MS shifts XBox strategy.

[mookydooky]

In the near future, MS will offer the same game titles for both PC and XBox. Software developers will be able to use the same code for both platforms. Eventually, MS plans to make XBox a peripheral for PCs and home entertainment. Whether this is good or not, I'm not sure. All I know is I'll be able to play XBox games on my PC pretty soon, which can't be all bad.

Article from the NY Times

Big Changes Are Planned in Game-Software Strategy
By JOHN MARKOFF

Published: March 25, 2004


SAN JOSE, Calif., March 24 - Microsoft announced a new software development strategy Wednesday that aims to blur the distinction between its PC game and Xbox video game console businesses.

Under the strategy, which the company calls XNA, a developer of game software would be able to write a single program that could be translated for use on Windows PC's, on Xbox video game consoles or on mobile hardware systems.

The company described its new strategy at the Game Developers Conference attended by about 10,000 software developers here this week.

Microsoft and Sony, which is the leading maker of video game systems, are hoping to invigorate software development companies while the industry waits for the next generation of game consoles.

The game industry has traditionally moved at a slower pace than the PC industry in adopting new generations of technology, as the makers of video game machines try to take advantage of falling costs of producing their systems over periods of up to five years or longer.

The Microsoft announcement is the clearest evidence yet that the company, which is struggling in a distant, unprofitable second place in the video game business against Sony, is trying to make its next-generation Xbox game machine more of a peripheral device connected to the PC in the home.

Today, Microsoft executives refused to comment on the new device, the Xbox 2, which is not expected to reach the market until late next year at the earliest. Instead they focused on the XNA strategy.

"Previously the game industry has been defined by hardware," said J. Allard, the Microsoft vice president in charge of the Xbox business. "We believe we can break that cycle."

Industry executives, however, said the company was also moving to try to stanch the flow of red ink from its game business. Last year the company severed its business relations with Nvidia, a maker of graphics chips, instead signing a contract with another manufacturer, ATI, in an effort to gain better control of the costs associated with each device.

Currently, each Xbox is sold at a loss, in the hope that Microsoft will make up the difference in the sale of profitable game software.

In addition to searching for a cheaper graphics processor for the Xbox, Microsoft has broken its game relationship with the chip maker Intel and is planning to use an I.B.M. processor in its next Xbox. The company has also struck a relationship with an Israeli based flash-memory company, M-Systems, and many industry executives predict that some or perhaps all of the company's next- generation Xbox's will come with flash memory instead of hard disks.

When Microsoft originally introduced the Xbox it had argued that a built-in hard disk would offer a performance advantage over machines made by Sony, which use DVD's, and Nintendo, which use read-only-memory cartridges. In the future, industry executives close to Microsoft's planning, the Xbox will be offered as a peripheral device for other Windows-based computers already in the home. In such a model, the game console might be connected to a home PC's hard disk and the Internet via a high-speed wireless or Internet connection.

While the Microsoft announcement was short on details and on delivery dates, a number of software developers here applauded the shift in strategy, saying that it could potentially give the company an advantage in the game software market.

A number of industry executives also noted that Microsoft was using the same strategy - leveraging its monopoly software position - that has previously placed the company in legal difficulties.

In this case, however, the company is using its dominance in the PC industry in a way that is unlikely to provoke a legal challenge, they said.