Speaking at a meeting of business journalists, Bill Gates said that the new Xbox would crush Sony's console offerings once and for all. So excited is Microsoft about their new Xbox 2 that they believe it will come to quickly dominate the console market, providing a "digital entertainment hub" that will satisfy user's demands for a greater home entertainment service.

Microsoft's new Xbox (codenamed Xenon) will sport an interface that is similar to the Media Centre edition of Windows, and will contain tools that will "make multiplayer online gaming more sociable."

Xenon will be officially unveiled on MTV on 12 May, several days before the conference. Speculation about the Xenon's functions and design has been rife on internet sites. Some are reporting that the console will be backwards compatible - allowing users to play current Xbox games on it. Others have speculated that Microsoft may make a nod to Apple-inspired design, with a sleek white box.