Could be a reality already if Microsoft were really focused.

If they can fold Vista into a Virtualization Stack, they can do the same thing for their infamous game console. The profit margin for 360VM would be at around 90 percent. They would save billions closing down the hardware manufacturing.

OEMs could restore their PC profit margins overnight, justified by the addition of a 360VM with every purchase. Only Vista-capable machines, of course. Resellers could bundle games to cushion the blow to those not accustomed to paying more than a grand for a PC.

Clearly, this would be a defining moment for Microsoft. A notable marketing coup that practically writes itself, giving Microsoft immense leverage in gaming and a means to differentiate a select group of PCs in a very big way.

Sony would probably feint from their epiphany and then quickly run out and buy VMWare or something like them. Leveraging the 360VM would be painful for Apple. I suspect this product would never make it to the Mac.

Windows Live and everything associated with it would be accessible by everyone who owned a PC with the 360VM installed. The 360VM would maintain HDCP integrity, so downloadable content would be DRM protected. The 360VM would assimilate the Microsoft Media Center and deliver a shot across the bow of Apple's living room strategy.

Microsoft is busy pursuing Virtualization while Apple in going in the opposite direction! Apple has taken a perfectly good piece of multimedia software like QuickTime and turned it into a piece of hardware, like Apple TV. It's time Apple started thinking about virtualized hardware too.

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M i c h a e l (OFI)