Copyright 2002 Newsday, Inc.

Newsday (New York, NY)…11/14/2002

Microsoft 's approach to its new Xbox Live online game network sounds like a video game itself: crawl, walk and run.

The first phase in the software giant's $2 billion commitment to online gaming begins tomorrow, when the $50 Xbox Live starter kits - containing the tools to allow Xbox owners to connect to other players over the Internet - hit store shelves, about 10 weeks after Sony's online effort kicked off. The kit includes software, headphones for talking to other players and online games; users also must have a high-speed Internet service, which plugs into the Xbox.

Both companies acknowledge this isn't a sprint, it's a marathon, reflected in Microsoft's approach that the launch is a baby step in at least a decade-long effort to bring Internet game-playing to the living room.

"We fundamentally believe this is going to be a new shift in the way people play games," said Scott Henson, Microsoft's director of platform strategy. "If there's going to be a new shift, we need to do things that haven't been done before."

Tomorrow also is the one-year anniversary of the launch of Microsoft's Xbox, for which it has had ambitious plans from the start. The console machine has a broadband modem and hard drive, neither of which was included with its competitors' systems, Sony 's PlayStation 2 and Nintendo 's GameCube.

Playing console games online is widely considered the next hurdle for the major game companies, and each one has its philosophy about how to do it. Microsoft will run the network through its own servers, offering a free year of service with the starter kit before initiating an as-yet-undetermined monthly fee. This summer, it received 150,000 applications to be beta testers for Xbox Live, so the company estimates it will have about 100,000 network users by the end of the year, Henson said.

Sony has a more hands-off approach, forcing game developers to support online efforts themselves, on their own servers. Nintendo has been mostly mum about online gaming, quietly releasing an Internet adapter that so far works with only one game. Microsoft will have eight Xbox Live launched titles and 50 by the end of 2003; PlayStation 2 has about a dozen online-enabled games.

Another noticeable difference is that Sony and Nintendo's Internet adapters, which sell for less than $40, support dial-up and broadband connections, while Microsoft allows only broadband users to connect. Sony has shipped about 200,000 adapters, and since the launch of its online effort, 43 percent of players connect through dial-up services.

"We're not interested in telling developers how to do it, where to put it," Sony spokeswoman Monica Wik said.

Schelley Olhava, a product manager and analyst for research firm IDC, said it's too early to tell which approach will work best, but that Sony and Microsoft are staking their console-gaming futures on online play.

Michael Gartenberg, a research director for Jupiter Research, a division of Darien, Conn.-based Jupiter Media, said Microsoft appears to have more at risk. "Right now, online console gaming is in its infancy," he said. "Certainly, this year through next year, we're going to hear more hype than reality."