It appears that Microsoft, which launched Xbox in late 2001 after Sony's PlayStation 2 and Nintendo's GameCube consoles, will be the first company to unleash its next-generation home console. The tentatively codenamed "Xbox 2," set to receive a name revision before its release because Microsoft doesn't want consumers to assume it's inferior to PlayStation 3 based on end numerals, hasn't yet been given an official release date. But just because Microsoft isn't yet talking doesn't mean developers working on early "Xbox 2" development setups are so keen to keep quiet.

A major software company already prototyping software for Microsoft's "Xbox 2" told IGN today that the publisher "definitely aims to launch the console in North America for Christmas 2005." A November time frame was given. A European release will follow in 2006, said the source. IGN contacted another software firm working currently working on "Xbox 2" software, who seconded the news. "Let's put it this way: a lot of developers crunching to get their games ready for a 2005 launch will be really pissed if Microsoft doesn't get it out by then."

Microsoft has moved quicker than Nintendo and Sony to get development studios preliminary next-generation prototyping hardware, another indication that the company hopes to get the jump on its competitors.

The "Xbox 2" will use PowerPC based architecture similar to the chipset powering Apple's G5 computers. That being the case, Microsoft's early "Xbox 2" development kits have been little more than modified Apple G5 systems pre-packed with "Xbox 2" emulation software. "I heard [Apple CEO] Steve Jobs found it pretty ironic and funny that Microsoft has been shipping Apple systems to developers," one studio source joked to IGN on the subject.

Multiple software houses involved with "Xbox 2" development stand by rumors the console will not feature a hard drive, which would suggest that it might also not be backward compatible with current Xbox software. "Microsoft needs to make money with this system and so it's going a pretty conservative route," an insider explained, adding, "but that doesn't mean the system is not powerful because it is."

Microsoft is hoping that consumers, drunk on hit Xbox games like Halo and Star Wars: Knights of the Old Republic, will be eager to step into the next-generation of home consoles with the successor. "It's hoping the early arrival will not hurt it, but help it," said a development source. "It doesn't want to be another Sega Dreamcast, in other words. It wants to be a Sega Genesis."

Presented with this information, a spokesperson for Microsoft said that the company "does not comment on rumors or speculation."

The downside to launching "Xbox 2" in 2005, say insiders, is that it puts Microsoft in the position of being the first next-generation console to market, which historically also means it could be the least powerful of the three from a technical standpoint.

Preliminary tech specs for Nintendo's Revolution (of which there are some half a dozen different versions, apparently) illustrate a console that is as powerful as "Xbox 2" in most respects. In fact, IBM and ATI, the two hardware makers responsible for the guts of "Xbox 2", are developing Revolution. Given another year development time, Nintendo's console could actually ship in 2006 as the more capable of the two hardware platforms.

Meanwhile, IBM and Sony are developing Cell, a proprietary, powerful new architecture that will be used in PlayStation 3. Some developers believe that Sony could delay the arrival of its next-generation console to as late as 2007 in order to create a Trojan horse for its budding Blue-Ray DVD technology, which promises to deliver high-definition DVDs into the living rooms of consumers, replacing current DVD-players.

Sony's Blue-Ray technology has one formidable hurdle to overcome: HD-DVD. This alternative format, backed by such electronics giants as NEC and Toshiba, is positioned to give Blue-Ray a run for its money. But HD-DVD could be squashed in the same way the DVD squashed DivX if Sony were include Blue-Ray DVD-playback in PlayStation 3, instantly turning millions of gameplayers into Blue-Ray supporters.

Doing so would also give Sony a clear selling point over Microsoft's "Xbox 2" as the only console that could play true high-definition DVD out of the box.

Source: IGN.com & XboxRules.com