It’s hard to tell for certain, several months before the launch of Xbox 360, what Microsoft has planned for their “2.0” console.  However, recent statements made by none other than BillG himself point to a console that will be constantly evolving in terms of specs and capabilities ... something that has spelled danger for consoles past.

At a recent event in Tokyo, held jointly with HD-DVD standard bearer Toshiba, Microsoft reiterated their commitment to the standard.  Microsoft and Toshiba have a cross-licensing deal which extends back to April of this year, which has resulted in Toshiba being one of the leaders in Media PC and Tablet PC development.  The stakes in the next-generation DVD battle are huge, and having Microsoft as an ally would certainly add a certain amount of credibility to the format.

At this same event, Bill Gates stated that while the initial shipments of the Xbox 360 would contain a standard DVD drive, they are considering putting HD-DVD drives in future versions of the console, as well as other alternatives.  “We are looking at whether future versions of Xbox 360 will incorporate an additional capability of an HD DVD player or something else.”

Typically, consumers don’t like to hear that it’s possible that their hardware will be obsolete the moment it is released, and is part of the reason why Sony is throwing as much hardware at the PlayStation 3 as possible and eating the cost, including Blu-Ray support, the other format competing with HD-DVD as the standard for high-definition movie content.  By including the drive at launch, not only does Sony “future-proof” the machine, but they can possibly propel Blu-Ray to the forefront in the standards race, giving them an competitive advantage.  The success of the PlayStation 2 is widely credited towards including DVD movie playback.  In fact, in the first year of the PlayStation 2, more movie content was attached to PS2 sales than were game software.  It also helped that the PS2 was a fairly inexpensive DVD player upon its release.

What is baffling is that considering what is at stake, and Microsoft’s close ties to Toshiba, why Toshiba is not supplying the drives at no- or low-cost to Microsoft, in an effort to simply get the hardware into consumers homes and get a head start on Sony.  Given Microsoft’s willingness to add the hardware at a later date, potentially skewing the installed base and giving no competitive advantage to Toshiba, it is truly strange that Toshiba isn’t willing to eat the cost now to guarantee themselves an early leadership position.

It’s important to note that this won’t necessarily impact people planning to use the Xbox 360 solely for game play, but for those buying into Microsoft’s philosophy of turning the game console into a media component in the living room, it’s a potentially hazardous decision.  Announcing the decision this close to the Xbox 360 launch may even cause some consumers to wait until the HD-DVD capability is included, by which point Sony may already have the Blu-Ray capable PlayStation 3 in the marketplace.

This is not the first time that confusion has been expressed over the specs of the Xbox 360.  Initial photographs released indicated a 40GB hard drive attached to the machine, but the final specs released at E3 showed the storage device as 20GB, but that the drive is upgradeable to higher capacities later.

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