February 22, 2000 4:15 PM PST

Microsoft may talk up X-Box next month

Microsoft chairman Bill Gates may disclose his company's plans to participate in the game console market soon, but analysts cautioned that any statements are likely to be long on promise and short on details.

Gates may unveil plans for the X-Box, a game-console project based around PC technologies, when he delivers a keynote speech at the Game Developer's Forum in San Jose, Calif., on March 10, according to various published reports. This event happens a few days after the Tokyo debut of Sony's anticipated PlayStation2 console. The X-Box announcement could also take place at Seattle's coming GameStock convention, other sources have said.

Microsoft has been meeting with hardware makers and game publishers since at least last October to drum up support for the X-Box project.

But, while Microsoft can typically corral support for its technology projects, don't expect to see much tangible progress just yet, analysts say. Most computer companies and software makers are waiting to see how well the PlayStation2 does before committing resources to Microsoft's project, sources said. Reference platforms of the X-Box might exist, but any sort of production, or exact system specifications, likely won't be forthcoming. X-Boxes won't even hit the streets until late next year, assuming the project stays on track.

"We believe that every vendor that has met with them has said they want to wait until after the Sony PlayStation2 comes out," said Richard Doherty of The Envisioneering Group. "All the people that have been meeting with Microsoft have been saying they can't commit."

A speech by Gates, if for no other reason, may occur only to slow down the tidal wave of momentum building for the PlayStation2. Sony will release its anticipated game console on March 4 in Japan and bring the box to the United States later in the year. Sony has already said it expects to sell a million units within the first 48 hours. Sony said it was getting 500,000 orders per minute when it set up a Web site for selling the PlayStation2.

"(The X-Box) is just FUD (fear, uncertainty and doubt) directed at the PlayStation2," said Peter Glaskowsky, an analyst with MicroDesign Resources. "It exists to show that PlayStation2 is not the only way to play games."

The PlayStation2 could prove to be a fairly hearty competitor. The system features a new processor, called the Emotion engine, that only comes with that game console. Demonstrations of the system have largely been greeted with loud applause by gamers and software developers. The box comes with a DVD player and features broadband Internet access, Doherty said. Nintendo's Dolphin, meanwhile, will come out this year as well.

The X-Box, Glaskowsky said, appears to be a PC with a fancy name.

"The problem with the X-Box is that you could print some labels and sell one today," Glaskowsky said. "It is just a PC with a specific set of capabilities."

So far, Microsoft's efforts to get into the console market have met with limited success. Earlier, Sega planned to adopt Windows CE as one of the primary features of its Dreamcast console. By incorporating Windows CE, Sega could ensure that its console would be compatible with games designed for the PC. The inclusion of Windows CE would also allow console users to run PC-like programs and surf the Web.

Windows CE, however, has become the vestigial tail nub on the Dreamcast platform. Dreamcast can run Windows CE, said Doherty, but few take advantage of it.

 

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