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Console makers still figuring out the Net

Microsoft, Nintendo and Sony executives square off at the Electronic Entertainment Expo trade show and ponder their consoles' future in online gaming.

LOS ANGELES--Given the extent that pro wrestling has infiltrated the video game industry, one might expect a bit more entertainment value from a square-off of the three fiercest competitors in the gaming business.

Instead, it was mostly a polite, pointed chat session as executives from Nintendo, Sony and Microsoft kicked off the Electronic Entertainment Expo (E3) here with a tag-team keynote address Thursday.

For them, the biggest issue is what to do with the Internet connectivity that Microsoft and Nintendo are building into their upcoming game consoles and that Sony will sell as an add-on to PlayStation 2.

Robbie Bach, chief Xbox officer for Microsoft, asserted that online connections and beefy hard drives will change the nature of game software, allowing publishers to provide "episodic content" over time rather than dumping everything into one package that may or may not catch on with consumers.

"It will be more like a (TV) show than the way game publishing works now," he said. "We think this can really revolutionize the economics of the business."

Peter Main, senior vice president of Nintendo America, offered no predictions for online gaming and no details on how it will work with the company's upcoming GameCube. The market is too embryonic and is filled with pitfalls, he said, such as getting young game players without credit cards to pay for online content.

"We're being honest in saying we're still working on it," Main said, adding that many of the current business plans for online gaming are likely to end up in "the dot-com ash can...great technology, interesting concept, no consumers."

The discussion also focused on marketing and demographics--just about everything but the usual debates on chips and hardware specifications.

"I've been through a few platform changes, and this is the first time nobody is talking about the processor," Main said. "We're on level ground now. The graphics are pretty evenly compelling across the platforms."

The executives did compete on the issue of software support. Bach boasted that 200 third-party developers are onboard the Xbox ship. Kaz Hirai, president of market leader Sony Computer Entertainment America, asserted that with 300 developers already familiar with the PlayStation 2, Sony will keep its market edge.

"I kind of agree with the critics and analysts: The real question for this year and next year is who is going to be in the No. 2 position," he said, implying that Sony will remain No. 1.

Nintendo was the odd company out, arguing that the focus should be on quality rather than quantity.

"I submit we should be helping our developers to do fewer titles better," Main said. "There's been an absolute bloodbath in the developer business. We don't need 12 versions of every idea."