M-Systems CEO Dov Moran said in an interview with Israeli business newspaper Globes that "Microsoft has taken the hard disk out of its Xbox. The only thing left will be a CD; that's all."
A Microsoft represenative called Moran's comments "speculation" but declined to comment further.
M-Systems announced an agreement late last month with Microsoft to supply flash-based storage devices for future versions of the Xbox. Company executives said they couldn't give details on what the devices would be, but Moran's comments confirm speculation that they will replace the 8GB hard drive built into current game consoles.
"At some point, when users want to save their e-mail messages, copy music, or anything like that, the only storage they'll have is what we give them," Moran told Globes.
Microsoft originally touted the hard drive as one of the key features distinguishing the Xbox from competing consoles, but the storage has not been utilized by software publishers to change the way games work. Instead, the hard drive is mainly used for small-scale storage operations such as saving data on progress in a game, and for nongame functions such as saving music tracks "ripped" from CDs.
Analysts have said that dropping the hard drive could trim at least $20 per unit from production costs for the money-losing game console.
Microsoft has consistently refused to divulge details on the next version of the Xbox beyond new agreements with component suppliers, including graphics chip maker ATI Technologies and IBM, which will make the main processor for the console. The company is believed to be preparing the next version of the Xbox for delivery late next year and is expected to share details with game makers later this month at the Game Developer's Conference.
