The other shoe will fall next year or early in 2007, when Sony releases its PlayStation 3, a similar next-generation console designed to play more than games.

The 360 is primarily a video-game system, with advanced processing power to fuel more sophisticated games and characters, and with powerful graphics hardware to generate more realistic, high-definition, 3D video.

Microsoft says the system is capable of a teraflop - a term meaning 1 trillion calculations per second that is generally reserved for supercomputers - on its triple-core IBM PowerPC processor.

But the 360 will be more than a game system. It will offer a link between home entertainment centers and multimedia PCs that store digital photos, video and music on their hard drives.

"The Xbox 360 has a much broader definition of what a gaming device can do," Microsoft spokesman Carlos De Leon said. "We've gone from a device targeted solely at young males to one that includes features for others, such as moms who might want to view their digital photos on the television."

The original Xbox was particularly successful among hard-core American gamers, typically males under 35. De Leon said that the 360 was designed with one eye on keeping that customer base happy and the other on broadening the appeal.

Game players expect new consoles to offer improved graphics. To keep them happy, the 360 will display video games in the two most common HDTV formats, 720p (720 lines of horizontal resolution, progressively scanned) or 1080i, (1080 lines of interlaced resolution) on digital televisions, an improvement over the 420p from the original Xbox. De Leon said the new system will look better on standard-definition televisions as well.

The company was criticized by game players for a shortage of quality games at the release of the original Xbox. The 360 will be accompanied by 18 games on nearby shelves.

The original bulky, black Xbox did not sell as well in Asia and Europe as it did in the United States. Microsoft has packed the 360 into a smaller, more stylish, white case to give it more universal appeal. It has also worked with publishers of games popular among Asian players, so it will have more titles likely to appeal to Asian consumers, De Leon said.

"The heart and soul of the 360 is about video games. It is first and foremost a gaming machine," he said. "But it has other features likely to be appealing to later adopters."

Microsoft has long coveted the living room as the logical extension of the home-computing experience. The company bought WebTV, a service that displays the Internet on televisions. It developed and briefly promoted UltimateTV, a digital-video-recorder service. Then it launched Windows XP Media Center Edition, which merges television into the PC. And it is working on software to send television over the Internet.

The original Xbox, with its hard drive and Internet capability, was expected to be another piece of the battle plan to conquer the living room. That never happened. But Microsoft is clearly trying with the 360.

The new gaming system can function as a Media Center extender. Using a home's wired or wireless network, the 360 can link the contents of a computer hard drive to a television and stereo or home-theater system.

Like Microsoft, Sony is betting that consumers want more than games from new consoles. In a preview of the PlayStation 3 this past spring, Sony touted the system's ability to access photos and display live video from Web cameras.

Despite the growing interest in PC-based entertainment, industry analysts remain skeptical about consumers' response to the Media Center functions in the new game console.

While users are beginning to embrace more sophisticated technology for entertainment, many are still intimidated by the idea of using a computer to do something as simple as watch television.

"The question is: Will people really store content on the PC, set up a home network and then access content over the network?" said Matt Rosoff with independent analysts Directions on Microsoft. "That's still a pretty geeky thing to do."

But Rosoff said other technical advances, such as more widespread broadband availability and the increasing popularity of high-definition televisions, are helping Microsoft's efforts.

At technology research firm In-Stat, analyst Brian O'Rourke said he didn't expect that the non-gaming functions would be a significant factor in Microsoft's battle against the coming PlayStation 3.

This is cache, read story here