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Microsoft hooks up with yet another game developer

The company announces an investment in Big Huge Games, the latest move by the software giant to shore up its relationships with game developers in preparation for the launch of its Xbox console.

Microsoft announced an investment in Big Huge Games today, the latest move by the software giant to shore up its relationships with game developers in preparation for the launch of its Xbox console.

Microsoft said it has made an equity investment in Big Huge Games, a start-up PC games developer. The investment gives Microsoft the exclusive publishing and distribution rights to all of the Maryland-based company's titles. Big Huge Games was launched in February. Microsoft did not disclose the amount of the investment.

Microsoft has already announced alliances with Digital Anvil, Ensemble Studios, Gas Powered Games and Relic Entertainment. Earlier this year, Microsoft acquired NetGames USA and Bungie Software products.

Microsoft is betting big on the Xbox, which is set to ship next year, and has said it will spend $500 million on marketing and hardware subsidies to launch the Xbox. Recognizing the uphill battle it faces against the established console makers Sony, Sega and Nintendo, Microsoft is attempting to build up a library of popular games able to compete with titles from these heavyweights.

Microsoft, along with its rivals, believes high-end game consoles could become a popular way for people to access Internet-based games, as well as other Web content and videos.

Sony's PlayStation2 is set to launch in the United States this fall. Sony has pegged the success of its upcoming PC and consumer-electronics products on the popularity of the console, making PlayStation2 the linchpin of its strategy to capitalize on networked homes.

Internet appliances, including TV set-top boxes, handheld computers and gaming consoles, are expected to grow from 11 million units shipped last year to 89 million units in 2004, according to market researcher International Data Corp. Revenues are expected to grow from $2.4 billion last year to $17.8 billion in 2004, IDC predicts.

The Xbox will use a Pentium III processor from Intel and a custom 3D graphics processor from Nvidia. It will have 64MB of memory, an 8GB hard drive, a DVD drive and an Ethernet connection for high-speed Internet access.