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A new push for power

Sony, Microsoft, and Nintendo flex juiced-up visions at E3 game expo

LOS ANGELES -- They're supercomputers, capable of trillions of mathematical calculations per second. They're the kinds of machines once used only to simulate nuclear explosions or create special effects for Hollywood blockbusters. But over the next year, these monster machines will start turning up in homes all over the world.

They're the next generation of home video-game consoles, now on display at E3, the world's largest computer game expo. Americans spent $6.2 billion on video-game software last year, and $3.7 billion on hardware. But those 2004 hardware sales were down 35 percent from the previous year. The big three home game consoles -- Sony Corp.'s PlayStation 2, Microsoft Corp.'s Xbox, and Nintendo Corp.'s GameCube -- are all showing their age, having come to market four or five years ago.

The 2005 E3 show is the most important in years, as Microsoft and Sony demonstrate their newest machines, the Sony PlayStation 3 and the Microsoft Xbox 360, to an audience of about 60,000 game developers, computer manufacturers, and major retailers such as Best Buy and Circuit City. Both feature custom-made processor chips far more powerful than those found in standard home computers. The resulting games feature graphics of remarkable clarity.

Jen-Hsun Wong, president and chief executive of Nvidia Corp., which developed the PlayStation 3's 3-D graphics chip, said Sony's machine would deliver ''movie-quality graphics in real time." Sony backed up the boast with some impressive demonstrations, including a rendering of the actor Alfred Molina from the film ''Spider-Man 2." A close-up of the image, blown up on a 30-foot-tall screen, was almost indistinguishable from a photograph. Previously, digital images of such clarity have taken hours to generate; the PlayStation 3 promises to draw such images instantly in the midst of a fast-moving computer game. But consumers will have to wait until next spring, when the PS3 goes on sale, to see for themselves.

Microsoft showed off the power of the Xbox 360, which debuted last week on cable channel MTV and will go on sale this Christmas season. But while Sony emphasized features that appeal to dedicated game players, Microsoft corporate vice president J Allard focused on the Xbox 360's potential appeal to the casual gamer.

In the early days of home computer gaming, said Allard, ''we used to fill the living room with kids and adults, men and women." But advanced 3-D technology had led to an emphasis on violent, fast-moving games that appealed only to a small segment of the marketplace. ''Xbox is the product that will put gaming back in the mainstream," Allard said.

The E3 show demonstrates that gaming is serious business. Microsoft could desperately use a hot product; its next-generation Windows operating system, code-named Longhorn, has been plagued by delays. Gaming has become the most profitable part of Sony's business, and new chief executive Howard Stringer aims to defend the franchise.

Microsoft's Xbox Live Internet gaming service is at the heart of the company's strategy. All Xbox 360 customers will get free access to basic Xbox Live access, allowing them to compete with other players worldwide, conduct voice chats, download new game content, and even get access to recorded music. Players will also be able to use Xbox Live Arcade, a service already available on the system that allows people to play games like poker or checkers.

By giving free access to this service, Microsoft hopes to dramatically expand the appeal of the Xbox platform, which is currently a distant number two in market share to Sony's PlayStation 2.

Microsoft said Monday that the Xbox 360 would be ''backward compatible" -- meaning it will have the ability to play games written for the current machine -- with its top-selling games. Hits like Halo 2 will work on the new console, but other less successful games may not.

Industry analyst Michael Pachter of Wedbush Morgan Securities said anything less than total backward compatibility could mean trouble for Microsoft's bid to gain ground on Sony. ''They're setting consumers up for a big disappointment in the fall," Pachter said.

And Sony executive vice president Jack Tretton was quick to point out that the PS3 will play every game ever produced for the PS2 and the original PlayStation. ''To me, that's backward compatibility," he said.

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.

Pachter said it'll be a long time before any game needs that much data. But he predicted that Hollywood studios would soon begin offering its movies on Blu-Ray disks. If so, the PS3 will become a popular way of viewing movies, just as millions of people bought the PS2 because it let them watch DVDs.

Nintendo Corp., the dominant maker of hand-held games, but number three in home consoles, wasn't ready to show off a running prototype of its upcoming Revolution console. But the company assured thousands of cheering fans yesterday that it has no intention of ceding living room domination to its rivals. When you turn on Revolution and see the graphics," said Nintendo president Satoru Iwata, ''you will say 'wow.' "

Nintendo, like Microsoft and Sony, hasn't revealed what it intends to charge for its next-generation console.

Both the Revolution and the Sony PS3 are set to debut next year, giving Microsoft a head start in the next-generation race. But Jay Horwitz, senior analyst for Jupiter Research in New York, said it wouldn't matter. He pointed out that in the two previous generations of home video games, Japanese game maker Sega was the first company out of the gate. Both products, the Jaguar and Dreamcast, failed, and Sega was driven out of the console business.

''If you look through the history of video games," said Horwitz, ''the first out the door has usually flopped pretty hard."

Hiawatha Bray can be reached at bray@globe.com.


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