Windows XBox Seen as Part of Unified Ecosystem

Remarks made by Microsoft's Andy Lees at the company's Worldwide Partner Conference are igniting rumors that the next-generation Xbox device could run Windows as its operating system. The expected time frame for this integration could be about four years, timing that would coincide with the expected refresh of the XBox and Windows 8.

Analysts are chewing over the implications of Microsoft's announced plans to create a unified Relevant Products/Services ecosystem for phones, computers and other devices. One thing that could mean is that the next generation Xbox device Relevant Products/Services could run on a version of Windows Relevant Products/Services.

Andy Lees, who heads up Microsoft's Windows Phone division, said at the company's Worldwide Partner Conference in Los Angeles that the time is approaching when there won't be an ecosystem for phones and tablets. "They'll all come together," Lees said, hinting at "a single ecosystem and not ecosystems themselves."

Ten-Year Lifespan

The expected time frame for this integration could be about four years, according to sources who spoke to The Escapist blog, timing that would coincide with the expected refresh of the XBox and Windows 8. Thisismynext's Nilay Patel also noted that Lees said the Redmond, Wash.-based software giant wants to provide "coherence and consistency" across devices, "particularly with Xbox." Sources told Thisismynext that Microsoft may even give up the name Windows, the company's best established trademark, for something entirely new during that 2015-2016 time frame.

Michael Inouye, digital home analyst for ABI Research, said reports of the Windows Xbox are "certainly credible," but he added, "the implementation of a cross-platform/device OS might not happen as some are envisioning. The branding might span devices as may some of the critical components, but I would expect the next Xbox to remain a 'separate' platform."

It is unlikely, he said, that the next Xbox will be able to install non-gaming or non-browsing software such as the Office productivity Relevant Products/Services suite.

"The Xbox will remain a game/media machine Relevant Products/Services first and foremost, which is why the Xbox and Xbox 360 operating systems were designed separately from Windows," said Inouye. "This isn't to say there aren't any shared components, but they are separate operating systems. I would expect some aspects like a Microsoft application storefront/service Relevant Products/Services to be cross platform/device as well as other features/services like Internet Explorer, social networking, video Relevant Products/Services marketplaces, etc. We are already seeing some of this with Xbox Live."

Controlling Your Experience

Another concern, he said, was that Microsoft must limit what users can install and do on its gaming platform to ensure the Xbox is optimized for media and games.

"In addition there are security Relevant Products/Services issues that also favor a closed/protected system as well -- e.g., content protection and protecting users from malware."

But Microsoft and other major players in the gaming industry may have to do something to ramp up interest in platform-based games: A new survey by NPD found that sales of games suffered a major drop in June, bringing in revenue of $995 million, compared to $1.1 billion during the same month in 2010, a 10 percent drop.

Software sales fell 12 percent, and game accessories fell 11 percent, a likely result of greater use of free or cheap downloadable game apps for tablets and smartphones.

Microsoft can worry less: The Xbox 360 dominated the market in May with 34 percent of all game revenues, the Wall Street Journal reported.