Microsoft Says Let the Online Games Begin -- on Sony's Turf

In a quiet precursor to the noisy video-game wars that will heat up this fall, Microsoft (MSFT Quote) announced Thursday a deal with Japanese Internet services outfit NTT Communications to start delivering online video games through Microsoft's new Xbox console.

Microsoft will begin testing its online gaming services in Japan -- rival Sony's (SNE Quote) home turf -- using broadband high-speed Internet connections this year. The company says that by 2002, Xbox users will have access to an online gaming service over the Japanese broadband network.

It's a direct and deliberate contrast to competitor Sony's recently released 128-bit console, the hot PlayStation 2, which doesn't offer high-speed access -- yet. Though the company hasn't made any Internet strategy public, it has said that it plans to enter the online gaming market with the console, offering a broadband access module this summer.

Microsoft, which has earmarked half a billion dollars to market the Xbox, already boasts that its souped-up console has better graphics than Sony's offering. The NTT alliance is yet another elbow thrown at the Japanese giant. The Xbox is scheduled for release this fall, the same time Nintendo is slated to launch its new GameCube console. And when it launches, it will have 11 titles from former console maker Sega, Gates said Thursday.

``Every Xbox console has built-in broadband capability, the technology of the future for online video gaming. This alliance with NTT Com will enable gamers to enjoy the best online game content and gaming experience available,'' said Bill Gates, chairman and chief software architect of Microsoft, in a statement. Gates will unveil the Xbox strategy at the Tokyo Games Show Friday.

In the non-exclusive deal, Microsoft will be able to offer services using NTT's ADSL (asymmetric dedicated subscriber line) Net access service, which allows data to be carried at 10 to 100 times the speed of conventional dial-up services. NTT Communications is the wholly owned Internet and long-distance calling service arm of Japan's dominant telecom carrier Nippon Telegraph and Telephone Corp.