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Analyst questions validity of 'hybrid' Xbox 360

Third-party Xbox 360 hardware could help penetrate difficult markets, but would prove too expensive to manufacture, says Pachter

Following recent rumours that have suggested Microsoft may allow electronics firms to develop hardware featuring Xbox 360 technology – effectively paving the way for third-parties to build Blu-ray players, PCs and set-top boxes which play 360 games – a leading analyst has said that such a move would prove too expensive.

Michael Pachter, of Wedbush Morgan Securities, believes that any such radical repositioning of Microsoft's hardware business model might help the Xbox 360 penetrate Japan, but in other markets it wouldn't be a viable business for third-parties.

"It doesn't sound likely to me, as the 360 is hardly as ubiquitous as, say, the DVD drive," said Pachter, speaking exclusively to GamesIndustry.biz.

"I think it may be possible as a way to penetrate more difficult markets like Japan, but don't really see how it would work in practice in other markets.

"To add 360 functionality to another consumer electronics device, such as a Blu-ray player, the manufacturer would incur relatively significant additional cost. That would place the hybrid device at a disadvantage," he added.

The pre-E3 rumour emerged last week, suggesting that third-party manufacturers could help Microsoft reach the elusive Japanese market, as well as a more mainstream consumer who wouldn't be buying just a console, but a multifunctional home entertainment device.

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Matt Martin

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Matt Martin joined GamesIndustry in 2006 and was made editor of the site in 2008. With over ten years experience in journalism, he has written for multiple trade, consumer, contract and business-to-business publications in the games, retail and technology sectors.

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