Xbox 720 might get cable company subsidies

Posted by Mark Raby

It's possible that when you go to the store to pick up an Xbox 720, you'll pay less than you did for your Xbox 360.

That is, if you're just talking about the upfront cost. But if the price is indeed lower, it will be because the console was subsidized by a cable company contract.

The Xbox 360 is already becoming less and less of a video game machine and more of an all-encompassing entertainment device for the living room.

All consoles are trying to do that on some level, but by the end of the year, the Xbox 360 will offer content ranging from live coverage of pretty much every sporting event you can imagine to streaming music, and even live cable TV.

The latter is in fact already available for customers of small, regional cable services. The Wii and PS3 admittedly cannot truly compete with the depth of non-gaming content that the Xbox 360 offers.

That's why Wedbush Securities analyst Michael Pachter thinks Microsoft will strike up deals with TV service providers for the console's successor.

"It's pretty clear to me that Microsoft intends to allow the Xbox 720 to function as a cable TV box, allowing cable television service providers to broadcast over the Internet through the box, with SmartGlass as the remote controller, and with the Xbox 720 using Windows 8 to split the TV signal into multiple feeds, allowing consumers to divert different channel feeds to different displays within the home," Pachter was quoted as saying in X360 Magazine.

"There are 85 million households in the U.S. with either cable or satellite TV, and if Microsoft could sell half of them an Xbox 720 and collect a $5 monthly Xbox Live Gold fee from each of them, we're talking huge profits," he added.