The Verge has an interesting story suggesting Microsoft is planning to release a cheap Xbox set-top box designed to target the video streamer and casual gamer audience.
I think the idea makes a whole lot of sense, even if I’m not so sure about the specifics. I’m having trouble, though, with the idea that Microsoft’s releasing two significantly different SKUs that, at least by my reading of the article, could possibly have different chip and software architectures.
What makes more sense to me would be a low-end, disk-less set-top Xbox 720 (using basically the same overall chip and software architecture as the high-end system), cost reduced to a price point to compete with Apple TV and Roku.
But even then, given the requirements this low-end box would fill (video streaming, always-on, and casual gaming), what makes even more sense is to instead respin the core 360 technology one more time as the foundation for this low-end SKU.
Think about it: The 360 investment and silicon fabrication is based on older, fully amortized technology but powerful technology nonetheless. Microsoft has shown that it can upgrade software on the 360 (there have been at least three or four major Xbox 360 software upgrades by my count), and while it clearly wouldn’t want to make a new version of the 360 based on a Windows 8 kernel, what’s stopping it from emulating the look and feel of its Metro tile UI (something it has already started to do with the latest version of the 360 UI) to create a low-end box similar in feel to the high-end 720?
Now, the company could clearly have big plans to allow its third-party app developers for Windows 8 to create versions of its software for the next generation of the Xbox. Further, the instant-on and low-power states might also be nonnegotiables for Microsoft, and those are two features I am pretty sure wouldn’t be easy to do with 360 silicon (though, to be clear, I am definitely not a chip engineer).
All that said, if cost reduction and reliability are the key features for Microsoft, using the 360 foundation for yet another SKU makes sense.