The company says this is another element in its vision of "digital entertainment everywhere."
With its custom triple-core
IBM PowerPC processor, 512 MB of RAM, and custom graphics processor from ATI, the new Xbox clearly has the resources to serve as far more than just a gaming console.
Media Center Extender functionality makes it a key element in a home entertainment infrastructure that centers around a Windows XP
Media Center Edition PC. Microsoft already offers an
upgrade kit that turns the earlier version of the Xbox into a Media Center Extender.

The power of the Xbox to transform the home infotainment scene has not been lost on
Time magazine, which is featuring the Xbox 360 in a cover story this week. The Xbox "entered your house under the humble pretense of being a game machine, a toy for the kids, but it just ate your CD player and your DVD player, and it's looking hungrily at your telephone," says
Time's Lev Grossman. "It has created a miniature electronic ecosystem inside your home, with itself at the center." (Click cover image for full
Time story.)
Microsoft claims that as of April, over 2 million Media Center Edition PCs had been sold worldwide. Although the company touts Media Center Extender technology as the best way to extend the reach of Media Center PCs to entertainment devices throughout the home, others remain skeptical. For example, in a
guest column at
CNET last fall, Forrester Research vice president Ted Schadler suggested that Media Center Extenders are an expensive way to get digital music to a home stereo, and that for recording video, DVRs (digital video recorders) are "cheaper and easier to hook up."
Nevertheless, "by integrating diverse technology expertise and innovations across the company, Microsoft is able to deliver rich digital entertainment experiences that consumers have been asking for," said Robbie Bach, chief Xbox officer at Microsoft.
Apparently, Microsoft has a broader vision for the Xbox 360 than just games. But for now, let the games begin!
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