The system was unveiled Friday in Tokyo, ahead of a planned announcement at an annual gaming conference here by Chairman Bill Gates — a sign of how serious the company is about taking on the Big Three Japanese game makers: Sony, Sega and Nintendo.

"We are developing a game console that will bring a new dimension to the gaming experience," Microsoft said in a statement.

Microsoft said that the console will have "movie quality" 3-dimensional graphics and connection to high-speed Internet services that will allow users to take part in multiplayer games as well as connect to the Web and exchange e-mail.

Developers attending the Game Developers Conference, which normally is a chance to exchange ideas and check under the hood and kick the tires on new game software, were sharply divided on Microsoft's move, even before getting a sneak peak.

"Just because Microsoft is Microsoft I don't see them necessarily succeeding in this environment," said David Langendoen, president of New York-based Electric Funstuff. "I haven't heard any compelling reason for them for putting another game console on the market, or anything that makes X-Box stand out. I can't imagine Sony and Nintendo and Sega are shaking in their boots over this one right now."

But Susan Shaw, president of New York-based girls' game developer Hyperspace Cowgirls, said Microsoft's X-Box could make a place for itself because many games are overlooked by other entertainment companies.

"We're all very interested," Shaw said. "We actually don't care what the pipe is we're putting content into, so any new platform for us is a cause for celebration."

The X-Box, which will be out in time for the holiday shopping season in 2001, will be based on the same technology that powers personal computers. It will have a PC-based microprocessor running at speeds of 600 MHz, a hard drive, DVD-ROM drive and at least 64 megabytes of memory — the equivalent of today's mid-range personal computers.

Microsoft officials would not say how much it would cost, other than to say it would be competitively priced.

Sony's new PlayStation2, introduced last week in Japan and to arrive in the United States in September, is the most advanced platform currently on the market. It has the ability to play audio CDs and DVDs and link to the Internet for multiplayer games and basic World Wide Web access. It costs about $370 in Japan, though the price is expected to decline when it is introduced here.

The Sega Dreamcast, which uses software developed jointly with Microsoft, currently retails for $199.99. Nintendo's latest offering, the Nintendo 64, currently sells for less than $100, though the company is planning to release a high-tech successor in time for Christmas.

X-Box users will be able to connect to high-speed Internet services to take part in multiplayer games, as well as Web access and e-mail, but can only use digital subscriber lines (DSL) or other high-speed services, said Robert Bach, a vice president in Microsoft's Home and Retail Division.

For the people who write games, X-Box will be familiar territory. The software on the console will be based on Microsoft's Windows operating system. Since many game developers already write for personal computers, moving their games to the X-Box and taking advantage of the new hardware will be easy.

Jennifer Orvik, national sales manager for San Francisco-based CMP Media Inc.'s game media division, called the X-Box an intelligent countermove on Microsoft's part to the threat posed by Playstation 2 to Windows-based PCs.

"Playstation2 has the potential to replace a lot of the functionality that the PC serves in most home. You can't do word processing on it, but you can surf the Net and play games, and that's what most people use their computer for," Orvik said. "Still, you've got to prove yourself with the developer community, and that could be the hard part for Microsoft."