Microsoft chairman Bill Gates outlined his vision for the X-Box--a game console with built-in high speed Internet access and e-commerce capabilities that could well supplant the PC in many areas--to an overflowing crowd at the Game Developers Conference.

"This is a huge milestone for us. It_s a new platform for the industry," Gates told an estimated 2,000 attendees. "The PC won_t be the only device people use to get on the Internet to be entertained." Arriving on store shelves in the second half of 2001, the X-Box will compete directly against Sony_s PlayStation2, Nintendo_s Dolphin and Sega_s Dreamcast in the lucrative gaming market. The battle between the four companies will largely be waged over winning the hearts, minds and wallets of teens. To lure that crowd, Microsoft promises the X-Box will come with an easy-to-use operating system, an 8 GB hard drive, built-in connections for high-speed Net access, ultra-realistic graphics and a bevy of games. As previously reported, an Intel chip will serve as the brains of the box. In many ways, the X-Box will create its own ecosystem. With the Net connection, users will be able to download trial versions of a game, and then buy it if they want it after a test drive, Gates said. Microsoft has extensive technological expertise and financial resources, but game consoles represent an entirely new market for the company. And it is a market that operates under its own peculiar rules. By contrast, companies such as Sony and Sega understand the game console market because they created it.