Posted on Sun, Feb. 01, 2004
Microsoft leaks details on Xbox Next
PLANS REFLECT HARD-FOUGHT BATTLE WITH SONY FOR GAMERS' DOLLARS
By Dean Takahashi
Mercury News
Microsoft has quietly circulated the specifications for its
next-generation Xbox video-game console, indicating how the company
plans to carry on its war against dominant player Sony.
The details suggest Microsoft is far more concerned about keeping the
cost of its Xbox Next console low than it is with including dazzling
technological features or driving its rivals out of the business,
according to a variety of industry sources.
People familiar with Microsoft's strategy say the company apparently
believes it can capture a much larger share of the market if it
launches its machine before Sony fields its PlayStation 3 console in
2006.
A Microsoft spokeswoman declined to comment on strategy details.
The new Xbox reflects some tough lessons learned in the current
console battle, in which Sony has outsold Microsoft 5 to 1. The Xbox
has put Microsoft on the map with a generation of gamers. But it has
also been a money loser, albeit a relatively small one for a company
with $53 billion in cash.
Microsoft launched its Xbox console 20 months after the PlayStation 2
debut. By the time Microsoft sold 1.5 million consoles, Sony had sold
more than 20 million PlayStations. To date, Microsoft has sold 13.7
million Xboxes, while Sony has sold more than 70 million. In the
United States alone, console sales amounted to $3 billion in sales
last year.
For gamers, the new Xbox will be impressive, giving them the ability
to play fast-action, realistic 3-D games on a high-definition TV set.
Microsoft's emissaries have told industry developers and publishers
that the next Xbox will be ready to launch in fall 2005 with the
following specifications:
. Three IBM-designed 64-bit microprocessors. The combined power of
these chips means the Xbox Next will have more computing power than
most personal computers. The chips are used in Apple Computer's
high-end G5 PowerMac machines now.
. A graphics chip designed by ATI Technologies with speeds much faster
than its upcoming R400 chip (correction: R420, not R400) for the
personal computer. This chip will help the next Xbox to display games
with the resolution of high-definition TV.
. Compatibility with the original Xbox, which is based on Intel and
Nvidia chips, isn't guaranteed. Microsoft is concerned it would cost
too much money in hardware or in licensing fees to enable the Xbox
Next to play old Xbox games. This is risky in part because Sony's
strategy has been to maintain compatibility with its old consoles.
``I can't imagine that Microsoft would be so insanely stupid as to
make it incompatible,'' said Jon Peddie, an analyst at Jon Peddie
Research in Tiburon.
Microsoft is leaving itself wiggle room to react to competitive moves
by Sony and Nintendo. A few details are to be decided. In contrast
with the current Xbox, the next one will have no hard disk drive --
unless Sony puts one in the PlayStation 3. Instead, the console will
rely on flash memory to store saved games and permanent data, much
like the current PlayStation 2.
The machine also will have about 256 megabytes of dynamic random
access memory. But Microsoft will upgrade that to 512 gigabytes
(correction: 512 MB, not GB) if Sony puts in more. The previous Xbox
had 64 megabytes. And lastly, it isn't clear if Microsoft will include
the current DVD video technology or Blu-Ray, its successor. Blu-Ray
will hold much more data, but it's unclear when it will be ready for
market.
The current Xbox has an eight-gigabyte hard disk drive. That drive is
useful for online games and storing game art, but many developers
chose not to make use of it. As a result, Microsoft seems to have
decided that saving the $50 the hard drive costs outweighs its
benefits.
In telling the developers what will be in the box, Microsoft is
helping them get started on games that will be ready when the console
launches. But it is also soliciting feedback, and some developers are
pushing Microsoft to make changes.
``I would really like to see a hard disk drive in the box,'' said Tim
Sweeney, chief executive officer of Epic Games in Raleigh, N.C., who
has made his opinions known to Microsoft. ``For a console to really
have a useful online component, it has to have the hard drive to store
downloaded maps and other data.''
Sweeney says it is dangerous for Microsoft to wait until Sony reveals
the details of the PlayStation 3 or to pay too much attention to cost
issues.
``Sony isn't as motivated to launch a new console because it is No.
1,'' he said. ``If Microsoft waits for them, it is in effect allowing
Sony to design Microsoft's box.''
Regarding cost issues, a Microsoft spokeswoman would only say,
``Microsoft is in this for the long term.''
Developers like Sweeney say they are pleased it will be apparently
easy to develop games for Microsoft's new box. That was one of the
main advantages that Microsoft has had over its rivals. Current
information about the PlayStation 3, sketchy as it is, indicates that
it could be extremely difficult for developers to master.
The top executives of both Electronic Arts and Activision said this
week that they have not received formal ``software development kits''
from Microsoft yet, but they did say they have begun creating
next-generation games. Internally, Microsoft has begun developing game
prototypes, and it is using G5 systems to do so.
The same developers who have seen the Microsoft specifications say
Sony hasn't shared as much data with them. Sony appears to be willing
to wait until 2006, in part so that it can milk the profits from the
current generation PlayStation 2. In the meantime, Sony is launching
an all-in-one PS 2/video recording box dubbed the PSX and the
PlayStation Portable.
Microsoft's schedule may change -- it has a big meeting coming up for
developers this month. But for now it appears it will release
information about the new box at both the Game Developers Conference
in San Jose in March and at the Electronic Entertainment Expo in Los
Angeles in May.
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