Microsoft moves into chip world with Xbox

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I didn't think you would...: I didn't think you would remember, John C, what you'd said two years ago. Certainly I don't remember more than the outline. We both write and read so much that the details of any particular discussion fade into the blur.

I know I've changed my opinion on many things over the years as I'm sure you have as well. I don't count that against either of us - thinking people change their minds as new facts are presented and absorbed. Your opinions have changed on #1, but I think at the time you were only arguing from the wrong guess.

We never had a conversation on #3 before now, at least not an extensive one. My take is that because both the X-box and the Windows PC rely on DirectX for rendering that an author can easily target both with no difference in fuctionality. If a consumer plays games; they choose a product to play games - there are many who need no other functionality. They can choose a high-end gaming PC (typically 600-700 USD) to do so, or can buy a standalone unit, an Xbox, for 1/3 the price. The products play the same games, so which will the consumer choose? If the answer is the lower-priced product; does this not decimate (in the truest sense a 10% drop in sales) the gaming PC market? Would this not put Microsoft in competition with their own customers? Does this not also make the Xbox more saleable in the early stage, where it is better than the commodity PC, and less saleable in the later years, when the PC outpaces the reference design? They're both competing to be a primary gaming platform.

I see we eventually drifted to agreement on #2. I'm not an economist, but I'm overjoyed to have an occassional useful insight.

At the time, pre-release of the Xbox I specifically remember you making the claim that the Xbox would be marketted and produced by the OEMs. Why do I think that this will never be the case? To be saleable the Xbox is sold as a loss-leader (correct term?) and the money made on the games - cheap holders, expensive razors, as they say. OEMs wouldn't be able to collect royalty money off the sale of the games, can they? Unless every OEM were given a small slice based perhaps on percentage sales, perhaps? Would that small slice make up for the loss leader.

Now sadly, ZD-Net won't permit us to argue this in great detail, but we can carry this discussion through privately. Always interested in your opinion.; Posted by: John Le'Brecage Posted on: 11/10/03 You are currently: a Guest | Members login | Terms of Use