TOKYO, MARCH 11: Microsoft headed into the livingroom battle zone on Friday, unveiling the "X-box" videogame console with which it will challenge market leaders Sony and Nintendo. "The X-box will be a huge milestone for Microsoft and the entire game industry," Microsoft chairman Bill Gates told a Tokyo news conference in a recorded video.It did not display an actual model of the machine, but showed various graphics illustrating its capabilities.The US software giant will make its entry into the $ 20 billion worldwide videogame market in the autumn of 2001, vying with Nintendo's new 128-bit "Dolphin" game machine, to be launched late this year, and Sony's "PlayStation2" system, which went sale last Saturday.Despite impressive hardware, analysts are sceptical about the prospects for the X-box. "It may be too late. By the time Microsoft introduces the X-box, there will already be millions of PlayStation2 users," said Yoshio Imanaka, a Commerz Securities analyst."Although it may succeed in grabbing some market share from Nintendo, Sony seems likely to remain the winner in the gaming market."The X-box has a 600 megahertz processor, 64 megabytes of Ram, and an advanced 3D Graphics chip. It will be able to play digital video discs (DVDs) and to connect to the Internet, similar to the PlayStation2."The X-box will have more than three times the graphics performance of the latest game consoles, which will offer game enthusiasts an incredible experience," Microsoft Vice President Rick Thompson told the news conference.Nomura Securities analyst Mari Yada said: "The hardware specifications in PlayStation2 and X-box are both similarly astonishing. The only major difference is that X-box has a built-in eight gigabyte hard drive, which will help in offering exciting on-line games."Microsoft did not disclose a retail price or sales target,but analysts expect the X-box will sell for around $300, against Sony's 39,800 yen, or around $370.Sony, the king of the game machine market, has sold over 70million PlayStation consoles since its first launch in late 1994. Late last year it had a 67 percent share in the world videogame market, with Nintendo at 29 percent and Sega Enterprises Ltd, maker of the "Dreamcast", at three percent.But Sony's share price tumbled six percent on Friday after itsaid it was investigating complaints of glitches in PlayStation2.Meanwhile, analysts believe the X-box is hindered by beinglate to market. Nomura's Yada, however, said: "Microsoft has a chance to succeed if it attracts major software houses so as to be able to offer a wide selection of fun games". "The company may have to give very reasonable conditions suchas cheaper royalty fees and developing tools for software publishers," she said.Microsoft's move was generally welcomed by Japanese game software makers, who worry that Sony is becoming too powerful in the industry."A well-known creative company with abundant cash like Microsoft can make something very exciting which could weaken Sony's grip," an official at major software company said.Microsoft said leading software developers such as Japan's Konami Co Ltd, US-based Electronic Arts Inc and Acclaim Entertainment Inc AKLM. have expressed enthusiasm about creating games for X-box. "The birth of a new platform will give a further boost to the global home videogame market," Kagemasa Kozuki, president of Konami, Japan's second-largest game software maker.
