When Sony launched the PlayStation 2 back in 2000, it audaciously described the console as a comet that would wipe out the dinosaurs and supplant the PC in the home.

As we all know, that didn't happen.

For years now, gaming consoles have been positioned as the Trojan horses of the living room but never seemed to fully deliver on that promise. Until now.

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The new generation of devices from Microsoft (MSFT), Nintendo, and Sony (SNE) may finally start giving PC manufacturers a reason to worry, for real this time.

These consoles will enter your home as a game machine and then insidiously infiltrate the rest of your life.

Even Nintendo's latest edition offers built-in Wi-Fi and the ability to browse the Web — a first for a Nintendo console.

So gamers, if you need to convince a spouse that it's time to upgrade, you can tout all of these extra features.

For the high-end entertainment crowd, the PlayStation 3 and Xbox 360 are being marketed as the ultimate entertainment boxes.

Immersing the consumer in a video-game experience is but a small part of the overall package; to entice nongamers, these boxes offer nifty functions such as music visualizers for dance parties and HD movie playback.

Though Nintendo is certainly a contender in the gaming realm, it has conceded the larger entertainment space to its rivals.

The company will remain laser-focused on the game market and is perfectly happy to leave the "home server" market to its competitors.

It is trying to win over nongamers, but through innovative games that have broader appeal, such as a game in which a player can wave the Wii remote control to conduct an orchestra.

Does this next gen of consoles actually signal the end of the PC? We don't think so; not just yet. But they're getting there.

If you're thinking of upgrading to one of the new consoles, whether it's just for old-school gaming reasons or for their newfangled features, read on to find out which one makes the most sense for your household.

XBox 360

During the development of the Xbox 360, Microsoft executives actually considered building Windows software into the new video game console and making the machine a fully functional PC.

But they decided against it and instead designed the Xbox 360 as a complement to a Windows Media Center PC. The 360 was conceived not as a standalone box but as something that would fit within Microsoft's overall product line.

J. Allard, the technology chief in charge of the Xbox 360's design, compares its development to sculpting.

The team started with a lot of ideas and whittled them down to their essence. Microsoft bills the Xbox 360 as not just a game box but "the center of your digital entertainment world."

Yet even as a hub, the Xbox 360 works as part of a larger system and has limitations, compared with a PC.

Microsoft conducted research to see if console owners wanted to browse the Web, but because that feature ended up scoring particularly low, it wasn't included, says Scott Henson, head of the company's advanced technology group.

"Should we let people access random blogs?" Henson asks. "Our feeling is that's not what gamers want in a family-room experience."

By not loading the Xbox 360 with all the extra options that a computer has, Microsoft has kept the cost of the box down to $399 for the version with the hard drive and $299 for the Xbox 360 Core version, without the hard disk.

To turn the Xbox 360 into a full-on ­entertainment PC, though, owners need to plunk down more than the console's initial purchase price.

Extending Media Center

As a companion, and not a replacement, to the PC, every Xbox 360 has a built-in Windows Media Center Extender.

This enables the console to access any movies, pictures, or music stored on a Media Center PC and stream it to the TV to which the console is connected , even if the PC and console are in separate rooms.

As long as the two devices are on the same home network, the console can stream the PC's content.

Unlike a Media Center PC, which stores its content locally, the Xbox 360 is mostly just a pass-through. The PC handles heavy-duty processing such as transcoding or storing, while the Xbox 360 decodes content and serves it up to a TV or stereo.

To connect the Xbox 360 to a Media Center PC, you have to download a utility to your PC. You install the free Windows Media Connect utility from the Microsoft Web site.

Adding Bling to Music, Photos

The Xbox 360 delivers some sparkle to your music listening. When you choose an audio file from your Media Center PC, it streams it to your TV set or receiver and displays a music visualizer that resembles a disco light show, moving and changing to the beat of the music.

You can attach Apple (AAPL) iPods and other MP3 players to the Xbox 360's USB connectors and stream MP3s from the iPod to the Xbox and its accompanying TV. But songs downloaded from Apple's iTunes in a protected Advanced Audio Coding music format won't be playable on the 360.

You can also rip audio CDs onto the Xbox 360's hard drive as WMA files but not as unprotected MP3 or Windows Media files. You can listen to these files via your portable music player or a Media Center PC, but you can't copy them to the hard drive.

Using the Xbox to view digital photos is simple, whether the source of the photos is a Media Center PC on the network, the Xbox hard drive itself, or an iPod, digital camera, or portable media device that's connected via USB cable. You can even attach your digital camera directly to the Xbox 360's USB connectors.

Video Conferencing

The company launched its Xbox Live Vision Camera in September for $39.99. Bundled with the Video Chat software and a year of Xbox Live Gold service (which allows you to play online games against others), the camera costs $79 and delivers a video-call-over-the-Internet experience.

The camera is the next step up from talking with your friends by text message or voice chat. Xbox Live handles this via a headset plugged into a game controller.

With the Xbox Live Vision camera, gamers can take pictures of themselves and upload those "gamer pictures" to their publicly accessible identification pages, called the "gamer cards," on the Xbox Live service.

You can start a private one-on-one video chat with a friend who has a video camera as well. And you can play with the colors and background images while you're talking with your friend.

Some games such as Uno on Xbox Live Arcade allow as many as four players to join in a video chatting session during the game. You can even send a message that makes your friend's controller vibrate while in either voice or video chat.

Recording and Watching TV

Watching live TV on an Xbox 360 Media Center Extender is also a simple remote-driven task. This feature is especially handy when your 360 is hooked up in a bedroom or away from your main television.

The Windows Media Center PC has to have a TV tuner card in it and must be connected to the Internet to receive electronic programming guide information.

If you have an ATSC over-the-air digital tuner card installed, you can even watch in HD; the 360's Media Center Extender supports any kind of HD content.

Using the remote, you can scroll through the listings — sorting shows by genre, for example, or searching by director or actor names.

If you want to record a show, you select the show on the guide and the PC will record it to its hard drive.

Windows Vista will expand the Xbox 360's viewing options. Using a Cable Card-based digital TV tuner, you'll be able to watch digital SD and HD cable via a Vista MCE PC.

Vista will also add support for DivX-encoded content as well, says Dave Alles, general manager of the Windows Media Center division at Microsoft.

Storage: HD DVD Costs Extra

When Microsoft locked down the Xbox 360 feature set in 2003, the company had no choice but to go with the current-generation DVD-9 drives as the primary optical storage format. The format war between the HD DVD camp led by Toshiba and Sony's Blu-ray was far from being settled.

If Microsoft had waited for drive availability, the console would not have been able to launch last year. But for going forward with the launch, Microsoft had to pay a price in terms of the ability to store games on discs.

This fall Microsoft is launching an HD DVD peripheral for just $199 in the U.S. That's not a bad price, considering that heavily subsidized standalone HD DVD players cost $500 and up.

Add an HD DVD player to the Xbox 360 and it ends up costing just as much as a similarly equipped PlayStation 3 with a built-in Blu-ray drive.

But unlike the PS3, the Xbox 360's HD DVD accessory is meant only for watching HD videos, not for playing game discs.

As an add-on device, the HD DVD accessory is really a must-have only for movie fans. Still, Microsoft chose HD DVD because it appeared to be more reliable, was easier to manufacture, and had a less-complicated copy protection scheme.

The HD DVDs can also include both a standard and HD version of a movie on the one disc. One side can be played in a standard DVD player; flip it over to play back in an HD DVD drive.

Pricing: $299 (core system); $399 (with 20GB hard drive)

Release date: On the market now

PlayStation 3

Sony wants to outdo Microsoft in just about every respect. The company has taken more time to perfect its technologies, but it's debatable whether some are really ready for prime time.

In an address at the Tokyo Game Show in mid-September, Sony international game chief Ken Kutaragi criticized PCs for having "bigger and bigger operating systems" and for losing their "real-time responsiveness."

He said that in the future the PS3 will be able to do numerous nongame functions, such as personalized agents for shopping and search.

New GUI, New Ways of Browsing

Sony's Kaz Hirai, president of the U.S. game division, added that the PS3's Web browser will offer a different kind of experience.

Hirai noted that the browser will enable a user to open a page and then set it aside on a portion of a widescreen TV. The user will then be able to open subsequent Web pages across the center of the screen.

"When you see this in action, it changes the experience of static Web pages," Hirai said. "We've always said we are first and foremost about entertainment. We are not necessarily looking to replace the PC, which is primarily a productivity tool in the den. The PS3 is geared for entertainment in the living room in the home. We are not overtaking the PC."

The PS3 will have a graphical user interface that resembles the "Cross Media Bar" on the PlayStation Portable. With that interface, the user can quickly scroll through a variety of functions for various kinds of entertainment.

Subtle, Yet Mind-Blowing, Graphics

Sony's $599 version of the box will offer 1080p HD resolution and HDMI connectors. That will enable it to cram about twice as many pixels onto a screen as an Xbox 360.

The machine's two teraflops of floating-point performance — twice that of the Xbox 360 — will drive the 3D experience. The bulk of the compute cycles are provided by nVidia's RSX graphics chip.

Hirai says you'll notice the details in human faces, which will look so real that you'll be able to tell from a game character's face whether he's lying or telling the truth.

Sony Chooses Blu-Ray (Of Course)

Sony's Blu-ray HD storage differentiates the PS3 from the Xbox 360. Blu-ray discs store 50 gigabytes of data, compared with 9GB on an Xbox 360 DVD disc and 30GB on Microsoft's add-on HD DVD

But it also adds several hundred dollars of cost. That's why the high-end PS3 will debut at $599 for a version with an 60GB hard drive, 5.1 Dolby surround sound, built-in Wi-Fi, and slots for memory cards.

The cheaper, $499 version comes with a 20GB hard drive. Sony recently decided to add an HDMI connector to the 1080p HD resolution it had already announced for the $499 version.

Hirai says most of the games are coming in at around 17GB of storage, and that validates Sony's decision to wait longer for the Blu-Ray storage technology.

$599 — A Value?

When Sony announced the price for the PS3 earlier this year, it recalled for critics bad memories of the $700 3DO game machines of the early nineties, which offered the great value of a built-in CD-ROM.

On the defensive, Sony cut the PS3's price in Japan by 20 percent. But in the U.S., Hirai has been beating the drum about the value that the PS3 offers consumers.

By putting the fresh Blu-ray technology into the machine, he says, Sony has future-proofed the machine for as much as a decade.

Of course, there is no telling whether or not Blu-ray will emerge as the winner in the battle with HD DVD.

Blu-ray has already been a problem for Sony because it led to not one, but two PS3 delivery problems: Sony drastically cut the number of launch units for the holiday season and postponed the launch in Europe until March.

PS Network: Still in the Cooker

As an entertainment hub, Sony is playing catch-up with Microsoft. And when it comes to online game play, Sony still has a long way to go.

The upcoming PlayStation Network is untested, and Sony isn't necessarily coming up with a software-and-service package that is as robust as Microsoft's Xbox Live, which also has had a four-year head start.

The PlayStation Network will feature downloadable games, online game playing and a digital marketplace. Hirai said he hopes users will create their own YouTube-like videos and photos that they can upload.

Specs and Add-Ons

The $599 PS3 will have Memory Stick/SD/CompactFlash card slots, built-in 802.11 b/g Wi-Fi, slots for seven Bluetooth game controllers, an HDMI port, a 60GB hard drive, and four USB 2.0 slots that you can use to connect digital cameras, video players, and PlayStation Portables.

Hirai says he is looking forward to connected game play between the PSP and the PS3. But the PSP's universal media discs, which store prerecorded movies, won't play on the PS3.

Sony has been pioneering the use of video accessories such as the EyeToy camera, which is a video camera that responds to gestures. Eventually, Sony will add an HD version of the camera, Hirai says.

Though much of the PS3's software supporting the nongame entertainment functions won't be ready at launch, Sony says that plenty of new and unexpected applications will show up over time.

One taste of such content is the interactivity built into the Blu-ray player, which will enable a consumer to take "target practice" with a controller on live HD video scenes.

So if you're watching an action movie, for example, you could fire away with a gun and watch interactive overlays create explosions on the screen. Hirai says this kind of entertainment will evolve over time.

Pricing: $499 (with 20GB hard drive); $599 (with 60GB hard drive, Wi-Fi, memory stick, SD, CompactFlash slots)

Release date: November 17, 2006

Nintendo Wii

Nintendo's Wii comes as close as possible to a pure gaming experience on a console.

Even though the console stores games on DVDs, players can't watch DVD movies on the machine.

George Harrison, senior vice president of marketing and corporate communications at Nintendo of America, says that the company had to cut costs and decided that most consumers could get a DVD player at Wal-Mart (WMT) for under $50.

So adding DVD playback would not have been a good value. The Wii also won't support HDTV resolutions, topping out at just 480p.

Nongamer Bait: The Wii Channels

Nintendo made one concession to practicality by bundling in a basic version of the Opera Web browser. That lets gamers browse the Web and connect to various Internet-based "Wii Channels" using the built-in Wi-Fi connectivity.

Nintendo wants to bring nongamers into the Wii environment, and that means getting them comfortable with its innovative, motion-sensing controller, Harrison says. Nintendo wants to use the Wii Channels to entice nongamers into trying out the machine.

The machine boots into the Wii Channel Menu and includes the Mii Channel, Photo Channel, Internet Channel, Forecast Channel, Shop Channel, News Channel, and a message board.

The Mii Channel lets you create a fun caricature of yourself. That Mii avatar can be used across a variety of Wii games and software.

You can store your Mii portrait directly inside the Wii Remote itself. And you can take that Wii Remote to a friend's house to play on another Wii console.

The Photo Channel lets you display digital pictures stored on an SD memory card on the TV screen.

You can also use the Wii Remote to manipulate the photos in fun ways: You can zoom or create mosaics, puzzles, or slide shows. You will also be able to draw on the photos, add stamps, and copy and paste objects into the photos.

The Wii Message Board is a calendar that family members can use to communicate with each other. It also lets you connect to people outside the home via the WiiConnect24 Wi-Fi service. You can trade pictures and text messages with cell phone users, or download a new map or weapon for a game.

The Forecast Channel delivers the latest local weather reports seconds after turning on the Wii. You can also navigate a 3D globe to view forecasts in other cities around the world. The News Channel gives you news in a variety of categories.

The Wii Shop Channel is where you go to buy Wii Points, which resemble the gamer points on Xbox Live. You can redeem these points to download classic video games from Nintendo's extensive back catalog into the Virtual Console.

The Wii console has 512 mega­bytes of internal flash memory, two USB 2.0 ports, and built-in Wi-Fi capability. It has a bay for an SD memory card to let players expand the internal flash memory.

Nintendo hasn't said what accessories will be available to expand the entertainment experience. But the presence of these ports offers some potential to expand the entertainment experience. Nintendo will enable connectivity between the Nintendo DS and the Wii over Wi-Fi connections.

Pricing: $250

Release date: November 19, 2006

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