Video game fans queued outside Virgin Megastore in Dublin last night to purchase an Xbox, the next generation of gaming console launched in the European market.

The console, billed as the most powerful home gaming machine yet, marks the beginning of a massive marketing battle between Microsoft and Sony.

Microsoft has invested billions of dollars on its Xbox console and hopes to displace Sony's Playstation 2 (PS2) as the choice of the gaming community.

Gamers testing the Xbox in Virgin gave the console a mixed reception yesterday. Mr Rory Tester (26) said the console and the joypads were too big and the Xbox was far too pricey.

Ms Sarah Loomes (17) said she'd prefer an Xbox to a PS2 because she'd heard it was more powerful and the games were better. But Ms Lauren O'Toole was not convinced and said the price was a "rip off".

Microsoft is selling the console at €479.99 in Europe and games will cost €69 each. This is significantly more expensive than the $299 (€340) price of the Xbox in the US. The PS2 costs €334 here.

Most analysts believe Microsoft's entry to the games market is a gamble. But the firm wants to grab a slice of the $20 billion a year market. It also hopes to extend its dominance of the PC market to home entertainment by locating consoles in family living rooms.

The Xbox contains several innovative features including a powerful processor designed by Intel, a hard disk, a DVD drive and broadband internet connection.

Microsoft is spending $500 million marketing its console, which has already been introduced in the US and Japan. It will face a difficult struggle against PS2 and a new Nintendo console, the Gamecube, that will be released in May.

Microsoft would not disclose how many units it planned to sell in Europe yesterday. However, the company said it planned to ship between 4.5 million and six million by June.

More than 100 Microsoft employees at its Dublin operation worked on the Xbox project.