Microsoft's X-File

A few months ago, I did a piece on Sony's Playstation 2 which certainly generated a lot of interest from people. A few weeks after that, I did a piece on NUON from VMLabs. Now, it's Microsoft's turn.

Never one to turn a blind eye to a profitable idea, Bill Gates' behemoth is eyeing the video game market.

To say a lot is known about Microsoft's new console (which is currently code-named "X-Box") would be an outright lie. Microsoft hasn't announced the technology as of yet. In fact they deny that it even exists at this point. Every piece of information about the console (including the information presented here) is rumor and conjecture based on reports from "unnamed sources". It does raise some interesting questions, and a lot of technology has been discussed which is very interesting.

Microsoft is planning on using a high end CPU in the unit (either a high speed Intel Celeron, Pentium III or an AMD Athlon), coupled with a decent size hard drive and, of course, an amazing 3-D graphics chip set The unit will (of course) be Internet-ready out of the box, probably through a regular modem, with an option to go broadband (cable, ADSL). Add to this a DVD drive, and of course it becomes quite obvious why I'm writing about this unit here.

The machine will be marketed for games, movies and as an Internet appliance. Probably in that order of importance.

The speed of a high end CPU like the Athlon or Pentium III would certainly provide enough kick for a unit like this, and the 3-D chip sets which have been discussed (NVidia's GeForce, for example) have enough horsepower to give the Playstation 2 and Dolphin a run for their money. Microsoft is planning on bundling the unit with a modified version of one of their operating systems (currently rumored to Windows 2000).

Of course, with all these components being so familiar to PC users, a lot of people are asking the question, "isn't it just a PC in a set top box?"

The answer to that question is yes and no. Microsoft is aware that the only way to get a "set top box" like the X-Box into homes is by having it play great games. Several companies have released "multimedia devices" and "set-top boxes" in the past, with less than overwhelming success. Luckily, the PC market is loaded to the gills with great games like Unreal Tournament and Total Annihilation. Plus, the PC market also has a ton of mass market games. Everything from computer versions of old board games to Deer Hunter to Myst.

Microsoft is aware that should they release a set-top box which is essentially hardware compatible with a PC, the developers will come. So it seems easy, right? Release a box with a bunch of great games, then watch the money roll in.

Not so fast.

The PC is also plagued by buggy game syndrome. It's not uncommon for a game to be released, then followed up by several patches to fix bugs (or "errata" as industry people like to say) in the game. Essentially, the end user becomes the beta tester. In a sad state of affairs, PC users around the world have become accustomed to this, and resigned to their fate.

Console users, on the other hand, expect more. They expect a product to be released bug-free, ready to plug in and play. No fuss, no muss.

Also, it's not expected that Microsoft will require any licensing fees from the game publishers. Any game developer can release any product they want. While this is great for the publishers, it's not necessarily good for the unit or for the gaming industry as a whole.

Sony, Nintendo and Sega all receive a licensing fee for any game released for one of their units. Any game released for one of their consoles also has to go through an approval process. This means that certain standards (which vary from company to company) must be enforced before a game can be released. It doesn't always work (the Playstation, for example, is notorious for having a load of garbage games even after Sony's "stringent" licensing requirements), but it does keep the amount of junk down. One only has to look at the number of Pac-Man and Mah-Jongg games (some combining both games!) released on the PC to realize that licensing requirements are not always a bad thing.

Should Microsoft decide that they want licensing fees for any games released on the X-Box, then they have another battle. In a classic case of chicken and egg syndrome, developers won't want to pay licensing fees before units are sold, and units won't be sold before games are available. Microsoft could do an end run around this one, though, by using some of their own titles to kick-start the unit.

Microsoft is not planning on building the X-Box hardware themselves. Instead, they've come up with a design which can be licensed to hardware partners (rumored partners include Dell and Gateway) who would build the actual unit. It's also worth noting that this approach has been tried before. Apple tried the same thing with the Pippin (which was a set-top Mac, licensed to Bandai), and 3DO's Multiplayer marked the first serious attempt at licensing the hardware to outside manufacturers. Every time this has been tried in the past, one big monkey wrench has been thrown into the works.

Whenever a big company has entered the videogame market, and achieved any level of success, the money has not been made on the hardware, but instead on the games. If Microsoft wants companies like Dell or Gateway or Compaq to build X-Boxes, then those companies must be able to make money off the hardware. If Sony is willing to lose $200 on every Playstation 2 sold, how will the X-Box compete?

Now, if Microsoft does decide to charge licensing fees, and they share those licensing fees with the hardware manufacturers (i.e. $5 licensing fee per game sold for X-Box, $3 to Microsoft, $2 shared among hardware manufacturers based on their share of the X-Box market), then the hardware people would have an incentive. Otherwise, it'd be pretty much a lost cause for them.

Also, one has to wonder how much flexibility there would be in the X-Box's design. PCs are notorious for their upgrade cycle (if you're a heavy duty gamer, you need to upgrade at least once a year), but if the X-Box is a closed box (which it is expected to be), what happens when the next iteration of processor or graphics chipset comes out? Does the X-Box get upgraded or remain static? If it remains static, game performance will suffer dramatically over the years, because PC games always expect more hardware. Console gamers are accustomed to a five year life cycle for their units, and they're not going to like the idea of upgrading every two years.

None of this takes into account the ill-will people feel toward Microsoft. Very few companies have been successful while simultaneously reviled by the public. Alternate operating systems like Linux are taking off because people are tired of not having a choice. If you ask someone why they use Windows, nine times out of ten times the answer is because they have to, not because they want to. If you asked people how they would feel about a Microsoft car or a Microsoft toaster, they'd laugh in your face. People have had it with Microsoft (as happens with any monopoly). Why would gamers be any different?

If Microsoft does decide to release the X-Box, they'll have an uphill battle on all fronts. But the one thing we all should've learned over the years is to never underestimate Bill Gates. After all, he became one of the richest men in the world by marketing other people's ideas, he has taken over entire markets even though he's always late to the party, and if one of his companies doesn't win a battle, he buys the battlefield (Microsoft Dreamcast, anyone?).

I haven't received enough comments on last week's Dick Flicks article to post a follow-up yet, so keep 'em coming in. I have received a few good ones, though, so a follow up is inevitable at some point.

Last week's quote was answered correctly in about six seconds by none other than Daniel Morrell (again). He was the first person to correctly identify the quote as being from Sylvester Stallone's Rocky. Daniel becomes the first person to be first in with the quote of the week three times...will he go for four? (Do you feel like you're watching Who Wants To Be A Millionaire yet?)

This week's quote is from a movie which is in a completely different vein than Rocky (and no, it's not a vampire movie).

"See you around the cell block, Mrs. Robinson"

As usual, if you know where the quote is from, email me at ken@dvdfuture.com. This week's winner will receive an anti-dick-flick, You've Got Mail with Tom Hanks and Meg Ryan. I would say something witty about this DVD, but honestly, I haven't watched it.