Analyst Backs "Son Of Xbox" Rumor

A Wall Street analyst said Tuesday that reports of the Microsoft "HomeStation" next-generation set-top box are most likely true.

Hans Mosesmann, an analyst with Prudential Securities in San Francisco, said that "industry checks" had revealed that work is indeed being done on the HomeStation, which has been described as a successor or complement to the Xbox game console that Microsoft has already produced.

"Our proprietary industry checks suggest there is truth to the so-called Microsoft HomeStation convergence box which would incorporate Xbox title compatibility as well as PC, PVR (personal video recorder), Bluetooth, Dolby Digital, and broadband capabilities," Mosesmann wrote in a research note Tuesday.

Set-top boxes with integrated game-player capabilities have been tried before, most recently by Pace Micro Technology, which tried to integrate Sega Dreamcast hardware into its line of set-top boxes. However, Pace executives have said that not a single cable operator has committed to buying and deploying the box.

Mosesmann covers the stock of Nvidia Corp., which is shipping a derivative of its GeForce graphics accelerator inside the Xbox. Mosesmann said it is likely that the HomeStation will use a version of the GeForce as well, adding that more information on the device will likely continue to leak out over time.

According to Mosesmann, Microsoft officials have indicated that the Xbox will be a game player "first". "In terms of the next catalyst beyond the PC and the game console, the HomeStation class of products is it, in our opinion a market opportunity greater than game consoles and set-top boxes," Mosesmann concluded.

Microsoft officials have declined to comment on future products.

Copyright © 2004 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in The Net Economy.