Microsoft is looking to branch out into the console market via a deal with Psygnosis to launch its titles on the Sony PlayStation.
The contract will allow Microsoft to port its Age of Empires title to the leading games console platform. Other titles to follow will include Urban Assault and Motorcross Madness next year. The move into the console market is a clear departure from the software giant's traditional PC platform.
Stephen McGill, games marketing manager at Microsoft, said: 'We are getting into games in a big way. We want to be a games player. The Psygnosis deal is the first of many. PC games are a big focus but we need a presence in consoles too.'
Microsoft will also launch titles for Sega's Dreamcast console and is ramping up its online gaming business in the UK. McGill said: 'Expect to see a big change over the next two to three years in the console market - Dreamcast is the first step. It is also natural to assume that Microsoft will develop titles for the Dreamcast.'
Microsoft provided the operating system for Sega's Dreamcast and McGill indicated that although that version of WinCE was part of an exclusive deal with Sega, it would consider offering different versions of the system to other manufacturers, including those in the arcade market.
Such a move would lead to Windows becoming the dominant OS for both PCs and consoles. The move has not surprised industry watchers, who expected a move towards online gaming for the console market - an area where Microsoft operates the world's largest gaming zone with 1.5 million users.
Michael Evason, analyst at Datamonitor, commented: 'There is only so far a standalone game can go until new competitive factors are needed - that is online gaming. Large game providers will need infrastructure, quality of content and deep pockets to survive. Eventually online gaming may consolidate, leaving only a handful of large players.'
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