The week in review: Gaming isn't child's play

Summary:The gaming industry's heavy hitters went head to head in Los Angeles over the crown for gaming king. But until the public gets its hands on consoles, the title will remain up for grabs.

The gaming industry's heavy hitters went head to head in Los Angeles this week over the crown for gaming king. But until the public gets its hands on upcoming game consoles, the title will remain up for grabs.

Microsoft is the newest entrant into the gaming world, and at the Electronic Entertainment Expo (E3), the software giant released new details about its long-anticipated Xbox console. The Xbox will go on sale Nov. 8 for $299.

Along with a slew of software titles, Microsoft plans to make available 600,000 to 800,000 consoles at launch, in hopes of avoiding shortages that plagued the release of Sony's PlayStation 2 last fall.

Nintendo is working to take the wind out of Microsoft's sails with the release of its GameCube on Nov. 5, three days before Xbox hits shelves. Aside from the launch date, Nintendo had few new details about the console. The price of the box, and how many will be available, will be announced at Nintendo's financial analyst meeting in Japan next week.

One of the biggest questions at the show was what to do with the Internet connectivity that Microsoft and Nintendo are building into their consoles.

Microsoft representatives said Net connections will change the nature of gaming software, potentially allowing publishers to provide "episodic content" over time for download, rather than stuffing everything into one shrink-wrapped package. Nintendo didn't address its plans for GameCube, saying the online market is still too young to offer a decent assessment of its possibilities.

In the chips
Intel hit the market with a barrage of news about its current chip designs and about future plans for business expansion. First on the list was the release of five new mobile Pentium III chips this July, according to industry sources.

The chips--code-named Tualatin--will be the first new and faster Pentium III chips in more than a year, boasting clock speeds of up to 1.13GHz. The chips will compete with Advanced Micro Devices' Athlon 4 chip, a mobile version of the Athlon that runs at speeds as high as 1GHz.

Intel also took the wraps off a new high-performance version of its Xeon processor for PC workstations. The chip, code-named Foster, is based on Intel's NetBurst architecture and 0.18-micron manufacturing process--the same technology behind the company's Pentium 4 chip used in desktop PCs, sources said.

Looking ahead, Intel is considering new business opportunities where it can apply its processor strength to growing markets. Taking on a formidable opponent, the company may challenge Sun Microsystems by launching a line of telecommunications servers later this year; it plans to sell them via PC makers or telecommunications-equipment companies. The move is reminiscent of Intel's earlier foray into the high-end workstation market, where Sun is also a major player.

Consumer wins and losses
Once a highflier in the handheld market, Palm is facing a number of tough decisions. With sales falling short of lowered forecasts and cash dwindling, the company may have to scale back its far-flung effort to be the device manufacturer, operating-system developer, Internet service provider and portal for handheld devices for both businesses and consumers. Palm CEO Carl Yankowski said the company is looking at various options that would involve "more or less dramatically changing our business model."

Compaq Computer is looking to alter people's definitions of the desktop and laptop PC. The computer maker is experimenting with a line of business notebooks that transform into desktop PCs. The computer is designed to fold over and create a stand for a 15-inch, flat-panel display with removable wireless keyboard and mouse.

Apple Computer offered a sneak peek into its new retail store, with plans to open 25 stores by the end of the year. The first two stores will open Saturday in McLean, Va., just outside of Washington, D.C., and in Glendale, Calif., near Los Angeles. CEO Steve Jobs said three stores are planned for the Chicago area, four total for the Los Angeles area, and three for the San Francisco area. Other locations include Bloomington, Minn.; Hartford, Conn.; and New York's Soho district.

The stores sport hardwood floors, high ceilings, bright lights and clean lines--similar to the look of trendy clothing retailer the Gap. The similarity is not surprising, considering Mickey Drexler, CEO of the Gap, is a member of Apple's board. The Apple stores are being built by San Francisco-based Fisher Development, which also constructs the Gap's stores.

Heading out the door
Former Webvan CEO George Shaheen will collect $375,000 each year for the rest of his life from the cash-strapped Net grocer, as part of a retirement package. Shaheen will receive 50 percent of his base salary and target bonus for the rest of his life. The payments will continue to be sent to Shaheen's wife should he die before her, a Webvan spokesman said.

Webvan paid Shaheen an annual salary of $500,000 and a bonus of $250,000, according to documents filed with the Securities and Exchange Commission. His tenure with the online grocer was rocky from the start. Almost immediately after he joined Webvan, the SEC delayed the company's IPO while it looked into reports that the company had shared information with analysts that it did not provide in its prospectus.

Eazel, the start-up that aimed to make Linux easy, closed its doors after 16 months of developing a Linux interface for the consumer market. The company had spent the last several months in pursuit of a second round of funding.

Eazel was founded by veterans of some of the most successful consumer endeavors in computing history. These included Chief Executive Mike Boich, who joined Apple Computer in 1982 and was an evangelist for the budding Macintosh project, and "software wizard" Andy Hertzfeld, who started at Apple in 1979, where he wrote much of the original Macintosh OS.

Dell Computer plans to round up its Silicon Valley storage operations and relocate the unit at its headquarters in Round Rock, Texas. As part of previously announced layoffs, the No. 1 PC maker has shut its only Silicon Valley office and laid off about 50 employees based there. Earlier, the PC maker announced that it will cut 3,000 to 4,000 jobs in the next two quarters.

Also of note
Microsoft officially released its second collection of Windows 2000 bug fixes, or service pack...Recent studies show Juniper Networks is making a dent in the market for high-end routers, a space that Cisco Systems has long dominated...Calling Microsoft's way of doing business a "deliberately incompatible strategy," 10 luminaries from the open-source movement lashed out at the software giant for its recent criticism of the centerpiece of the free-software movement: the general public license...The number of consumers logging onto the Internet through DSL quadrupled in the past year, but that incredible growth came to a screeching halt in the first quarter after some providers went belly-up and others raised their monthly fees.

Topics: Microsoft, Apple, Hardware, Hewlett-Packard, Intel, Operating Systems, PCs, Processors, SMBs, Storage

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