Boxes square off

At last year’s Consumer Electronics Show, Microsoft, Intel and other personal computer titans touted the entertainment center of the future, a living room device able to bridge the gap between the Internet and the TV and serve up games, movies, TV, music and more.

At this year’s CES, the Media Center PC will once again get a starring role, no doubt central to Bill Gates’ opening keynote.

But last year’s delay of Microsoft’s Windows Vista operating system — the foundation of Media Center-enabled personal computers — changed the game.

The delay allowed multifunctional Xbox 360 and PlayStation 3 vidgame consoles to move into the Media Center PC’s niche.

“Essentially, it has changed the playing field for CES 2007,” says Richard Doherty of research firm Envisioneering. “The Media Center PCs have to meet or beat the game consoles because most of them cost more.”

With the ability to play games, movies, music and even browse the Internet, the Xbox 360 and PlayStation 3 have become de facto entertainment centers in millions of homes.

To compete, the new PCs will have to average under $1,000 and offer easier navigational capabilities than game-console rivals, as well as new capabilities like operating as a DVR to save TV shows off cable, Doherty says.

The Xbox 360 and PS3 already offer other entertainment center features once seen as unique to the Media Center PC.

Microsoft — which, as the manufacturer of the Xbox 360, has stakes in both camps — began offering movie rental and TV show downloads to the vidgame console in November, around the same time that it began selling an HD-DVD add-on drive for high-def movie viewing.

Many expect Sony to offer movie downloads for the PlayStation 3, which already plays Blu-ray movies and is being positioned as an entertainment center. Users can even connect a keyboard to the console.

Both game consoles are not only cheaper, they have the natural advantage of connecting directly to the TV out of the box, unlike Media Center PCs, which require additional hardware to connect to the TV.

The PCs do have a storage space advantage over their game rivals, with hard drives handling more than twice as much data. Space is important considering a standard-def movie download can consume 1.5 gigabytes.

Working to synergize its two competing technologies, Microsoft is positioning the Xbox 360 and Media Center PC as a combined entertainment system. The 360 has a built-in extender so that it can be connected to play content from PC, for example.

Another threat to the Media Center PC will come from Apple’s to-be-renamed iTV, a set-top device that will stream movies, music and other content from the computer to the tube.

The device is expected to include the simple navigation and sleek design Apple is known for that could make it a centerpiece for Mac and PC homes. Apple CEO Steve Jobs is expected to unveil it at Macworld.

“I don’t know anybody in the business betting against them, except maybe a few arrogant people at Microsoft who think they will prevail,” Doherty says.

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