June 30, 2005 2:30 PM PDT

Gates considering Xbox clones?

Microsoft Chairman Bill Gates is dropping hints that he may be ready to license the brains of the Xbox gaming device to other companies. It's a risky move to better compete with Sony's PlayStation, according to one analyst.

In an interview with Nikkei Newspaper in Tokyo, Gates was asked whether Microsoft would consider opening the manufacture of Xbox units to third parties. Gates responded that "there is nothing concrete" but said the company is always talking with partners about how to expand the Xbox culture.

Gates declined to give details, such as which companies Microsoft might be thinking about working with or if a license would be extended to the underlying software of other electronics equipment, such as handheld devices, PCs or home digital media centers.

Microsoft's Xbox currently plays second fiddle to Sony's PlayStation when it comes to sales, with Nintendo's GameCube ranking third. The PlayStation makes up more than 60 percent of the market, with the Xbox accounting for 29 percent of sales and the GameCube rounding out the top-tier players with 11 percent, according to the latest statistics from NPD Group.

All three console makers are preparing their next-generation gaming box. Microsoft's Xbox 360 is expected to hit store shelves later this year, with Sony's PlayStation 3 available soon after and Nintendo's Revolution console expected in 2006.

Despite the suggestion that Microsoft's device could be cloned, Xbox representative Molly O'Donnell reaffirmed the company's stance that the Xbox is exclusively a Microsoft product.

"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," she said.

Licensing the Xbox's underlying software to other manufacturers is, of course, not outside the realm of Microsoft's capabilities. The company found sterling success in licensing its Windows operating system to PC makers.

But breaking the traditional proprietary mold of the game console world is something no one else has tried and something JupiterResearch analyst Michael Gartenberg says would be a bold move on Microsoft's part.

"Clearly, everyone at Microsoft is thinking out of the box to increase sales. I mean, look at the nontraditional way of introducing the Xbox on MTV," Gartenberg said. "It sounds like they are just testing the waters with a hybrid of the (white box) PC model and the (proprietary hardware) video game model."

Gartenberg said Microsoft's strategy may be centered on gaming software. The majority of money made in the video game industry comes from the games themselves, not from the hardware. Recently, both Microsoft and Sony reported that the newer models of their devices will be priced far less than the cost needed to make them.

Microsoft's reasoning, Gartenberg said, may be that the more Xbox-like consoles there were on the market, the easier it would be to sell Xbox-branded games. That would mean Microsoft would have a larger market for the titles it published. And it could also put the squeeze on the PlayStation by inspiring game developers to focus on titles for the Xbox and its generic brethren.

"No one video game software developer just writes for Xbox," Gartenberg said. "But what it would do is tell publishers, 'Hey, look how many more consoles we are on.'

"Still," Gartenberg said, "Microsoft would have to make sure that all the people who license their Xbox are up to their standards, and at the end of the day they would still be competing with Xbox sales."

66 comments

Join the conversation!
Add your comment
3DO
The article claims that Microsoft would be the first com[pany to license out its specs for a videoo game system. But didn't the 3DO license its specs to other manufacturers?
Posted by Lamppost0 (28 comments )
Reply Link Flag
You beat me to it
3DO tried to replace the game console and the VCR with a new standard. Even with EA's powerfull backing it went nowhere. (To my surprise at the time.) Microsoft would be a fool to try again such a silly idea. Consoles lose money, and games make money. That has been how the game has been for the past 10 years and it still works.

Besides, he was asked a leading question and gave a vague answer. Hardly news.
Posted by Andrew J Glina (1673 comments )
Link Flag
3do/atari/sega
Atari had clones of the 2600 (sears/and i think the other was made by coleco) sega also had a clone of their sega cd by JVC called the X-EYE and as mentioned before the 3DO also had clones.

As far as reliabilty goes the xbox has been as reliable or more so than the sony (ps1 or ps2), i sell both and we get more ps2's defective than xbox's but that maybe because sony has sold more ps2's.

And u can't really compare the xbox with problems that the pc has just because it uses a stripped down version of windows. it's alot easier to have problems with pc's and alot of the problems that pc's have is because of the mutitude of different hardware configs there are, not to mention all the crap/buggy software people install and leave on their systems.

STU
Posted by (2 comments )
Link Flag
3DO
The article claims that Microsoft would be the first com[pany to license out its specs for a videoo game system. But didn't the 3DO license its specs to other manufacturers?
Posted by Lamppost0 (28 comments )
Reply Link Flag
You beat me to it
3DO tried to replace the game console and the VCR with a new standard. Even with EA's powerfull backing it went nowhere. (To my surprise at the time.) Microsoft would be a fool to try again such a silly idea. Consoles lose money, and games make money. That has been how the game has been for the past 10 years and it still works.

Besides, he was asked a leading question and gave a vague answer. Hardly news.
Posted by Andrew J Glina (1673 comments )
Link Flag
3do/atari/sega
Atari had clones of the 2600 (sears/and i think the other was made by coleco) sega also had a clone of their sega cd by JVC called the X-EYE and as mentioned before the 3DO also had clones.

As far as reliabilty goes the xbox has been as reliable or more so than the sony (ps1 or ps2), i sell both and we get more ps2's defective than xbox's but that maybe because sony has sold more ps2's.

And u can't really compare the xbox with problems that the pc has just because it uses a stripped down version of windows. it's alot easier to have problems with pc's and alot of the problems that pc's have is because of the mutitude of different hardware configs there are, not to mention all the crap/buggy software people install and leave on their systems.

STU
Posted by (2 comments )
Link Flag
Nice
I see MS is still up to their old tricks trying to make a proprietary system standard.

Because you know everyone loves lock-in.

The only way I could support this is if they made the OS an open standard.

Otherwise we have the same situation as the desktop. 99% of PC games are written for Windows so you have to buy Windows to play PC games.
Posted by Fray9 (547 comments )
Reply Link Flag
Nice
I see MS is still up to their old tricks trying to make a proprietary system standard.

Because you know everyone loves lock-in.

The only way I could support this is if they made the OS an open standard.

Otherwise we have the same situation as the desktop. 99% of PC games are written for Windows so you have to buy Windows to play PC games.
Posted by Fray9 (547 comments )
Reply Link Flag
...And we all know how well this turned out last time
Wait.... So isn't Microsoft the company with the tired & creaky OS,
that is responsible for so much of the gnashing of teeth and
rending of clothes of the average computer user? The last time we
left them in charge of the store, they spent their time creating
something that we had to have, but didn't work very well. Why
would I want to introduce their computing nightmare into my
gaming hardware? Haven't we seen enough blue screens already...
who want's to start seeing them on their TV?
Posted by mahuti (24 comments )
Reply Link Flag
Oh shut up
Have you even ever played an Xbox?
Posted by wazzledoozle (288 comments )
Link Flag
i agree
i agree, windows was the end of the ms software crud-line for me.

i'll vote with my purchase of a ps3
Posted by (12 comments )
Link Flag
You forgot
The loss of hair, the damage to the monitor caused by bashing it with a keyboard and the neural damage done by losing 120 gigs of data. Just a few to mention. now I know that a modchip+linux combo is on the horizon so wait up. All is not lost. Until then PS3 (wich runs linux by default).
Posted by (92 comments )
Link Flag
It turned out well
At the core of every XBOX is a Win2K kernel with customised Win2K/XP drivers. Quite stable as it uses the Apple trick of controling hardware.

Your joke might have made sence prior to the XBOX release but now it just makes you look like a silly Microsoft basher.
Posted by Andrew J Glina (1673 comments )
Link Flag
Screen is not Blue.....it's Green
When the Xbox siezes up, the screen is Green. That way it matches the whole green theme.
Posted by SteveBarry687 (170 comments )
Link Flag
...And we all know how well this turned out last time
Wait.... So isn't Microsoft the company with the tired & creaky OS,
that is responsible for so much of the gnashing of teeth and
rending of clothes of the average computer user? The last time we
left them in charge of the store, they spent their time creating
something that we had to have, but didn't work very well. Why
would I want to introduce their computing nightmare into my
gaming hardware? Haven't we seen enough blue screens already...
who want's to start seeing them on their TV?
Posted by mahuti (24 comments )
Reply Link Flag
Oh shut up
Have you even ever played an Xbox?
Posted by wazzledoozle (288 comments )
Link Flag
i agree
i agree, windows was the end of the ms software crud-line for me.

i'll vote with my purchase of a ps3
Posted by (12 comments )
Link Flag
You forgot
The loss of hair, the damage to the monitor caused by bashing it with a keyboard and the neural damage done by losing 120 gigs of data. Just a few to mention. now I know that a modchip+linux combo is on the horizon so wait up. All is not lost. Until then PS3 (wich runs linux by default).
Posted by (92 comments )
Link Flag
It turned out well
At the core of every XBOX is a Win2K kernel with customised Win2K/XP drivers. Quite stable as it uses the Apple trick of controling hardware.

Your joke might have made sence prior to the XBOX release but now it just makes you look like a silly Microsoft basher.
Posted by Andrew J Glina (1673 comments )
Link Flag
Screen is not Blue.....it's Green
When the Xbox siezes up, the screen is Green. That way it matches the whole green theme.
Posted by SteveBarry687 (170 comments )
Link Flag
They Lose Money On The Consoles
At least that's what I've heard. They sell the console at a loss, so
they can make money selling games.

So who would want to sell Xbox clones at a loss?
Posted by open-mind (1027 comments )
Reply Link Flag
Yes this is true
Every console maker loses money on their consoles. The question is:

"How low is the PS3 going to be?"

It is going to be higher than the XBOX 360 because it (frankly) has a whole lot more additional features and Blu-ray dvd's instead of the HD-DVD that MS is going to use (lower capacity than Blu-ray). I believe that the PS3 will be around $400-475 at its base price, not to mention what "bundles" stores are going to make you buy.
Posted by jerictrevors (24 comments )
Link Flag
You hit it right on the head
Who would want to sell Xbox 360 clones at a loss. There is no money in gaming console hardware. With the exception of peripherals. Money is made in the software. Any company that took this up from Microsoft would be dumb.
Posted by SteveBarry687 (170 comments )
Link Flag
Correct
With the original Xbox, Microsoft's initial plan
was to get a deal with some computer
manufacturer, and have them make the
consoles while Microsoft focussed on the
game software. They shopped this idea to
Dell, but Michael Dell basically told Microsoft
that they were crazy. There's no profit in
making the consoles themselves. The big
profits are in the games sales.
Posted by (26 comments )
Link Flag
Well...
For MS, selling license means they can make $$ out of it. And...why does MS care if those XBOX clones lose $$ anyway? :)
Posted by 201293546946733175101343322673 (722 comments )
Link Flag
They Lose Money On The Consoles
At least that's what I've heard. They sell the console at a loss, so
they can make money selling games.

So who would want to sell Xbox clones at a loss?
Posted by open-mind (1027 comments )
Reply Link Flag
Yes this is true
Every console maker loses money on their consoles. The question is:

"How low is the PS3 going to be?"

It is going to be higher than the XBOX 360 because it (frankly) has a whole lot more additional features and Blu-ray dvd's instead of the HD-DVD that MS is going to use (lower capacity than Blu-ray). I believe that the PS3 will be around $400-475 at its base price, not to mention what "bundles" stores are going to make you buy.
Posted by jerictrevors (24 comments )
Link Flag
You hit it right on the head
Who would want to sell Xbox 360 clones at a loss. There is no money in gaming console hardware. With the exception of peripherals. Money is made in the software. Any company that took this up from Microsoft would be dumb.
Posted by SteveBarry687 (170 comments )
Link Flag
Correct
With the original Xbox, Microsoft's initial plan
was to get a deal with some computer
manufacturer, and have them make the
consoles while Microsoft focussed on the
game software. They shopped this idea to
Dell, but Michael Dell basically told Microsoft
that they were crazy. There's no profit in
making the consoles themselves. The big
profits are in the games sales.
Posted by (26 comments )
Link Flag
Well...
For MS, selling license means they can make $$ out of it. And...why does MS care if those XBOX clones lose $$ anyway? :)
Posted by 201293546946733175101343322673 (722 comments )
Link Flag
History shows.
3D0, 2600.... They have been cloned and standardized and are they around? The 2600 was a smash while EA's own system sunk!
Posted by nzamparello (60 comments )
Reply Link Flag
History shows.
3D0, 2600.... They have been cloned and standardized and are they around? The 2600 was a smash while EA's own system sunk!
Posted by nzamparello (60 comments )
Reply Link Flag
 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.