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There's a top-secret 147-page internal document at Microsoft called "The Book of Xenon." Xenon is Microsoft's private code name for the Xbox 360, and "The Book of Xenon" spells out the company's entire strategy for it. Large chunks of "The Book of Xenon" deal with something it calls the D.E.L., which stands for the Digital Entertainment Lifestyle. This is shorthand for the notion that all media--movies, music, games, cameras, phones, TV--are becoming digital media, and that's changing how we relate to them and how they relate to one another. They're merging...
Which is why, in addition to games, the Xbox 360 plays CDs. You can also use it to rip songs off CDs and play them from the hard drive. You can plug your iPod into the Xbox 360 and play songs off that too. You can watch DVDs on it. If you have a digital camera, you can plug it into the Xbox 360 and pop the images up on your TV, which beats making everybody crowd around the computer monitor in your study. If you have sufficient techno-gumption, you can even connect the Xbox 360 to your...
That's not all. The Xbox 360 has ambitions as a communications device. Unlike either Sony or Nintendo, Microsoft has a fully fledged online service, called Xbox Live, to go with its game console, and with the launch of the new Xbox, Gates & Co. is hoping to turn it into a major online community with Friendster-like features that match up compatible gamers. Companies will use Live to distribute game trailers and sell mini-games and new game levels. It will be a free-for-all bazaar. Players will be able to customize games--say, the way the skateboards might...
Right now you can use Xbox Live to talk to people you're playing with via voice chat--think free long distance over the Internet. Soon you will also be able to send e-mail and instant messages. If you have a camera peripheral, you will be able to send short video messages and even videoconference. And here's an important point: with Xbox 360, you don't even have to be playing a game. You will be able to chat with other people over Xbox Live when you're just plain watching TV. The words appear over the show...
Gates is anxious that the extent of his ambitions not be overstated: "Think of it as not taking over the digital ecosystem but being a prime player in that digital ecosystem." Duly noted. But the question remains: Is Microsoft about to do in the living room with the Xbox 360 what it did in the office with Windows? Will it create a technology so well positioned and well marketed and so devilishly useful that it becomes the de facto standard and creates an insanely profitable quasi-monopoly around itself? As music and movies become more and more digital, the entertainment...