Microsoft Corp is revamping the Xbox to fend off competitors ranging from Apple Inc to Facebook Inc. Those companies were nowhere in gaming when the software maker debuted its last version five years ago.
Now these newcomers — along with the likes of Google Inc and Amazom.com Inc — are posing a threat by introducing their own software and devices that let consumers access an array of games and entertainment on smartphones, computers and home electronics.
Microsoft is expected to unveil the new Xbox today at an event in Redmond, Washington, which is capable of delivering more programming, entertainment and services, moving it further beyond the gaming realm.
“This has to last them in the living room for four to 10 years,” said Brian Blau, an analyst at Gartner Inc in San Francisco. “They have to think about what’s coming in five years and compete against the two generations of tablets which will come out during that time.”
The new gadget will use the Kinect sensor to recognize faces and recommend content based on a user’s interests, people with knowledge of the matter said.
Due in stores by the end of the year, the latest Xbox is to feature Advanced Micro Devices Inc chips designed to make it easier for developers to create games, the people said last month.
The new Xbox will probably have Microsoft’s Skype, which delivers low-cost voice and video calling, and an improved Kinect motion and voice-control system, said Michael Pachter, an analyst at Wedbush Securities Inc in Los Angeles.
“Few people will buy an Xbox just to watch TV, but Microsoft is making the bet that people will want to play games some of the time and watch TV all the time,” he said.
Microsoft is also in talks with cable operators, including Time Warner Cable Inc, to have the Xbox replace the set-top box in living rooms, delivering some content over the Web instead of through traditional cable pipes, said Richard Doherty, president of technology-consulting firm Envisioneering Group Inc.
The discussions are ongoing, he said.