X-box launch has rivals quaking

Microsoft's X-box games console, which launches in the US tomorrow (Thursday), is set to shake up the business structure of the console market, according to Sony chief Kunitake Ando.

Sony, which produces the PlayStation line of consoles, sees X-box as its biggest threat going forward, Ando said, replacing traditional rivals Nintendo, whose GameCube has been a major flop in Japan, and Sega, whose DreamCast console failed disastrously.

"The biggest threat to PlayStation2 is that the X-box changes the industry's lifecycle," said Ando.

Currently, consoles have been sold for five years, he explained, but Ando fears that the X-box will reduce the cycle, forcing Sony to release PlayStation3 ahead of schedule.

Any such move could harm Microsoft, analysts said, possibly costing the company $1bn in losses before it breaks even in around 2004.

Whatever happens, an interesting storm is brewing. The X-box is due for release in the UK in March next year.