Game Wars

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It's the sort of place where you expect great machines to be built--a cramped, windowless room where keyboard wires and screen cables coil round cups of stale coffee. A handful of X-shaped boxes in brushed metal, each polished to perfection for a punishing 15 hours, lie on workbenches in varying states of completion. The team of six engineers putting them together has gone four days with less than four hours' sleep each night. There's a maniacal tinge to their humor. Bald-pated Drew Angeloff has taken to teasing his colleagues with the blue flame of his soldering equipment. "Help!" one screams. "A skinhead with a blowtorch!"

But you're not in someone's garage trying to invent the next Mac. This is Microsoft's Red West campus, in the Olympian heights of Redmond, Wash. These sleep-deprived souls are software engineers--trained to write code, not dirty their hands with metalwork. Which explains why Angeloff has accidentally soldered the wrong pieces of circuitry together in one of the boxes. The engineers have been up so long on this frazzled assembly line because their boss--Bill Gates, a man whose tolerance for failure is minuscule--needs to demonstrate his company's tentative entry into the games-console market. "It's like we're cooking a big buffet," an engineer explains, "and the guests are arriving in two hours."

Gates, as it turned out last Friday, was well pleased with his buffet. He was able to waft the polished X-boxes under the noses of games developers at a conference in San Jose, Calif., just long enough to whet their appetites. Not that he needs to be worried about getting anyone's attention. These X-boxes are prototypes, two generations and 18 months away from anything you might see on store shelves. But when the world's largest software company, currently duking it out with the government for its very survival, starts building a video-games console, notice will be taken.

In speed, memory and hard drive, the X-box is beefier than any other games console, including the much ballyhooed PlayStation 2. Early demonstrations are jaw-droppingly good. Imagine 1,024 Ping-Pong balls on screen--the engineers take geekish delight in disclosing the exact number--bouncing around like crazy on a varnished oak floor, springing 1,024 mousetraps. Or 1,024 butterflies fluttering organically round a Japanese garden where plants sway gently in a breeze you can almost feel on your cheek. It's like watching your first Pixar movie, except you're the director--making butterflies scatter as you move the camera forward.

The vision is almost lovely enough to obscure the enormous mountain Microsoft has to climb if it wants to plant its flag on the $7 billion games business. Sony stands astride this pile of cash like Gamezilla, with a 60% market share; 1 American household in 5 owns a PlayStation. The next-generation PlayStation 2 sold 980,000 units in Japan in record time; a rock-star-style arrival in the U.S. is scheduled for this fall. Sony's new machine also has the advantage of being backward-compatible, meaning you don't need to throw out all your old PlayStation games.