Video services to be included with the next Xbox?

— 3:39 PM on July 1, 2002

The current console war between Sony and Microsoft could get a lot more interesting with the next batch of devices. It's no secret that Microsoft is losing bundles on its first game console, but Xbox's successor could change that. MSNBC reports:

WHAT FREON STANDS FOR is a souped-up successor to the Xbox console — capable of playing games but also offering television capabilities, such as pausing live TV and recording shows onto a computer hard drive, say people familiar with the effort. Though it is unclear whether such a product will ever be built, its core concept appears to have the backing of Microsoft Chairman Bill Gates, who wrote in an internal memorandum in January that he was a “big fan” of a machine that would combine video services with gaming.

Such a device, which could cost around $500, would have another big advantage: It could beat video-game market leader Sony Corp. to the punch.

Having a next generation Xbox out before Sony's new Playstation would be a major coup for Microsoft, especially if it's able to leverage the Xbox's hard drive to achieve TiVo-like functionality. However, Sony isn't likely to take this lying down, especially since they licensed TiVo's technology back in October of last year. Convergence could be coming to a console near you.
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