Microsoft May License Xbox Technology

Third Party Makers May Offer “Xbox-Based” Products

by Anton Shilov
07/01/2005 | 07:00 AM

Microsoft Corp. may license software underlying its Xbox console to third-party companies, the company’s co-founder and chairman Bill Gates hinted reporters on Thursday in Japan. No actual details were let out, though.

 

In a bid to expand the market share for the Xbox machine, Microsoft is considering to offer certain consumer electronics or computer companies to license “basic software”, according to Microsoft’s representatives in Japan. So far Microsoft’s chairman Bill Gates has not disclosed peculiarities on the nature of software or which companies would be involved. It is also unclear whether the arrangement will involve manufacturers making products other than game machines, such as digital consumer electronics gadgets that combine PC functions with home appliances, Associated Press reports.

“There’s certainly a potential for other hardware companies to manufacture Xbox some day in the future, but that is not something we're focused on right now,” Microsoft Xbox representative Molly O’Donnell reportedly told CNET News.com.

The arrangements being considered are alike those that Microsoft has employed in the past by working with other companies, including Japanese electronics makers, to install its Windows operating system in personal computers, according to a Microsoft’s spokesman in Japan.

Provided that Microsoft licenses ability to make Xbox games compatible devices, the company would have to take care of the hardware Xbox games are intended to run on. Particularly, the software giant would either need to provide special emulation software for central processing unit by Intel Corp. and graphics processing unit by NVIDIA Corp., or to advice its partners to acquire the hardware from appropriate vendors, which may boost revenues of the mentioned two technology powerhouses.

Given that console companies do not make much, if any, money selling hardware, but earn the majority of profits on software, it is unclear what exactly may be interesting for consumer electronics firm in terms of gaining access to Microsoft’s Xbox technologies. For Microsoft it would be positive that there are more Xbox-like machines on the market, because as install base grows, more games are sold and more profits the Redmond, Washington-based receives from every game.

For backwards compatibility of the forthcoming Xbox 360 with its own Xbox console, Microsoft needed to license certain technologies from NVIDIA Corp., it was reported in mid-June.

Microsoft has ceased, or is about to cease, production of the original Xbox console recently. It is unclear whether Xbox-compatible devices will carry any Xbox brand-name.

Microsoft is expected to launch its next-generation Xbox 360 console in November, 2005.