Microsoft, NTT in Net gaming alliance

Microsoft's Xbox gaming system will be released in Japan within six months

In this story: Net-ready by 2002 Tackling the PlayStation 2 RELATED STORIES, SITES

By Staff and wire reports

TOKYO, Japan -- Microsoft has unveiled an alliance with NTT Communications to introduce networked gaming on its new Xbox gaming system.

"The key part of the deal is enabling online gaming," says Robert Bach, chief Xbox officer in charge of Microsoft's new game platform.

Net access for the Xbox is a key feature that the world's top software company hopes will give its new game machine an edge against Sony's popular PlayStation 2.

Net-ready by 2002

The Xbox will be released in Japan this northern autumn.

Trials of online gaming services using broadband high-speed Internet connections will begin this year and online services are set to be launched in 2002, says Bach.

In a statement, the companies say that Microsoft would be able to offer services using NTT Communications' ADSL (asymmetric dedicated subscriber line) Net access service, which allows data to be carried at 10 to 100 times the speed of conventional services.

Microsoft shares last closed at 55-9/16, or down 4.6 percent. That mirrors the Nasdaq's fall as fears have grown over whether the recent global rebound in technology stocks could be sustained.

Tackling the PlayStation 2

Although Sony released its next-generation PlayStation 2 game machine almost a full year ago, it has yet to announce a strategy to link it with the Internet.

"People are looking for what is going to make the next generation of online gaming, and jumping ahead is critical," Bach says.

"In Japan, online gaming has been relatively undeveloped," he added, hinting at the online gaming growth potential that has already been realized to some extent in countries like South Korea and the United States.

Sony, for its part, has already unveiled plans to connect the PlayStation to the mobile phones of Japan's biggest mobile operator NTT DoCoMo.

Microsoft did not specify whether a mobile phone strategy was in the works, but Bach says there were "all kinds of possibilities," hinting at a mobile link-up.

NTT Communications is the wholly owned Internet and long-distance calling service arm of dominant telecom carrier Nippon Telegraph and Telephone (NTT), while NTT DoCoMo is 64 percent owned.

The Xbox is an Intel Pentium III processor-based console that Microsoft says is better for high-quality game development and offers superior graphics than the PlayStation 2.

Microsoft said it would spend $500 million to market the Xbox in its first year on the market. NTT shares opened lower Friday in Tokyo, while NTT DoCoMo were up about 4 percent in early trade.

Reuters contributed to this report.

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