Microsoft's X Factor

New Xbox 360 brings PC to the living room

When Microsoft's Xbox 360 shows up in stores this week, it will offer more than just life-like graphics and improved online play for such games as Madden NFL 2006 and King Kong. The 360 will have enough processing power and network connectivity to bring streamed and downloaded video straight to a TV screen.

The Xbox 360—not to mention Sony's PlayStation 3 (due to arrive next year) and other hard-drive–based, next-generation gaming consoles—is moving well beyond basic gaming. For content owners, that means another media platform to explore. “Both the Xbox 360 and PS3 have the capability to act as portals onto other content beyond games,” says Michael Gartenberg, VP/research director, Jupiter Research.

Indeed, the new systems are about more than games. Built into Xbox 360 are Windows Connect, which lets users access music files and pictures from a PC, and Media Center Extender, which allows users to stream content from a Media Center PC to an Xbox hooked up to another TV in the home. The Xbox will also use wireless technologies, eliminating the need for cables running from PC to TV.

“If the user has a Media Center Edition 2005 PC, they can have instant access to all the live and recorded TV on that PC,” says Jeff Henshaw, executive producer, Xbox Digital Entertainment. “And if you carry music and photos around on a portable digital audio player or camera, you can plug them directly into the Xbox for music or a slide-show experience.”

Microsoft continues to push the envelope. The software giant says that, by the 2006 holiday season, its Media Center PCs will be digital-cable–ready, meaning that a cable-TV connector and CableCARD module can be connected directly into the PC, delivering TV content to it.

The Xbox 360 and PS3 are intended to achieve what computer manufacturers have largely been unable to do for the past decade: Bring the PC into the living room. The convergence of PC and TV has attracted lots of industry buzz thus far, but not a lot of consumer interest. And while PC manufacturers have tweaked designs to make computers more suitable for a living-room environment, they still remain largely tucked away.

The Xbox and PS3 could change that. Besides video, the Xbox will offer free voice and text messaging, as well as voice chat through headsets. One feature that will interest traditional TV networks is the Xbox Live Marketplace, which will give users an online shopping experience, complete with sampling and purchasing game content. A 20-gigabyte detachable hard drive will be available for storing music, games and other content.

“The possibilities the Marketplace opens up are endless,” Henshaw says. “As TV networks look increasingly to digital services, the Xbox 360 will be an exciting platform.”

The power of the devices is just being tapped. The Xbox 360 CPU has three symmetrical cores with 3.2-gigahertz processors featuring two hardware threads (or series of program instructions supported by hardware) per core. This means that each core is a virtual microprocessor and can handle such tasks as user interface, graphics and artificial intelligence for game characters. Because those processes don't have to share a single thread (as in the original Xbox), performance is improved by more than 10 times in terms of speed, quality of graphics and even audio, compared with the original.

All this power means game consoles can create a virtual 3D graphical representation of a real-life sporting event occurring at the same time, notes Hank Adams, CEO of Sportvision, which provides high-tech data and graphics for sports telecasts. “Fans would be able to move the camera to wherever they want for any angle,” he says. “If you want to see what the race looks like from the front bumper of Tony Stewart's car, you can do it.”

The next step is putting the viewer in the game, he adds. A NASCAR game would take a two-way data channel: one to push data to the console, the other to pump it back to let the system know where the gamer's car should be in relation to the actual cars. That could mean new revenue streams for the racing outfits and their broadcast partners, if gamers were to pay for real-time simulations and data.

One new Xbox game, Project Gotham Racing 3, moves towards that interactive future, says Henshaw: “A feature called Gotham TV lets people tune into a race and watch how other gamers are negotiating turns and overtaking cars.”

While the gaming community is growing, the industry is clearly targeting more of the population than just gamers. Says Henshaw, “If we can bring people together and let them form new communities around their games, music, photos, and even TV and movies, it'll be one fun ride for all of us.”