Microsoft is clearly working on integrating IPTV into the Xbox.
There was an interesting interview with Bill Gates by Engadget where they asked a couple questions that really hit home.
Engadget: There’s been some speculation about the Xbox 360 as a platform for IPTV. I know IPTV is something I asked you about back in April, primarily as a platform for set-top boxes and things like that, what do you see as the 360’s potential as a means for delivering video to the home?
Gates: Well, the Xbox 360 obviously has the ability to do high definition and that’s what makes it such a fantastic extender for the Media Center. That’s another thing I set up, and just the speed of it, the fidelity of it is really better than the previous generation of extenders that we had.
It’s rich enough that, yeah, it can do set-top box like things. If you just want a set-top box, [the Xbox 360] is somewhat overkill, the graphics power that we’ve got there is for the world’s best games. Now that the cost of the chips in Xbox will be coming down over the next three, four, five years, it could get fairly cheap, but I still think you’ll see dedicated set-top boxes. You can always think of something like the Xbox 360 as a super set-top box that can do everything the set-top box does, but then have the graphics to do the games as well.
With the Xbox 360 we have the first device with a big hard drive, big processor, Ethernet connection, and HDTV output. At $300 it doesn’t cost much more than the ‘dumb’ Scientific Atlanta or Motorola boxes deployed by cable/telco carriers today. And whether you believe it or not, MSFT is shaping up to be the leading vendor of IPTV middleware. It isn’t a big leap to say an Xbox-Lite (no videogames, MOCA connectivity) would make the perfect set top box.
I think Gates is playing country bumpkin here, sounding like “Gee, the Xbox is kinda overkill but yeah I think it could work”. Realpolitik requires Gates to keep his mouth shut long enough to continue to lull his set-top box hardware partners (Motorola and Scientific Atlanta) into partner bliss. Then you’ll see Gates show up at Comcast headquarters with a $100 Xbox 360. Instead of HELLO MOTO it will be BYE-BYE MOTO.
As each day goes by, the Scientific Atlanta (SFA) shareholders who complain $6.9BB wasn’t enough for their commodity box company should shut up and cash their checks. What would you rather provide to subscribers as a cable operator- an Xbox 360 or a glorified radio tuner for video?
Just to drive things home, here is an excerpt of a speech made by Robbie Bach, Sr. VP and “Chief Xbox Officer“. He could just as easily be describing Xbox hardware, not IPTV software. (full transcript here)
I want to talk about a second one, which is Microsoft TV, and Microsoft TV again is a place where the company has been investing for quite a while. It’s a place where we see a real opportunity in the future and we’re really going to the next cutting edge. Many of you know we have a product called Foundation Edition, which is primarily designed to work with the cable industry and their existing hardware and new hardware they’re coming out with. Our current version of this is called Foundation Edition 1.7. Comcast is our biggest customer in North America; we have a 5 million subscriber deal with them. We also have a lot of business actually in Latin America, where we’re the leading digital set-top box software provider. This is a product that we’ll continue to invest in and continue to work with the cable industry as they make the migration over to the digital world.
But in some ways where the new cutting-edge work is happening, is in what’s called IPTV, Internet Protocol Television. And IPTV Edition is our product that’s entering in that space, and I want to talk a little bit about what that means and then we’ll take a moment to show it to you. Basically what IPTV Edition enables you to do, regardless of whether you’re a cable provider or a telco or any net operator, you can take live media, on-demand media, across an IP network and put it into the home on a high-definition television, and you can do multiple streams of that content without having to have multiple tuners in the set-top box. You really can produce an amazing TV experience. You get better TV just in basics, and then you get a better-connected TV and a better platform.
And I want to point out from a Microsoft perspective what’s very cool about this is not only is this a new product and a new business for us to sell, but it also is fundamentally based on our other technologies. This product sells SQL Server, it sells Commerce Server, it sells the rest of our backbone into these operators, and really helps broaden our business.
Hey Robbie! You forgot to mention Xbox!