NEW YORK (CNN/Money) - Two months ago, Microsoft spoke glowingly of bridging the gap between the PC and Xbox. Now the company is considering erasing that gap completely.
While Microsoft has publicly avoided discussing its next generation machine, it has been quietly conducting studies on the consumer appeal of a hybrid device that would play both PC and Xbox games.
"We would be remiss if we didn't look at consumer scenarios that take advantage of our strengths," said Peter Moore, corporate vice president of worldwide marketing and publishing for Microsoft's home and entertainment division. "[But] this is one amongst many, many other consumer scenarios that we're looking at."
The B/R/S Group, a California-based market research company that lists Microsoft and the Xbox division specifically as clients, has been gathering consumer feedback on a device it refers to as Xbox Next PC "a videogame console system with a hard drive and a built-in fully functional PC." Mention of the device came on one of several slides shown to focus groups.
One slide describes the unit, which would require a PC monitor or high definition television, as being backward compatible with current and next-generation Xbox titles. It would also play PC games and include a fully functional version of Windows, CD burner, DVD player (with remote control), built-in access to Xbox Live and a hard drive. Control-wise, the system would come with both a keyboard and mouse and a standard Xbox controller. The price point this particular study tested was $599.
B/R/S officials declined to comment for this column, citing a strict confidentiality agreement with Microsoft.
The point of the study that included the Xbox Next PC was to determine what consumers want to see in next generation machines and what they're willing to pay for those features. Gathering pricing sensitivity data for products is one of the most challenging market research projects for hardware developers.
It's important to note that any product looked at in these sorts of studies is conceptual and may undergo dramatic feature changes before hitting the market if, in fact, it manages to emerge from the doors of the R&D labs.
"If you put two and two together, there's no doubt there's a great opportunity to put the two platforms together," said Moore. "Obviously with a company like Microsoft this is something we have to look into and ask about. Is it actionable today? Probably not, but it's something we need to look at."
There is, of course, a greater question of whether consumers would have any interest in a console/PC hybrid. Game machines, historically, have evolved rather slowly. Large leaps haven't been rewarded. Sony learned this lesson with the introduction of the PSX, a combination PlayStation 2/Digital Video Recorder, which sold poorly in Japan and has yet to receive a U.S. launch date.
Microsoft first showed interest in bringing the PC and Xbox closer together in March at the Game Developer's Conference, when it unveiled XNA, a software development platform meant to allow developers to skip writing boilerplate code that often bogs down the time it takes to create a game.
The same platform would open up cross-platform integration opportunities, letting PC and Xbox owners play in the same world, though each would have different experience. (PC gamers, for example, could act as virtual generals in a strategy game, coordinating troop movements, while Xbox players playing an action version of the same title would fight the battles.)
"There will come a day in the not too distant future that [PC] games will be interchangeable between Windows and the Xbox," Moore told me at the recently completed E3 trade show.
Should Microsoft (MSFT: Research, Estimates) move forward with a hybrid machine, it will likely come after a standalone Xbox 2 unit is released. As for when we'll see next generation Xboxes on store shelves - officially, Microsoft isn't commenting, but it has been giving publishers guidance to plan for a 2005 launch.
That's a short time frame, which might raise some questions about why the subject of Xbox 2 is being so studiously avoided. The answer's simple. Xbox has momentum right now and its holiday line-up of games (led by titles such as "Halo 2") is strong. Talking about Xbox 2 would distract consumers, which could significantly cut into sales across the board.
"Xbox has got so much going for it as we go into the holidays that anything that disturbs the ecosystem for us is bad for business," said Moore.
Morris is Director of Content Development for CNN/Money. Click here to send him an email.