Microsoft will release its own home video game console -- codenamed the "X-box" -- as early as next year, according to a report in the UK newspaper The Sunday Times.
The report said that Microsoft showed the unit to developers at last week's European Computer Trade Show (ETCS) trade show in London under strict nondisclosure agreements.
Spencer Wilson, a spokesman at Text 100, Microsoft's press relations agency in Europe, declined to comment on the report.
The Sunday Times reported that, although Microsoft officially denies that the X-box exists, the US software giant hopes to join major players Sony Computer Entertainment, Sega Enterprises and Nintendo in the video games market.
The Internet-capable X-box will most likely be priced under $US243, will run on an Intel processor and "a revolutionary graphics chip", the Sunday Times article reported.
Microsoft will contract PC maker Dell Computer or Gateway 2000 to build the consoles, the report said.