Xpansion
Perhaps the biggest surprise of this whole affair so far is that there are actually people in the industry who are surprised by the X Box rumours. Just consider for a second Microsoft's corporate history - this is a company that has barged its way into pretty much every computer technology market out there, from office software to videogames, peripherals and, most famously, the Internet. This is where they attempted to shut their main rival, Netscape, out of the browser industry completely with the Siamese twin set-up of Windows '98 and Internet Explorer. The console market - now raking in billions of pounds every year - must look like very rich pickings indeed.

And Microsoft have hardly made their intentions of expansion within the videogame industry a big secret. Two years ago, I visited the company's Redmond campus to get an early look at Direct X 5.0 and find out what the company had planned for the next few years. One of the subjects that came up was a project named PublicPC - an initiative to push PC technology into new markets such as amusement arcades and public Internet access terminals. Microsoft didn't want to build any of these things themselves; they just wanted to suggest specifications to manufacturers and let them build 'em - with Microsoft operating systems, of course.

A few months later, Intel announced something called the Open Arcade Architecture - essentially a hardware specification for an arcade machine based on PC technology. Together with coin-op manufacturers Hanaho and Happ, 3D card manufacturer 3dfx and, of course, Microsoft, the company wanted to create arcade cabinets that were essentially very powerful home PCs, capable of running highly optimised PC games. However, Intel and Microsoft also mentioned that their proposed arcade set-up could be scaled down for use in, yes, videogame consoles. So the intention has been there for 24 months, if not longer. The only surprise, perhaps, is that Microsoft have waited this long.