Money Matters - Simplified

Big guns getting ready to battle for market share in gaming

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The three biggies in gaming arena, Microsoft, Sony and Nintendo have announced their plans of launching next gen machines over next one year, with Microsoft having an edge of being early entrant. Microsoft will be the first one to launch its Xbox 360.

Nintendo’s Revolution will face stiff competition from the Xbox 360 and Sony’s PlayStation 3 as the makers vie to attract a more diverse audience with products that serve as digital-entertainment hubs instead of just serving up video games.

All three new consoles will be "backward compatible" to varying degrees, meaning owners of the new systems will be able to play at least some of the games created for the existing Nintendo GameCube, Microsoft Xbox and Sony PlayStation 2.

Nintendo went a step further, announcing that Revolution’s built-in wireless Internet will provide downloadable access to thousands of games in the firm’s 20-year-old library, going back to the original Nintendo Entertainment System.

What the Revolution will look like remains a bit of a mystery. Nintendo showed off a black prototype box with a blue, front-loading disc drive as well as a picture of several possible color schemes, ranging from silver to bright yellow. The final box reportedly will be about the size of a stack of three DVD cases.

Details on Revolution’s high-tech innards are far less specific than what is being provided by Microsoft and Sony. Aside from the included Wi-Fi networking, the Revolution will have wireless controllers, two USB 2.0 ports and slots for DS memory cards. Nintendo did not say anything about the processor or graphics chips that will be used to power the machine, other than that they are being developed by IBM and ATI Technologies.

With Xbox 360 and PS3, meanwhile, snazzy technology able to deliver cinema-quality graphics and sound has been the center attraction.

Xbox 360 will have three speedy processors and a custom graphics chip from ATI, a removable 20-gigabyte hard drive and wireless capability for cable-free access to the company’s Xbox Live online multiplayer service.

Xbox Live is at the heart of Microsoft’s strategy. All Xbox 360 customers will get free access to basic Xbox Live features, letting them compete with other players worldwide, conduct voice chats, download new game content and even get access to recorded music. Microsoft hopes such free access will expand the appeal of the Xbox platform, which is currently a distant number two in market share to Sony’s PlayStation 2.

And while Xbox 360 can play movies, music and television, it won’t replace the desktop computer as an ideal nerve center for such content, Microsoft said. The company has announced an extender for its Media Center operating system that allows users to stream media from the desktop onto their Xbox 360.

The PS3 will boast Cell processors, jointly developed by Sony with IBM and Toshiba, that are purportedly 10 times faster than current-generation computer processors.

Microsoft kicked off controversy over the issue of backward compatibility, saying the Xbox 360 would initially work only with "our top-selling games." That means hit titles such as "Halo 2" will run on the new console, but other games won’t — at least for a while.

Sony was quick to note the PS3 will play every game ever produced for the PS2 and the original PlayStation from the outset.

The Sony and Microsoft systems differ in another key respect. While Microsoft will continue to use a DVD drive in the Xbox 360, the PlayStation 3 will embrace the new Blu-Ray laser-disk system. This technology uses blue laser light to read disks, instead of the red lasers used in CD and DVD drives. Because blue light has a smaller wavelength, Blu-Ray disks can hold far more data than a DVD — up to 50 gigabytes.

But beyond all the techno-lingo, important details for consumers — including price and game costs — still haven’t been announced. The Xbox 360 is due around Thanksgiving, followed by the PS3 next spring and the Revolution sometime next year.

In 2004, the PlayStation 2 led the U.S. console wars with 43 percent of the market, according to Jupiter Research. The original Xbox claimed 19 percent, followed by Nintendo’s GameCube at 14 percent. The remainder included handheld game systems.

PlayStation 2 had 966 games at the end of 2004, including games Xbox doesn’t have, such as "Final Fantasy," and initial rights to the top-selling "Grand Theft Auto" series. Xbox has 582 games, including the "Halo" series.

Nintendo’s surprise announcement was a tiny redesigned Game Boy Advance called Micro, available this fall for an undisclosed price. The silver pocket device, about the size of an iPod Mini, doesn’t provide any new technology, Nintendo said.

"This is just another kind of edgy element that we’re adding to the mix," Nintendo of America spokeswoman Perrin Kaplan said.