Later today in San Jose, California, Bill Gates will announce plans to go head-to-head with Japan's Sony Corporation for the games console market. Gates is speaking at a game developers conference, but Microsoft's console - code-named X-Box - has already been unveiled in Japan and in Europe, because of time differences.
At the European launch at the Hempel Hotel in London this morning, Microsoft said its console was designed to deliver three times the performance of the Sony PlayStation 2, which went on sale in Japan on March 4. The X-Box will not reach the market until the autumn in 2001.
Microsoft also committed to spending the kind of money needed to attack the console market, which is currently being contested mainly by three Japanese suppliers, Sony, Sega and Nintendo.
J Allard, general manager of the X-Box platform and Microsoft's "Minister of Fun", said: "Microsoft will come out with a branded product and a clear marketing message, and the budget we have is astronomical. The launch of Windows 95 is going to look like a whisper compared with what we are going to do on the X-Box."
The X-Box is based on PC technology including a 600MHz Intel Pentium processor, an Nvidia graphics chip, 3D audio sound, and an 8 gigabyte hard disk drive - the first hard drive to appear in a games console. The operating system - which will be invisible to the user - will be based on Microsoft's latest Windows 2000 and Windows' DirectX games software, though the system demonstrated was running Windows 98.
Allard said the machine had three times the power of Sony's PlayStation 2, which has just gone on sale in Japan, and would "blow people's socks off".
However, the business model is taken directly from the games console market. Like rival machines, the X-Box will be a proprietary design with a fixed specification. It will be manufactured under contract and sold under the Microsoft brand label, not made by a variety of PC manufacturers such as Compaq, Dell, and IBM.
Allard said Microsoft had looked at the possibility of licensing the design but - from the failure of earlier attempts such as the 3D0 console and Philips' CDi (Compact Disc Interactive) - felt this approach would not work in the console market.
The X-Box will not run games written for PCs, and X-Box games will not run on PCs. The two types of device will be kept completely separate. However, games developers will be able to create one game for both machines with only the "finishing off" being different.
"We're not confused: this is a single-function device entirely focused on the games market," said Allard.
Like other console manufacturers, Microsoft plans to sell its machines at a minimal profit, and rely on sales of games to make money.
Microsoft has been selling games for 20 years, starting with a Decathlon sports game for the Apple II, but has not so far had much success in that market.
John O'Rourke, Microsoft's director of games marketing, said Microsoft remained "totally committed to PC gaming" and would increase its efforts in the PC games market, as well as supporting the X-Box.
