Hoping to open another avenue for its video games and broaden its front in the war against Sony and Nintendo, Microsoft is expected to take its Xbox game console into arcades later this year.
The project, code-named Chihiro after the heroine of the Japanese anime film "Spirited Away," has been in the works for a couple of years. Microsoft and Sega announced in fall 2001 that they would jointly create arcade machines based on the Xbox technology. But the partners have been quiet since that time.
Now the project is closer to fruition. When Microsoft and graphics-chip maker Nvidia settled their price dispute on chips for the Xbox, the agreement included plans for the Santa Clara chip maker to provide Microsoft with chips for arcade machines.
A Microsoft games source said the appeal of the arcade is the opportunity to sell more games and the chance to extend the Xbox brand as the coolest gaming experience. While hundreds of console games are released each year, only several dozen arcade games are released. The arcade titles influence the kind of console games that fans buy.
The rest of the article is at the San Jose Mercury News.