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The Electronic Entertainment Expo happens May 16-20 in Los Angeles, and this year’s confab promises to turn the home entertainment network on its head.

Bill Gates said, according to this BBC article, that the Next-Box will be a digital hub for entertainment, which will include a souped-up version of the Microsoft Media Center software (dubbed Xenon) that will allow people to watch (and assumedly record) television, play DVDs, play CDs, connect the Internet, and game.

Using the old tried-and-true method, Gates hopes the Xenon/Media Center software will become a de facto standard for home networked devices, giving Microsoft even greater leverage than it had simply with the PC OS (and we all know how that worked out). The reason: the entertainment industry, and gaming in particular, continue to grow at a double-digit rate, unlike the PC market.

Which leaves Sony in an interesting position, because its PS3 is steering clear of the OS, and heading for the chip-set. The PS3 will use the Cell chip, which was jointly developed by Sony, Toshiba, and IBM to be a ‘supercomputer on a chip’. The new chip-set will initially be released in the PS2 (it does millions more calculations per second than current game technology), and then Sony will begin integrating it throughout its consumer electronics products – which Sony desperately needs since its CE division has lagged behind since the introduction of the Walkman in the 80s.

So, the battle is on – and it starts May 12, when both companies unveil their full product line.

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