Microsoft’s release of X Box Live has changed the video gaming industry forever. Since the introduction of Pong, the first video game, people have competed against themselves, a computer, or their friends on the same system. The introduction of X Box Live has ended this forever. X Box Live subscribers now have the ability to play certain games online against other subscribers. With X Box Live, you can play games online against people on the other side of the world. The use of the internet in video games is long overdue, and X Box Live will enjoy a great competitive advantage as the first system to offer this service.
However, it is almost certain that other video gaming companies (especially Sony PlayStation) will soon offer a service to compete with X Box Live. The largest question to be answered will be if there will be any compatibility between their respective online gaming systems. Since many games on X Box Live will crossover to PlayStation, there exists the potential to have them playing the same game between different systems. This would be great news for the consumers who would have a much larger potential network of people to play with online. However, from the point of view of X Box Live, they want to use their larger online network to sell more units, and if PlayStation users can play on the same network as they, people have no incentive to switch.
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