Software giant Microsoft unveiled its long-awaited Xbox games console on Saturday at the International Consumer Electronics Show in Las Vegas.

Xbox will be the most powerful console available, in terms of pure numbers, and Microsoft is hoping to make a serious impact on the so far Japanese-dominated console market, challenging the more established gamers Sony, Nintendo and Sega.

Microsoft has invested over 1,000 staff and $500million into the Xbox. The move into gaming hardware is a significant one for Microsoft, who up until now have kept their feet firmly planted in the PC market.

Sony’s PS2 and Sega’s Dreamcast will give the Xbox a serious run for its money. Its success will therefore depend on the quality of software companies it can attract. Microsoft’s chairman, Bill Gates, claimed that nearly 200 software houses including Electronic Arts and Namco were interested in writing games for the new console.

Unlike Sony’s PS2, which met serious supply problems, the Xbox will be produced using cheap personal computer components which are readily available from a range of manufacturers, so meeting demand should not be a problem.

Gates enthused about the graphics ability of the Xbox, which certainly sounds awsome.

"This graphics processor can do one trillion operations a second. That's where you can get photo-realism. That's way beyond any product that exists today. In fact, this is three generations beyond the best graphics chips that are shipping inside the PC right now," said Gates.

The Xbox will also have a 733MHz processor, 64MB RAM and an 8GB hard drive. It will ship installed with an Ethernet connection, allowing broadband internet access.

Gates said it would be priced as a console, and stated its European release would be Spring 2002.