The Change Mariner

Video Games: The Battle for the Living Room

New York Times:

Even as the Intel Corporation and the Microsoft Corporation, whose chairman is Bill Gates, are pushing a digital future in which they hope that the personal computer will be the hub for a variety of home entertainment devices, the computer game industry is pointing to a fundamental flaw in that vision: game software has largely driven PC growth among consumers.

"This kind of thing drives me crazy,'' said Alex St. John, the founder of a game software publisher, WildTangent Inc. He challenged Intel at a recent industry forum on the digital home, arguing that personal computer makers are about to lose out to the video game industry, which is waiting on a new generation of game consoles that also aspire to be home digital media hubs.

"If the game console makers want to own the living room,'' Mr. St. John said in a subsequent telephone interview, "they're in a better position to own it than Intel.''

Intel executives responded at the meeting and said they felt there was a market for interactive television in the home.

Microsoft is in a different position, having hedged its bets by continuing its two-decade-old alliance with Intel in producing software and microprocessors for PC's while turning to I.B.M. to develop the chip for its next-generation Xbox game player.