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Microsoft Considers Licensing Xbox Software

Microsoft Considers Licensing Xbox Software

June 30, 2005 | By David Jenkins

June 30, 2005 | By David Jenkins
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Microsoft chairman Bill Gates has hinted that the company is considering licensing the software underlying the Xbox games console to outside companies, in a bid to expand its market share.

Gates commented, during a visit to Japan this week, that Microsoft is considering offering "the basic software" for the Xbox for external licensing. Microsoft Japan spokesman Kazushi Okabe confirmed the remarks in business publication Nihon Keizai Shimbun, but refused to clarify whether the resulting products would bear the Xbox brand name, or whether the software would be related to the original Xbox, the Xbox 360 or both.

The arrangement would be similar, said Okabe, to Microsoft’s more traditional business models, where it provides the software standard for hardware companies to employ. No indications were made of which companies might be involved or the exact nature of the software, or indeed whether manufacturers would be producing products other than game consoles.

Sony has long been keen for the PlayStation 3’s Cell chip to be used in other devices, with Toshiba already planning to use it in a range of new televisions, but the Cell chip is a small portion of the PlayStation 3 hardware itself. In fact, licensing hardware and software platform specifications has not been traditionally successful in the video game world though, with the last high-profile attempt being the failed 3DO format – console versions of which were produced by companies including Panasonic, Goldstar and Sanyo.

However, Microsoft has traditionally always dominated markets via software, not hardware, even though recent attempts to employ this policy in the portable music player market have not been as successful as the company is used to. In this case, Microsoft also faced an entrenched competitor with an already popular brand (Apple’s iPod), which is certainly somewhat analogous to the situation currently facing the company with the Sony PlayStation.


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