher.

So what's driving the software behemoth to bring a bigger bat to the playing field at this time? And will it annihilate the players along the way, as it has threatened--and has done--to so many other competitors.

Hellbender

Industry analysts say Microsoft is seeking to exploit its brand name and market distribution channels to make room for itself in the gaming arena. Although some die-hard gamers are sure to resist the intrusion out of loyalty to their favorite companies, Microsoft is undeterred, banking on its ability to attract newcomers familiar with its label, if nothing else.

Microsoft is hoping to extend the market leverage of Windows 95 to more gaming products. At the same time, the "dedicated console" market saw sluggish sales as buyers waited for new platforms going from 16-bit to 32-bit systems, said Dean Lester, a product unit manager in Microsoft's games division.

Not to mention the booming games and PC markets.