Xbox 360 and iPod interoperability? Sort of

If you play "Project Gotham Racing 3" on an Xbox 360 after the console hits stores later this month, Microsoft invites you to use tunes straight off your iPod as an alternative to the game's sound track.

Officially, the company says the new console can stream music from just about any MP3 player. But during a preview of the next-generation console in San Francisco last month, Microsoft execs talked up the interoperability between iPods and the Xbox 360.

"When you plug your iPod in," Xbox digital-entertainment executive producer Jeff Henshaw told CNET News.com, "the Xbox 360 automatically detects that it's there. You can browse by artist or album or genre or by custom playlist."

News.context

What's new:
Microsoft has been demonstrating the Xbox 360's interoperability with the iPod. Apple, however, isn't on board.

Bottom line:
While the Xbox 360's streaming capabilities push it a step closer to being a multi-entertainment box, it's unclear how long consumers will be able to import tunes via their iPods. One analyst went so far as to predict that Apple will fight back once the new console launches.

More stories on next-generation consoles

However, because of the iPod's digital-rights-management software, the Xbox 360 cannot stream songs purchased from Apple's iTunes Music Store, Henshaw said.

There's a reason for that: Microsoft built its iPod connection without the support of the folks at Apple.

"We do not have an official relationship with Apple for the iPod connectivity," said Scott Henson, product unit manager in Microsoft's advanced technology group. He maintains that "Xbox 360 leverages standard protocols such as USB mass storage to enable iPod support."

Henshaw said Microsoft tried to "engage" Apple in a partnership that would have officially made the iPod interoperable with Xbox, but Apple rejected the overture.

"So we went in and built all of the support we could," Henshaw said. Microsoft plans to release the new Xbox in North America on Nov. 22.

Apple has been pitching a very different approach for those who want to connect to its popular music player. Through its so-called "Made for iPod" program, the Cupertino, Calif., company is attempting to collect royalties from the maker of any accessory device that interfaces with an iPod through its "dock connector."

Apple would not comment for this story.

iPod owners will be able to connect their digital music devices through one of the Xbox 360's three high-speed USB ports. They'll be able to access an Xbox menu that will let them scroll through songs, artists, genres and the like and select songs to play in games' backgrounds. Users will also be able to stream photos off their iPods for playback of slide shows on the Xbox.

"We expect Apple will have some retaliation ready within days or hours of the Xbox 360 shipping."

--Richard Doherty, president, Envisioneering

Henshaw said the Xbox 360 would be able to stream any standard MP3 file or AAC file from an iPod, but not protected songs purchased through the iTunes Music Store. Those songs, he said, will appear grayed out in menus on the Xbox.

He also said that Microsoft was working around Apple's assertion of control over the iPod's dock connector by making the "Xbox 360 use a very standard USB port for connectivity. We just rely on the USB cable that Apple ships with iPods."

Henshaw wouldn't comment when asked if Microsoft had had to perform any reverse engineering in order to get songs to stream onto the Xbox 360 from an iPod.

But Neil Benson, the creator of iPodcopy, a software package that enables users to move music off their iPods, said making this connection is more complicated than Microsoft is letting on.

"The trick is finding the right files," Benson said. An iPod "scatters the music files across random directories and renames them, so they're really hard to find."

iPods have a database that cross-references the location of music files and their names so users can select them through the device's menu. Microsoft would have had to include simple software in order to engage that database, he said.

"They have to read that database to get a list of songs on the iPod and present that to the user," Benson said. "Once a user has selected what song to play, then you use the database to find the song and play it."

Stealing Apple's thunder?
In any case, the iPod isn't the first Apple connection to the Xbox 360. Because the new game console uses an IBM chip similar to the G5 in Apple's Power Mac, Microsoft used the Apple desktops to test out early Xbox titles.

Some industry observers are applauding Microsoft for designing into the Xbox 360 the ability to stream in music.

"I think it's one of these things where these game systems are becoming more and more like computers in terms of their functionality and their focus on multi-entertainment," said David Cole, president of DFC Intelligence, an entertainment industry analysis firm. The Xbox 360 "is still focused on games, but there's a nice overlap with folks who consume (other) types of entertainment and music. So I think you'll see more and more of those features added."

But because Microsoft is not working within the "Made for iPod" program, Cole thinks Apple may object to the Xbox-iPod interoperability.

"I think it depends on whether (Apple sees) it stealing any of their thunder," said Cole. "The fact of the matter is, Microsoft has been a big software and services competitor (of Apple's). And that might cause (Apple) more worry than if it was Dell or somebody else."

Last year, Apple fought back furiously when RealNetworks took the iPod's inner workings into its own hands. In that case, RealNetworks overcame Apple's proprietary technology to let people move songs from its online music store onto the highly popular, but incompatible iPod.

Richard Doherty, president of analyst firm Envisioneering, went so far as to predict that Apple will fight back once the new Xbox launches.

"We expect Apple will have some retaliation ready within days or hours of the Xbox 360 shipping," Doherty said, referring to potential new iPod firmware or a new version of iTunes that could disable interoperability. "If you have iTunes prior to last May, it may work with the Xbox 360 forever, but if you accept (Apple's) updates, it may work differently."

For its part, Microsoft said it hopes Apple will not take steps to hamper the interoperability.

"It would be unfortunate if that happened, because people are enjoying the flexibility," said Henshaw. "It would be unfortunate to see Apple inhibit people's ability to enjoy their own music."

CNET News.com's Ina Fried contributed to this report.