Windows is their OS brand, Surface is the their in house Tablet and Laptop Brand, and now it looks like Xbox is turing into their in house PC brand.
It is a long shot, but I think that Microsoft will reach a point where they flat out allow users to have full windows on their Xbox. I believe they will be sold with a closed garden version of the OS, and then the user will have the option to unlock full Windows if they choose. Personally I would just stick with the closed garden version, and only get apps from Windows/Xbox Store, but I know that there are folks that prefer access to Origins, Steam, Uplay, and such, and I think MS is going to open up to them.
It puts Xbox in a very unqiue position in the Console space, and that is what they need. Sure it is no different that a PC that is shrunk down to Console size, but as the past has shown, people don't want a PC under their TV. Even though Xbox in this case would just be a PC, being marketed as a console/Streamer/Smart Box for the TV, they could finally break through that metal barrier with consumers.
That makes no sense in regards to Xbox taking over the "PC space", not when PC has had that taken since it first became it's own platform. Windows is the OS, PC is the platform hardware, not a console.
I don't see MS giving you what you want, and somehow getting to call it a "100% legit PC". It's a closed off watered down system at best. A PC is a PC, a console is a console.
It's not Xbox taking over PC, it is just Microsoft using the Xbox Branding for their 1st party PC hardware. Microsoft having its own in house PC, does nothing to stop people from building a custom PC, or buying from any number of companies that make pre-built PCs, just like Microsoft having Surface Tablets, and Laptops doesn't stop other manufactures from making and selling products in that category.
I don't believe Microsoft would call it a PC, because the goal would be to sneak it into peoples homes as a console. If they try to maket it as a PC for the TV, I believe it would scare people off, just like it always has in the past. I already have what I want, with XOX as it is. I can use more and more Windows apps every week thanks to Universal Windows Apps, and each update continues to make it operate more and more like full Windows, of course in a closed garden fashion at the moment.
And since when is a PC defined so narrowly? PC's come in every form factor imaginable. Tall Towers, Mini Towers, All In Ones, Laptops, Tablets, Phones, the list goes on and on. Why would an Xbox with full blown windows not be a PC?
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