Sony calls its next generation machine a “computer entertainment system”. Blu-Ray Disc, the Cell processor and an nVIDIA graphics chip power the next PlayStation, which is rumored to launch in two flavors similar to the current PS2 and PSX.

Will Microsoft changes the Xbox tag from “video game system” to something that expresses better its capabilities? That might end up being the real thing if you consider the latest signals coming from all over the world.

Last month, we reported about the rumor of Microsoft’s plans to release three versions of the Xbox 2; one being a simple console with no hard drive; a second model that incorporates a HDD and additional functionality; and finally a third model that will act like a hybrid of an Xbox 2 and a PC. While we still find those rumors hard to believe, we are still waiting for an official announcement.

In an exclusive interview with Business Week, Robbie Bach, Chief Xbox Officer and now member of the Microsoft’s Consumer Leadership Team, shares some thoughts on the future of the Xbox and reveals some of the strategies the software giant will implement in the next generation. Here are some highlights:

Well, we haven't talked about the next version of Xbox. But people know we're working on it, and people have to assume it's going to be the world's best game console. That's the place where it needs to start.

But we do think there are going to be opportunities to enable what we've called "integrated innovation" scenarios. You can assume that everything we do -- the gaming side and things that integrate with other forms of entertainment -- is going to get better and better and better.

Certainly, there's the idea that you're going to want to share what I'll call for lack of a better phrase your digital memories, whether that's digital photos or digital video.

You can think about sharing broadcast video. That's going to be a richer scenario.

Music is clearly a scenario that everyone is focused on. Certainly, Apple has done some good work there. But we're still very early in the curve of what's possible and what people want. The consumers we talk to in MSN or Xbox or the Windows team say music is a very essential part of what they do whether it's on an Xbox or a PC or some other device.

Communications turns out to be a very important scenario as well, whether that's chat, messaging, blogging, telephony. All those things are important scenarios, and there will be things that Microsoft will be doing to deliver those. Now in some of those, we may be an infrastructure player, rather than a direct consumer player. There are tons of ways where software can play a role.

All of these scenarios I've just talked about require some hardware and some very cool software to enable them.

To read the complete interview, click:
http://www.businessweek.com/technology/content/dec2004/tc2004127_5618_tc185.htm