November 26, 2012, 3:20 PM — With the next generation of its Xbox gaming console, Microsoft may be thinking small and trying to muscle into the set-top box TV business with a new Xbox Mini, expected 2013.
According to The Verge, which cites "multiple sources familiar with Redmond's plan" Microsoft is working on a set-top version of its popular gaming console that will compete with leading players in the market Apple and Roku.
Microsoft's strategy in creating an Xbox "Mini" is to broaden its beachhead in living rooms by offering an economically-priced device that would allow its owners to access some core entertainment services and "casual" gaming titles.
No price points were reported in the Verge story, which cited unnamed sources. Apple's set-top product sells for $99 and Roku offers a unit for as low as $50.
Xbox Mini would be an "always on" device, Verge reporter Tom Warren wrote, and its architecture would be a scaled down version of the next generation Xbox. It appears that Microsoft is trying to do with Xbox what it did with Windows 8: span all platforms -- desktops, laptops, phones and tablets.
According to Warren, Microsoft could combine the core system for the next Xbox with a phone stack so the Xbox Live services could be played on a handset, most likely a handset running Windows Phone.
When The Verge asked Microsoft for a comment on its future plans for the Xbox, the company stated, "We are always thinking about what is next for our platform and how to continue to defy the lifecycle convention.
The possibility of an Xbox Mini does raise some questions. For example, what does the company mean by "casual" games? While it's presumed that the set-top Xbox won't be for players interested in playing Halo, "casual" can be a very loose classification.
A set-top box will likely cut into the turf of Xbox Live, too, which now offers entertainment services, such as Hulu Plus and Netflix, and online gaming. Will Microsoft have to reprice Live -- now at $60 year -- to maintain its value proposition for its subscribers?
The set-top Xbox would likely appear during the holiday season in 2013, along with the next generation of its big brother.