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The week in review: Playing for keeps

An early price war sets the tone for a major gaming industry conference, with major players pulling out the big guns to show that playtime is over.

An early price war set the tone for a major gaming industry conference this week, with gaming giants pulling out the big guns to show that playtime is over.

Nintendo cut the cost of its GameCube console by nearly $50 to $149.95. Nintendo's decision came after price cuts last week by rivals Microsoft and Sony. Their machines, Xbox and PlayStation 2, respectively, were cut to $199.

Money was certainly on Microsoft's mind. The software maker expects to spend $2 billion over the next five years in its attempt to make Xbox the leading video game console. The company will spend that much to build out the network for online Xbox gaming and to fund research and development for the next version of the console.

The launch date of Xbox Live, Microsoft's online gaming service, will be announced this fall. Unlike online gaming plans recently announced by Sony and Nintendo that allow consoles to connect via an existing Internet account, Xbox Live will be a closed subscription service run by the software giant.

Not one to be outdone, Sony kicked off the Electronic Entertainment Expo by trash-talking the competition. Kaz Hirai, president of Sony Computer Entertainment of America, touted the huge sales lead of Sony's PlayStation 2 over Microsoft's Xbox and Nintendo's GameCube.

The PS2, which has been on the market a year longer than either competitor, has sold 30 million units worldwide, compared with about 4 million for each for its rivals. Sony expects to sell another 20 million during the current fiscal year. "The console wars are over," Hirai said.

There were also plenty of gaming announcements at the conference. The creators of "Myst," one of the most popular PC games of all time, are working on an online version of the adventure game. "Myst Online" will go on sale next year, and will include both a boxed software product and a subscription online service.

Separately, LucasArts said it would begin developing online games for Microsoft's Xbox and Sony's PlayStation 2. And even the U.S. Army is getting into gaming. The Army is developing PC games to serve as recruiting tools. Two games will be distributed as a free package, titled "America's Army," starting this August at recruiting events, through game magazines, and by request at the game Web site.

The worm turns
A new computer worm targeting Kazaa's popular file-swapping system infected PCs in Germany, Mexico, South Africa and the United States. Posing as popular song and movie files, the Benjamin worm aims to infect Kazaa users' PCs by tricking them into downloading a phony media file to their computers and opening it.

After downloading a file that apparently had been corrupted, one CNET News.com reader said that his PC slowed to a near standstill, with the worm consuming almost 100 percent of the processor cycles.

A new worm that targets Microsoft's SQL Server database management software inundated networks with thousands of scans for vulnerable servers. The worm has caused traffic to the server port--a channel for data--used by Microsoft SQL Server to jump by a factor of 40 in some reported cases. SQL Server is the third most widely used database software package, with more than 16 percent of the overall market, according to a recent survey by Gartner Dataquest.

CNET security alert: One of the greatest network security vulnerabilities is actually something we all have control over. A CNET News.com special report found that companies of all sizes and even Internet service providers with strong security have an Achilles heel: people who pick easily guessable passwords.

Some choose words straight out of Webster's dictionary; others use a pet's name; and still more choose the name of a secret lover. Many who think themselves tricky append a digit or two on the end of their chosen word. Such feeble attempts at deception are no match for today's computers, which are capable of trying millions of word variations per second and often can guess a good number of passwords in less than a minute.

Kazaa chameleon
Besides fending off a worm attack, Kazaa announced that paid content will join in its file-swapping network in a major commercial test of a service that until now has lured millions of people with free music, video and other digital files. Along with finding search results that point to unfettered MP3s, Kazaa users will begin to see links to songs for sale from record labels and advertisements linked to keyword searches.

The move is fraught with controversy as it is the first application of Altnet, a service from Kazaa partner Brilliant Digital Entertainment that came to light amid a Web privacy storm last month. In its first incarnation, Altnet will simply seed the results of Kazaa's 120 million daily searches with links to paid content, drawing from the increasingly common pay-for-placement model of Web search companies such as Overture.

A legal fight that has pitted file-swapping software companies Kazaa BV and StreamCast Networks against big record labels and movie studios is collapsing as the small companies run out of funds. Netherlands-based Kazaa BV, which created the file-swapping technology underlying Kazaa, Grokster and earlier versions of Morpheus, is conceding defeat--although its founders already appear to have started another near-identical company.

The disintegration of the companies' legal case will have little immediate affect on the popular Kazaa and Morpheus file-trading networks themselves. But it appears the second generation of high-profile peer-to-peer companies may be going the way of Napster, crushed by litigation too expensive for start-ups to fight.

Coming soon
A new chipset unveiled by Intel promises sweeping changes in desktop PCs. Two new versions of its 845 chipset, dubbed the 845G and the 845GL, will include built-in graphics and Universal Serial Bus 2.0, a high-speed connection for digital cameras and other devices.

The combination of the new chipsets will allow manufacturers to deliver a slew of new PCs, ranging from better performing, low-price Celeron-based PCs starting at $650, to high-end desktops approaching the $3,000 mark. Dell Computer, Gateway and a host of other PC manufacturers launched PCs for both consumers and corporations using the new chipsets.

Handspring's latest combination cell phone and handheld Treo communicators will bound out of the gate next week. The first of the devices will be the long-awaited Treo 270, which comes with a color display and the Treo Mail software allowing consumers to automatically receive e-mail that can be redirected from the subscriber's primary computer. The Treo 270 is expected to cost about $500, which is $100 less than earlier announced.

Handspring is also expected to debut its $300 Treo 90 device next week, according to sources. The Treo 90 is similar in appearance to the Treo 180, but without the wireless modem. The Treo 90 will have a color screen, version 4.0 of the Palm operating system, and 16MB of memory.

For the past several years, IBM has transferred the technology inside its mainframes to beef up its other server lines. Now the process is going the other way. The company has kicked off a project to dramatically change the underlying architecture of its zSeries mainframes so the machines will use the same Power processors and other technology as its high-end, but less expensive, pSeries and iSeries servers.

By using the same processors across product lines, IBM will potentially be able to substantially reduce the cost and time involved in bringing mainframes to market, as well as cutting the cost of supporting them once they get installed in corporations. Currently, IBM has four server lines, each with its own software and engineering teams

Also of note
Yahoo will close five of its auction sites in Europe and instead promote eBay's competing auctions as part of an agreement...Cingular Wireless, VoiceStream Wireless and AT&T Wireless are all asking the Federal Communications Commission for more time to meet requirements that would allow rescue workers to pinpoint the location of a cell phone used to call 911 during an emergency...Sun Microsystems is bundling its application server software into its Solaris operating system in a move that could change the competitive landscape in a lucrative market...America Online's Netscape Communications subsidiary launched a preview of its newest Web browser, another sign of AOL's reinvigorated campaign to win consumers back from Microsoft...Yahoo will stop charging customers who post photos and use other features in their online personal ads.

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