It is going to be much simpler for game consoles to extend their capabilities, by adding features and add-ons for relatively low cost, as compared to STBs being upgraded to be all singing, all dancing interactive machines. Game consoles have the horsepower, but STBs don't.

Charles Bellfield also pointed out some interesting facts about the Sega Channel, which may hint at the opportunities for broadband gaming for the next generation consoles: between 1993 and 1995 Sega Channel had over 500,000 subscribers and was profitable for Sega. What killed it for Sega was an inability to move forward on the platform technology. People migrated to the PlayStation. In order to evolve in the console business, a vendor has to have deep, deep pockets because there is a constant state of hardware evolution.

I think this is a very interesting aspect of the problems facing Microsoft. The company has so hyped, and build up expectation for Xbox that is going to have a hard time matching expectations, even if it is successful. I mean, nothing short of beating Sony to the number one slot is going to be a certified success for Xbox. On the other hand, Sony has invested heavily in its hardware, and has a longer term technology roadmap and strategy. Deep, deep pockets on both ends, but Microsoft's future doesn't rely on Xbox; Sony's does so, it might end up being a multi-billion dollar game of chicken as the two fight for supremacy. Last man spending wins?

On the other hand, handheld gaming devices are going to increase to about 200 million units worldwide by 2006, according to JPA figures, but as Mr. Lau-Kee pointed out, half of those are probably going to be GameBoy Advances. Yes, I love the GBA. The handheld gaming device holds a lot more promise for me. As my generation, which grew up with arcade games and consoles, ages, we don't have the time to spend hours playing games online so, we want to nibble at the pleasure. A few stolen minutes on a long plane ride, at work, etc.

Mr. Bellfield pointed out that in Japan you can't use a cell phone on a train, and people have average commutes of two and half hours so, playing a handheld gaming device, whether it is a GBA or cell phone is, obviously, a compelling option for consumers.

At the end of the panel, it was obvious that companies like Criterion and Sega believe that the business of games requires a level of expertise that is hard to come by in the general entertainment industry so, to be successful with mainstream games the consoles are ideally positioned to dominate. As for delivering parlor games, or puzzle games through STBs, and other devices, the question of what revenue models are going to work remains unanswered so, who is going to invest in the content?