Microsoft announced a deal with Marvel Enterprises to develop an advanced online game based on Marvel's well-known cast of comic book characters. This will expand the video game wars to new fronts.

Microsoft and Marvel Enterprises hoped to release their new game in 2008.

The deal extends Microsoft's competition with Sony, its prime video game rival, into the lucrative market for what are known as massively multiplayer online games. Last month, Sony struck a deal to make such a game based on characters from Time Warner's DC Comics unit, Marvel's nemesis. DC owns Batman while Marvel controls Spider-Man.

While traditional online games often allow only a few dozen players to occupy the same digital environment, like a racetrack or combat zone, massively multiplayer games allow thousands of people to simultaneously explore continent-size virtual worlds.

Massively Multiplayer Online games or M.M.O.'s, first burst into popular consciousness with the emergence of EverQuest in 1999, but the blockbuster success of World of Warcraft, released by Vivendi Universal last fall, has awakened the entertainment industry to the genre's potent opportunities.

World of Warcraft now has more than two million subscribers. In addition, most of those users bought the initial software. Taking into account the game's release in China last month, World of Warcraft is poised to generate revenue of more than $500 million this year.

Those figures have set off waves in the media business. But until now, the industry's quandary has been that users of massively multiplayer games have generally required powerful home computers, which can cost $2,000 or more.

The inexpensive game consoles like the Microsoft Xbox and the Sony PlayStation 2 that dominate the gaming market have not had the technical ability to offer a compelling massively multiplayer experience, though all of the nation's top 10-selling massively multiplayer games have been for PC's.

Now, Microsoft and Sony are each trying to bridge the gap between the pot of gold promised by a successful online game and the mass market that plays on consoles that plug into televisions.

Microsoft plans to release its new game console, the Xbox 360, later this year, and Sony plans to release its new PlayStation 3 in 2006. Each new console will be able to support advanced massively multiplayer games.

Beyond Spider-Man, the Marvel stable includes the Fantastic Four and the Hulk.

While massively multiplayer gaming has risen in popularity in the United States, it has become by far the most important sector of the gaming market in major non-Japanese markets in Asia like China and South Korea, which are dominated by PC's.

Making a massively multiplayer game for the Xbox 360 was a major part of Microsoft's gaming strategy in Asia.