Dylan Greene dot com

An unconfirmed report from excellent gadget site Engadget:

Regarding the Xbox 2 hard drive, I was snowboarding in Whistler, B.C. from February 19 - 26, 2004. We were in a bar called the Amsterdam Cafe in the village one night and J. Allard, the head of Microsoft’s Xbox division was in the bar with some friends. I recognized him from a recent Business 2.0 article and we started talking. (He bought my friends and I a round of drinks he called “Hey Zeuses” - they were Red Bull and tequila and they were nasty.) Anyway, we were talking about the Xbox 2 and he said their current plan was not to include a hard drive in the Xbox 2 itself, but to offer a portable hard drive as an accessory you could buy separately. Here’s the kicker: He said what they were trying to do was to incorporate MP3 (and WMA, obviously) functionality into the portable hard drive and turn the thing into an iPod killer. Basically, the idea was to come up with an MP3 player that was as good or better than the iPod that would also serve as the hard drive for the Xbox 2. And he said they planned to sell them as a loss leader at $100 each.

I personally doubt it's going to the an iPod killer.

First, XBOX and iPod owners are different audiences for the most part, so I doubt any XBOX 2 accessories, no matter how cool, will do any damage to the iPod sales numbers.

Second, there are over 500 MP3 devices available that play Microsoft's WMA alternative to MP3. I'm guessing the companies that make those devices pay a licensing fee to Microsoft. Would Microsoft want to compete with it's own license holders?

And third, why not just put a USB port on the XBOX 2 and let gamers use their own MP3 player of choice as an external storage medium instead of locking users into just that one solution? Oops, I can hear you saying: "Because that's the sort of thing Microsoft would do." Hehe, guess we'll just wait and see...