With the Xbox 360 basically out of the door, there must be a team inside Microsoft that is already working on the next machines. That will be mainly down to Microsoft chip designers such as Larry Yang, Jeff Andrews and Nick Baker, who used to work for futuristic console company 3DO. (I believe Larry Yang also worked at Sun on the Sparc.)
There could well be an Xbox 360 II a couple of years down the line. This will be cost-reduced using fewer chips -- all console manufacturers do this. If it gets the volume, Microsoft -- which owns the rights to the CPU and graphics chips -- might also look for lower-cost fabs than its current suppliers, IBM and Chartered Semiconductor. It will also have the option to chuck in an HD-DVD or Blu-ray drive, since this wouldn't change the games. However, since no one has any movies on Blu-ray, and hardly anyone has an HDTV, this isn't exactly urgent.
After that there will be the Xbox 370 or 720 or whatever, which will presumably use a compatible processor and have better graphics, but what else do gamers need? The "law of diminishing returns" is already setting in....
But you can be sure the Xbox 360 isn't the end of the line. If it tanks, "We'll play again," Microsoft co-founder Bill Gates told Reuters in a telephone interview just before of the Xbox 360 launch.
Remember, Microsoft has $40 billion in the bank, plus $1 billion a month in profits, and nothing to spend it on. In December, Microsoft gave $30 billion back to shareholders in a one-off distribution of wealth, and it's disposing of another $30 billion buying back its own stock. Under the circumstances, it can easily afford to invest (or,if you prefer, lose) the odd billion a year in winning the console market. Over the next 10 to 20 years, the potential pay-off could be huge.
If the Xbox was just a games machine, Microsoft might not care. If it's a vehicle for music, movies, online gaming and online shopping -- and a way of extending Microsoft's proprietary media formats into the living room -- then you can bet it does.
Stirred by Sega's announcement of an Xbox 360 version of Virtua Fighter 5, comes rumor that Tekken 6 is also bound for Microsoft's console. The source of the rumor is the same anonymous "IGN insider" who has been apparently credited with breaking the Virtua Fighter 5 news before Sega confirmed it. If his latest spill proves valid, expect Namco Bandai's next Tekken on 360 and PlayStation 3 later this year. There is no indication that this multiplatform initiative would extend to the recently released downloadable version of Tekken 5: Dark Resurrection, which looks to remain a PS3 exclusive.
