The next-generation Xbox video-game console will offer new ways for Microsoft and game creators to make money from players.

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The next-generation Xbox video-game console will offer new ways for Microsoft and game creators to make money from players, the company announced yesterday at a game developers’ conference in San Francisco.

The next-generation console will offer an on-screen guide with a shopping marketplace in which players can buy new game levels, weapons, cars or character outfits. Microsoft will set up a payment system so that even small-ticket items can be easily purchased.

The idea aims to realize what has long been a dream for developers: bringing in more revenue long after games leave store shelves. Up to now, console gaming has mostly been a one-transaction business, in which there is little incentive or opportunity for players to buy anything after the initial game purchase.

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Players may also have the ability to spend money on music. The on-screen guide will allow players to listen to their own music during games instead of the game soundtrack. Microsoft said the feature takes the burden off of developers to include custom music in games, but the company may also have less altruistic motives.

Microsoft didn’t give many details about the music system, but it’s easy to imagine the Xbox connecting to a music ecosystem that includes the MSN Music online store or the music library on a Media Center PC. Microsoft executives have long expressed the desire for the Xbox to become part of a larger home-entertainment system with a sophisticated PC at its core.

The company said it will provide more details about the console in May at the Electronic Entertainment Expo, an annual conference for the video-game industry popularly known as E3.

J Allard, a corporate vice president for Xbox, said in a speech to developers yesterday that the guide will help bring more players to the Xbox and its online game-subscription system, called Xbox Live. There were 1 million Xbox Live subscribers in July, the last time Microsoft disclosed the subscriber count.

“We’ve got to create a consistent experience so that consumers can enter our worlds much more easily,” said Allard, according to a transcript of the speech. “If we want to get to 10 or 20 million subscribers we’ve got to create some consistency and minimize the complexity.”

The guide will also give each player an on-screen “gamer card” that could show such details as their name, location, skill level and accomplishments.

Microsoft also said that the next Xbox will use a processor developed with IBM and a graphics processor developed with ATI Technologies designed for high-definition game play. The company hasn’t said when it will launch the new console, but analysts expect the system to be out by the end of the year.

Kim Peterson: 206-464-2360 or

Microsoft mum about new purchase

Microsoft is buying another company, but a spokeswoman declined to provide details yesterday.

The company’s identity is scheduled to be disclosed at 6 a.m. today, followed by a news conference with Chairman Bill Gates at 8:30.

Microsoft generally has focused on acquisitions of small companies in areas where it’s developing new products such as security, video gaming and small-business applications.

Executives told Wall Street analysts last summer that they would continue making smaller acquisitions. Its last sizable deal came in 2002, when it acquired Danish business-software maker Navision for $1.45 billion.