Gaming rivals Sony ( SNE) and Microsoft ( MSFT) will soon be locking horns in cyberspace after both firms announced
virtual worlds for their game consoles at the Tokyo Game Show on Thursday. The two vendors are looking to offer gamers virtual worlds similar to Linden Lab's Second Life, which currently boasts more than 15 million users. Sony's Home virtual world will be available sometime later this year for the Playstation 3, according to AP, while Microsoft confirmed plans to launch its New Xbox Experience on Nov. 19. The latest version of the Xbox 360 console will include enhancements to Microsoft's existing Live online gaming technology, enabling users to create an avatar, or virtual person, that can interact with others players. "Our industry is defining the future of entertainment," said John Schappert, Microsoft's corporate vice president of Interactive Entertainment, in a statement. "When the New Xbox Experience launches in just six weeks, we will be inviting the whole world to play." Both Sony and Microsoft face stiff competition from Nintendo's Wii, and are bracing themselves for a holiday season likely to be hit by the current economic crisis. Microsoft, for example, recently lowered its Xbox prices in the hope of boosting online gaming revenue. Far from being the sole domain of nerdy Dungeons-and-Dragons types, virtual worlds also open up new revenue streams to their creators. Linden Labs, for example, has an estimated value of $1.1 billion, according to Silicon Alley Insider, and earns "in-world" revenue from the sale of advertisements and "virtual" land.
Other businesses have already established their Second Life presence, typically using the technology to overcome geographic constraints. IBM ( IBM), for example, has made use of Second Life for internal meetings, and companies such as Cisco ( CSCO) and Sun ( JAVA) have all made
product launches in the virtual realm. Sony shares were up 97 cents, or 4.06%, to $24.87 Thursday morning, and Microsoft shares also rose 64 cents, or 2.76%, to $23.65.