Want a movie with your Xbox? - Tech News

	CNET tech sites: Price Comparisons \| Product Reviews \| Tech News \| Downloads \| Site map

Want a movie with your Xbox?

By Reuters
June 24, 2002, 10:20 PM PT

Microsoft has been quietly working since last fall on a device combining its money-losing Xbox video game console with its digital video recorder, according to published reports on Tuesday.

The article by magazine Red Herring cited speculation that such a combined machine could be launched next year for a price of around $500, which factors in the added costs of a larger hard drive and TV tuning equipment.

The project sounds similar to HomeStation, a device Microsoft reportedly has been working on since last year. As previously reported by CNET News.com, HomeStation devices would combine the ability to play Xbox games with digital TV functions and Internet access. Prospects for such a device seemed to bolstered earlier this year when Microsoft reorganized its UltimateTV division, transferring some of the employees to the Xbox team.

Microsoft may also take another tack to combine the Xbox and digital TV. As previously reported by CNET News.com, the company recently surveyed Xbox owners about a proposed device that would network the Xbox with PCs that would include digital TV functions based on the Freestyle home entertainment addition to Windows XP.

The Red Herring article also cited a source as saying internal Microsoft estimates showed that the software giant would lose $750 million on the Xbox game console this fiscal year and $1.1 billion in the next fiscal year, ending June 2003.

That compares with an estimate given to Microsoft Chairman Bill Gates in 1999 that the Xbox project could lose $900 million over eight years, the magazine said.

Representatives from Microsoft were not immediately available for comment.

Microsoft has been expected to post huge losses on the Xbox since the product was announced. The game machine has been blamed for cutting into Microsoft's profits in recent quarters.

The Xbox, PS2 and GameCube are competing for share in a global game market that is expected to top $30 billion in hardware and software sales this year.

News.com's David Becker contributed to this report.