No question about it: The popularity and revenue of games and game devices are reason enough for Microsoft to enter this arena.
More than half the population
But gaming in general, which is console-based, and online gaming, which is largely PC-based, need to converge, since few consoles yet have Internet connectivity. Like PlayStation 2, Xbox is aimed at bridging that gap since it recognizes that gaming as a social activity better suits a portable appliance in the living room than does a PC.
By itself, Xbox offers significantly more performance headroom than the PlayStation because of its PC-class 733-MHz Intel processor and 64MB of memory. Developers of high-end PC graphics can write to it without the delay and difficulty of porting to another processor, and the extra graphics capabilities built into the Pentium III and Pentium 4 will give the console enormous room to grow.
Game boxes send output to the TV set, and the Xbox is one part of a two-prong Microsoft thrust into the non-PC arena--the other is its interactive Ultimate TV launch. This, along with Microsoft's .Net application-hosting initiative, signals Microsoft's awareness that the browser-connected Windows desktop can only go so far and last so long as the dominant computing metaphor. The market is moving steadily toward a residential, multi-application and multiply-connected environment.
Microsoft is also testing the waters with cell phones, but their screens are too small to offer good gaming. The midsize gamebox, e-book and personal digital assistant offer the ideal portable technology for gaming and other personal video applications. And it is no accident that both PlayStation 2 and Xbox can double as DVD players.
While games generate significant revenue, the Xbox is well positioned to become a delivery application for all sorts of mobile computing activities, including entertainment, productivity applications for mobile workers, personal interaction, and .Net-type application access. As Bluetooth and high-bandwidth wireless connectivity begin to free the interactive world from cables and desktops, Microsoft has begun to position itself to be once more the broad-spectrum, generic technology for the average user.
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