by Microsoft sees a future for an expanded Xbox
By Brier Dudley
Seattle Times technology reporter
Microsoft has long downplayed speculation that it plans to make the Xbox
more than just a video-game console.
But top executives have let it slip that they indeed have broader ambitions
for the newly priced $199 device.
In recent speeches around the country, Chairman Bill Gates and Chief
Executive Steve Ballmer talked about plans to add television controls to the
Xbox and develop a device combining the features of a game console,
computer, TV set-top box and music player.
The disclosures shed light on Microsoft's ambitions for the
home-entertainment market and its vision for tomorrow's home computer. They
may also be significant in light of the antitrust case, where a key issue is
whether Microsoft will use its monopoly on PC operating systems to gain an
unfair advantage in emerging markets such as set-top boxes, media players
and services delivered over the Internet.
Gates and Ballmer disclosed their plans shortly before the game industry's
biggest trade show, the Electronic Entertainment Expo in Los Angeles next
week.
Microsoft is expected to announce at the show its plans for an online Xbox
game service. But a company strategist said it won't discuss broader plans
for the console because it's trying to build its reputation among developers
who may not want to write games for a multipurpose device.
But Gates and Ballmer apparently cannot hide their enthusiasm for the
potential of an expanded Xbox, which could help Microsoft extend its
presence in homes.
Gates and Ballmer may also see Xbox as a vehicle to deliver Microsoft TV
set-top box software.
"It's a lot of fun to be doing a product like that, but it's also a product
that, because of the rich capabilities, will really kind of surprise people
how that fits into the home network,'' Gates was quoted in a transcript of
an April 25 discussion at Stanford University.
"Because it's a full-blown computer with a disk, we'll be able to let people
have music and photos and TV guide, and as you're watching TV, if there's a
sports score that's interesting to you, you have that appear exactly the way
you want it ... ."
Two weeks later, the company said it had developed an electronic TV guide
similar to those used by cable-TV companies.
The Xbox, launched Nov. 15, is basically a Windows-based PC with a hard disk
that could enable it to record and play television shows. It also has a disc
player that can handle music CDs and DVDs and built-in components for
broadband Internet connections.
Steven Guggenheimer, senior director of consumer strategy at Microsoft,
declined to discuss new features planned for the Xbox. He downplayed the
disclosures, saying the company is focused on the Xbox's * potential
while the executives are talking about the future. "In general, Bill and
Steve get very enthusiastic about these technologies,'' he said. "They like
to talk about the possibilities."
Ballmer said the company is working on a multifunction device that could be
sold at low cost and prove attractive to households that may not see the
value of a computer. His remarks came May 11 in New York at the Blacks in
Technology Summit.
" ... There will be a day in the next five, six, seven years when you'll be
able to buy a device ... for maybe $500 or $600 that's your TV, that's your
CD player, your DVD player, it's your video-game player, it's your PC, it's
your Internet access device and it's your TV tuner all in one ... ,'' he
said.
With music, movies and photos increasingly digital, many companies are
trying to develop devices combining features of computers, set-top boxes and
music systems and Internet access.
In January, Prudential analyst Hans Mosesmann reported Microsoft was
developing "HomeStation," an Xbox-based device that would allow users to
record television shows, play games, surf the Web and do e-mail. Microsoft
declined to discuss the report.
One reason for the silence may be the antitrust case. Wednesday, the judge
overseeing the case asked lawyers for more information about how the company
could threaten emerging markets for set-top boxes and services delivered
over the Internet.
States pursuing the case argue that new devices and services may evolve into
platforms that compete with Microsoft PC platform if the company's
anti-competitive business practices are limited.
Company spokesman Jim Desler said the case is about Microsoft's monopoly on
the PC operating-system market, and it has no such monopoly on other
markets.
Copyright ? 2002 The Seattle Times Company