Microsoft is developing a console to enter the games market next year, according to many sources in the UK and reports from the US.
The software giant has denied it is working on the console, believed to be codenamed X-box, but sources confirmed to PC Dealer that it and Intel have developed a prototype. Extensive reports from the US have included details, which has fuelled the speculation in the games industry.
The console is expected to launch around the same time as the PlayStation 2 next year, with a similar specification. It is tipped to contain an Intel 500MHz chip, a graphics processor from nVidia and a modified version of Microsoft WinCE for the operating system, similar to the one used for the Sega Dreamcast. It is understood the console will be made and possibly sold by Gateway or Dell for about $300 in the US.
A spokesman for nVidia refused to deny the console existed and added: "There is a lot of rumour and speculation and I am afraid I am not in a position to comment."
Nick Gibson, analyst at Durlacher, said: "It would not be a surprise if Microsoft entered the console market. Its presence in the games sector has increased over the past few years and the console market is a very lucrative and stable sector to be in."
Mike Welch, analyst at Gartner Dataquest, agreed: "Microsoft is very interested in the internet industry and now that games consoles are moving into that sector it would make sense."
"The console market is huge - it also offers a way into people's homes who do not have a PC," he added.
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