- After several days of internal consideration Microsoft executives have said that they will not be producing a Blu ray Xbox 360. Instead the Company is working on a brand new gaming and entertainment solution that will replace the current Xbox 360.
The device will go head to head with a new home console from Sony that is both a gaming console and content management system. It is not expected to be launched untill late in 2009 or early 2010. Key to the new Microsoft offering according to a development engineer is IP content which Microsoft believes is the future for both gaming and home entertainment.
During the past 12 months and at the recent CES Expo in Las Vegas, both Sony and Microsoft have met with global telecommunication companies to discuss home gateways and the delivery of IP content into the home and their new gaming and entertainment consoles.
In Australia senior Telstra executives have said that the future is not Blu ray but Blu ray quality content delivered over an IP network or via content kiosks. Telstra have also said that they want to deliver both games and entertainment content to both the new Sony and Microsoft devices with consumers given the option of either downloading the content to the device or picking up the content from storage kiosks located at Telstra mobile stores and at key public transport hubs.
David Moffett the Group Managing Director, Telstra Consumer Marketing & Channel met with several global Companies including Microsoft at the 2008 CES event in Las Vegas and he is adamant that the future is IP delivery of content over Blu ray. He is also working to deliver content to kiosks in over 1700 locations so that consumers can pick up games and HD 1080p content. He also believes that Toshiba made the right decision in pulling out of the HD DVD content battle and that they will benefit from the transition to IP based delivery over time.
"IP technology will absolutely change the way content is delivered and stored. Toshiba are a fine company and their move into expansion of Flash NAND storage will see new storage technology in mobile phones and storage devices. This coupled with new chip efficiency in devices will continue to deliver improved experiences for consumers. The concept of consumers picking up a HD movie on the way home from a storage kiosk is a big possibility and we already have over 1700 Telstra resellers and retail locations where this could happen".
I have met with several of the major content Companies as well as Microsoft and I am convinced that both Games and movies will be delivered to a new generation of devices quite soon". He said. SmartHouse has also been told that Moffett has been privy to both Sony and Microsoft plans for future gaming and entertainment devices. However he refuses to confirm this.
"For both Microsoft and Sony there is great value in being associated with or having a strategic relationship with a telecommunications carrier" said a senior Sony Europe executive involved in the PS3 and the development of new entertainment hub that could also have optional storage options.
The Sony executive said " Both Microsoft and Sony are working on new gaming and entertainment devices and both organisations will be dependent on IP delivery of content. The carrier has both customers and can deliver bandwidth and have extensive billing systems. They are also stitching up content deals to deliver content to consumers. In some cases like Sony has, they have taken strategic relationships in both media and content Companies or they own them outright because everyone knows that content is King. It is the only thing that has kept Microsoft in the gaming market. Halo 3 was critical to them".
He also said "We were lucky in that we took the gamble and built in a Blu ray player into the PS3. This and great games plus an excellent processor has helped us in the market. We also have the PS2 which is still selling extremely well. Microsoft is struggling and need a new gaming and entertainment solution quicker than we do. In many Countries like Australia bandwidth is still slow so until we see fast broadband in every Country Blu ray is still the best solution to watch high quality content. The price of the player is falling and we are now seeing Blu ray players in notebooks, home servers and set top boxes as well as in home storage devices".
Moffett added "Telstra will not be a dumb pipe to serve up bandwidth at the lowest cost. We are a value-added player. We have to get our timing right as the consumer only has so much money. We are excited by our strategy as we have the customers, the billing system and the network and we are aligned to everything we can see on the technology radar. This is why manufacturers want to partner with us".
Mo ffett said "We believe that we have set the right course going forward. We are investing in faster networks to deliver the content including 42mbps to the mobile and fibre to the node in the home. Our timing is critical, we need to deliver just ahead of the customer expectation curve and we need to deliver what the customer wants from voice to data to content delivery."
When asked about PC technology integrated into a TV screen as suggested by Toshiba he said: "Toshiba are leading in the development of Flash storage so to integrate small format PC capability and small format high capability storage into a TV makes sense and will be part of the solution going forward".
Until recently Microsoft had been selling HD DVD add-on boxes for the gaming console and after Toshiba quit the HD DVD market the software giant had to make a strategic decision as to which way to go. SmartHouse was told several weeks ago that several people in the Company wanted to go with Blu ray however other executives were reluctant to support a competitor when in their view the future was not Blu ray but IP delivery of content.
Despite both Sony confirming discussions with Microsoft in an interview with Reuters Aaron Greenberg, group product manager for Xbox 360, denied that Microsoft was going with Blu ray.
"Xbox is not currently in talks with Sony or the Blu-ray Association to integrate Blu-ray into the Xbox experience," he said.
In an effort to re position the Xbox 360 up against the Blu ray PS3 he said "We're the only console offering digital distribution of entertainment content," He added that Microsoft would be sticking to this model, even for downloading high-definition content.