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Tuesday, November 07, 2006

Annual Microsoft Day: Xbox Uber Alles


The Xbox is going to run TV and movies. Users will be able to rent feature videos and download them over the web.

The deal is a real shot at Apple, Amazon, Movielink, and other services that are offering downloads because the Xbox platform has such a large footprint with gamers. Xbox Live, which will support the new service, has 4 million users.

Microsoft has already cut deals with Paramount and Warner for movies and with Viacom and CBS for TV.

Now, Sony's Playstation 3 will also allow video downloads, so Microsoft will have some competition in offering feature video content on a game platform.

Where will it all go? With video appearing on cellphones and over IPTV fiber-to-the-home platforms, investors have to wonder where the smart money is going to predict who will win. The Xbox, the iPod, IPTV, cell phone video.

What is almost certain is the video is going to be on too many platforms for everyone to make money. The exception is the content owners who will make something for every piece of their material that is used.

Betting against Microsoft's Xbox intiative may be dangerous. It looks like the company is back in the innovation business, and they have the pocketbook to back the play.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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