Microsoft is to boost its flagging Xbox sales this year by investing over $1bn in an online games service to be called Xbox Live.
According to a report in the New York Times, the company will open three data centres in London, Seattle and Tokyo to handle the expected traffic for what it describes as an "online Disneyland" of Xbox games.
Users will have to shell out £34 for the necessary software and a £7 monthly subscription.
The newspaper said that gamers would be able to play Microsoft's Xbox games with partners worldwide.
The move is a bid by Microsoft to overcome the embarrassment of disappointing Xbox sales against the overwhelming popularity of Sony's PlayStation 2 system and the recently launched Nintendo GameCube.
Meanwhile Nintendo has announced that it is slashing the price of its console in the US, taking the cost down to $149 from $199.
The games giant has also announced that it intends to introduce an online GameCube service this autumn in the US, although its investment plans are far more cautious than Microsoft's.
Sony has announced similar plans for the PlayStation 2.
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