Microsoft Moving Into Chip Design With Xbox Next

adamsmith_uk writes "According to ZDNet, Microsoft will more actively participate in chip design for the next version of its Xbox gaming console, tentatively called Xbox Next. By switching from using relatively standard parts to more customized silicon, the company can better optimize its game console, due in 2005. At the same time, the move potentially gives the company a toehold in a completely new market."

Comments

Great quote:

[3Suns]

The company has also been wrestling with Xbox hackers, who've been able to turn the $179 console into a fully functioning computer.

This really highlights the stupidity of MS's anti-hacking efforts. I don't ever remember a company spending so much effort and money on an attempt to remove functionality and desirability from their products.

Re:From commodity to specialized?

[steve_l]

yes. but that plan had one small flaw -it was bollocks.

Sony used custom Si with the same die area as Itanium1, yet could afford to pull it off by selling in the millions.

MS thought that by reusing PC kit they could get in the business easily (true), and ride the continual fall in PC part cost. Unfortunately, PC parts had had their cost already sucked out of them, apart from the effective 5% a month cost reduction of the Si parts. HDD and the DVD dont have much cost reduction at all, so that HDD is $70 of rotating iron whose cost is fixed. The best bit: Sony also rode the fall in Si parts, didnt have an HDD to provide fixed cost and can cut the selling price of the PS/2 whenever their spreadsheet hints that MS may be about to break even on hardware.

I think the biggest mistake of MS was thinking they could sell the hardware at a loss and make money on the games. The trick is to sell the hardware at a profit and make even more money on the games. Sony do that. Adding the HDD was another error. All it does is replicate DLL hell and add the Bill Of Materials of the box.

Re:MS is removing a key advantage of XBox

[wfberg]

And they are effectively removing the aspect of XBox that made it cost effective and appealing to developers: easy porting to the PC through common components and CPU architecture.

I very much doubt the ActiveX APIs on the next XBox will differ much from the ActiveX found on ordinary PC hardware. Most of the rest, the compiler takes care of. How difficult is it to port most apps from linux-ppc to linux-i386, or even from linux-ppc to freebsd-i386?
The XBox already runs on not-quite-standard hardware and not-quite-windows-2k/xp..

DRM applications to trusted computing?

[rbird76]

it might not be so much to prevent pirating or Linux computing on the X-box as a way to get into chip design and knowledge for the hardware required to implement Palladium - if MS is solely dependent upon Intel or AMD for implementation of "trusted computing" it may not be as able to control the implementation effectively, while if they have an internal resource to design and fabricate chips, they can compete more effectively with competing standards from chip manufacturers. Since the evil that is trusted computing is a centerpiece for Microsoft's future, knowledge of the technologies required for it makes sense for MS. (this is assuming that Microsoft doesn't already have internal resources for DRM - even in that case, this may be another way to try DRM out in the field and to see how it works/doesn't work before they release it as part of Palladium).

This will result in fewer X-Box titles

[popo]

Ask any developer in the country: working with Microsoft means jumping through a ridiculous number of hoops, and complying with really awful regulations (like all that X-Box Live crap).

Why do developers do this?

Because development for the X-Box is otherwise relatively easy. The X-Box being a modified PC, means that porting PC titles to the X-Box is cake.

The modified PC architecture also allows Microsoft to raid E3 for hot-titles, and buy out (or sign advance release deals) on hot titles. ("Halo" for example was originally supposed to be a PC release).

But what happens when Microsoft begins to move away from standard components?

The first and most obvious advantage to Microsoft is cost. Owning the chip manufacturing reduces the overall cost of production, not only by cutting out the 3rd party, but through efficiencies of custom architecture. This will translate into a more competitive console price. Most people don't know it, but Microsoft is in a state of panic right now over console prices. GameCube and PS2 can undercut X-Box comfortably in the late-stage console cycle (2 years after a console's release).

But (buyer beware) even though the X-Box NEXT will carry a nice price-tag, the number of titles will be SIGNIFICANTLY LOWER.

Developers *hate* working with the X-Box team at M'soft, and if coding for the X-Box was as difficult as coding for the PS2 developers would choose 1 console and stick with it.

This is almost guaranteed to happen with the release of X-NEXT. Watch as Sony announces a larger than ever release calendar and Microsoft is forced to go on an acquisition streak in order to bulk up on releases.

Also watch as GameCube surprises everyone with their next console which will demolish Sony and Microsoft's benchmarks...

And they need to reduce per-box losses badly

[Morgaine]

every cent you can shave of the production costs of a unit makes a big difference

Your reasoning is spot on for any console manufacturer, but it's especially important for Microsoft because of the dreadful arithmetic of long-duration per-box losses resulting from slow growth of Xbox against the PS2.

The problem there is that Microsoft doesn't write a whole lot of games itself, so they're at the mercy of the usual game dev companies' choice of platform and rate of production. That rate has been slow, and every month that the ramp-up drags on with the PS2 light-years ahead in terms of game numbers represents another chunk of losses stemming from the high cost of the console versus number of games sold.

Exactly why Xbox hasn't exploded onto the scene and become a head-for-head PS2 rival after all this time is a good question which I haven't seen explained anywhere. It's nice hardware from a dev perspective, so why so few games? (Even the Xbox mags are disappearing from shops. Looks bad.)

With the present sluggish rate of new releases and with way under 200 Xbox games in most of the "Coming Soon" lists despite Xmas approaching, I don't see any light at the end of the Xbox tunnel for a long time to come. Under these inauspicious circumstances, I'd have to guess (and we can only guess) that bringing down the pre-console loss must be extraordinarily important to MS.

"Old" semiconductor companies salivating....

[ReadbackMonkey]

I can just see the Intels, Siemens, TIs and NECs of the world lining up for patent suits on this one. If Microsoft plans to wade into this battle without any existing IP they are going to get smacked very hard with the infringement stick... ... all the "old boys" need to do is wait for the system to come out and then the money to start rolling in.

Re:MicroApple?

[Awptimus Prime]

Next version better have full-on network multimedia capabilities. I want to run my ripped DVDs on the TV without more than a network cord to me server. My current multimedia computer is too loud, and quiet ones are either too expensive, or too low end (no surround sound, etc)

Then just get a normal Xbox, throw a mod chip, then get a copy of XBox Media Player..

It works beautifully.

Also, if the stock Xbox makes too much noise, improve it. I ripped out all the shielding and replaced the fan with a quieter one. It runs a few degrees cooler without that insulation, but collects dust more readily. I just leave the bolts out so I can pop the lid off and vacuum it out when it comes time to vacuum out my PC's (monthly)..

Or you could quit trusting a HDD with all your rips and just slap them on a DVD(+/-)R and get a DVD player that'll read them reliably (all the progressive scan Sony's do, to my knowledge). :]