Gamemakers Nintendo, Sony, and Microsoft engaged in a Clash of the Video-Game Titans at the Electronic Entertainment Expo recently, each unleashing a sample of the power and fury of its forthcoming game console to the amusement of diehard gamers everywhere. Microsoft will be first out of the gate this fall with Xbox 360, but Sony and Nintendo are slated to follow soon thereafter with the much-anticipated Playstation 3 and Revolution game consoles.

Early reviews of the machines reveal no clear winner, but each video game console comes with certain features sure to turn heads. Sony's PlayStation 3 stands out for realistic game demos, high-definition digital video disk technology, and eye-popping console design. Microsoft's Xbox 360 integrates with Windows PCs, the Internet, iPod, and certain handheld devices; it's also the first console for which all the games will be in high-definition wide screen, with Dolby 5.1 surround sound. Nintendo's Revolution will be capable of playing virtually every game in Nintendo's history.

These space-age "toys" certainly dazzle and amaze. But why do game-console makers seem so willing to lose billions of dollars year after year on the production and promotion of these futuristic media boxes? Analysts point out that what's at stake in this heated competition is nothing less than the absolute control of our living rooms. With the mainstreaming of video games in recent years, a technological revolution has taken place; the U.S. living room has transformed into a digital, wireless, networked nerve center. With the release of each new generation of game consoles that integrate to TV, the Web, digital-music players, and anything else that can be reduced to zeros and ones, developers come one step closer to world media domination. Companies like Microsoft expect to make good on their stealthy "living-room strategies," grand schemes that will change forever the way we consume music, movies, photographs and television.