Microsoft Seeks To Use Windows Base To Build Online GamingMicrosoft Seeks To Use Windows Base To Build Online Gaming

Hoping to exploit its broad base of Windows users to build its video-game business, Microsoft is developing software that would let PC gamers square off over the Internet against users of its Xbox system, and plans to introduce a handheld game controller that's common between the two devices.

Those plans, which could materialize when Microsoft ships its next-generation Xbox video-game console--perhaps as early as next year--are part of a broader software-development strategy Microsoft introduced last week called XNA. Under XNA, Microsoft will make available source code and application programming interfaces that developers can use to write games that run on Windows PCs and Xbox consoles with less duplication of effort. Microsoft also plans to bring its online gaming service for Xbox to Windows.

"You can easily see a world where you're playing games between the two--someone playing a game on a PC and someone else playing on an Xbox, and they can play against one another," says Cameron Ferroni, a general manager on Microsoft's Xbox platform team. "It's a very foreseeable reality."

As Microsoft prepares to deliver the second version of Xbox, which will use microprocessors from IBM instead of the Intel chip in its current product, the software company is seeking to simplify development of its games and make its platform more attractive to developers, compared with Sony's PlayStation. "Game development has been very tied to the hardware platform," Ferroni says. "As this gets more complex, it gets very hard to take advantage of advances in silicon, graphics, and online without a steep learning curve."

Under XNA, Microsoft will release development tools and APIs for quickly writing functions including audio effects, security, and billing users for online play. Every little bit could help Microsoft, which has sold 13.7 million Xboxes, compete against Sony, which has sold more than 70 million PlayStation 2 units. The Xbox business loses money, while Sony's PlayStation business is profitable. "It's in Microsoft's interest to make as many connections as possible from an Xbox in the living room to a PC," says Greg DiMichille, an analyst at research firm Directions on Microsoft. "Microsoft got into the video game business to begin with to prevent Sony from establishing a beachhead in the living room that they could use to branch out and replace the PC."

The XNA tools also could help game-development studios spread their costs over a much bigger installed base, DiMichille says. "An Xbox is just a PC with a different case on it and some slightly customized hardware," he says. "With this tool, you can look at Xbox plus the PC, which can become a very big number."

According to Ferroni, hooking up PC and Xbox users would require Microsoft to build networking technology to link the devices, new types of security software to prevent cheating, and possibly a way for gamers to talk to one another online. Xbox players already can play against online opponents by subscribing to Microsoft's Xbox Live service, which costs about $70 a year.

Microsoft says developers are testing the XNA tools, which the company calls its game-development technology of the future. Says Ferroni, "This is a 10-year vision."