Sega Enterprises has finally settled on a strategy to beat Nintendo and Sony: it's going to use Windows CE in its next-generation game machine. While few details are known at this point, using Windows CE will allow Sega to easily facilitate online gaming over the Internet. The announcement came Thursday in Tokyo, while a video-taped Bill Gates, currently in Europe, offered his congratulations.

Sega has fallen on hard times lately, after trouncing Nintendo in the early 1990's with its 16-bit Genesis machine. Nintendo bounced back with the Nintendo 64, however, and along with the Sony Playstation, has relegated Sega to third place. Sega's current-generation machine, the Saturn, is selling relatively poorly compared to its competition. Analysts had previously expected Sega to drop out of home hardware and simply produce titles for PCs and dedicated game machines