Redmond (WA) - If Microsoft did not have a pre-existing obligation to protect its investment in the Windows operating systems, it could easily position the Xbox 360, which premiered throughout North America today, as a supremely powerful, graphics-intensive, high-definition home computer. Microsoft could have made the ultimate monopoly play: an attractive, inexpensive, high-performance PC, that runs the operating system and applications used by most of the world.

For less than the price of some top-of-the-line PC graphics cards sold today, Xbox 360 delivers the same, perhaps better, performance, and adds to it one of the most powerful PowerPC processors ever mass-produced - at least, until next year. As a home computer, it would change history, but that's not what Xbox 360 is. With the established x86 architecture still to be maintained, Xbox 360 remains a game machine. Once considered a moniker of doom for venerable computers in their day like the Atari ST and Amiga, "game machine" is now a badge of honor and distinction for any consumer electronics item - it's what great PCs aspire to become. And the reason Xbox 360 sells for $399 (or as much as $700 for "platinum systems") is actually not so Microsoft can make money selling consoles. It won't. The margins aren't there. In one respect, Xbox 360 is actually less like a PC than an inkjet printer. HP literally considers its printers "ink consumption devices." Xbox 360 is a consumption vehicle.

"It's a better deal from a pure hardware perspective than you would be able to get with a comparably equipped PC," said Matt Rosoff, consumer strategies analyst with Directions on Microsoft. "For a console, I think Microsoft is still subsidizing it pretty heavily. Of course, you can't do all the other things you can do with a PC, but if what you're buying it for is gaming anyway, then it seems like a no-brainer."

But this console is targeting the hardcore gamer, Rosoff believes, and a specific one at that. The average consumer won't shell out this much for a game console, but that's not who Microsoft is targeting. "I would be very surprised if they didn't reduce the price pretty quickly," he added, "at least before Sony and Nintendo come out with their next console."

TG Daily assembled Rosoff and three other respected analysts, who cover different aspects of the gaming industry, and different angles of the Xbox 360 story. We put together a list of questions that we hadn't seen asked by either the rest of the mainstream press, or a good segment of the gaming press. One of these questions, for which you just read Rosoff's response, was this: $400 might seem a steep price to pay for a game console, until you realize that some top-of-the-line PC graphics cards sell for $700 just by themselves. Could Xbox 360 potentially make a bid for the performance PC game player, as a low-cost alternative?

"Because of what people might have to spend on an Xbox 360, if it came down to a choice between a new PC this holiday season or an Xbox 360, you might see some shift [toward] the game console," responded Joe Wilcox, senior analyst at Jupiter Research. "But I would be surprised to see anyone buying an Xbox as a PC replacement."

Chris Crotty, senior analyst for consumer electronics at iSuppli, watches the gaming industry from a hardware vantage point. He sees the opportunity for Xbox 360 to win over some converts...some. For Crotty, a lot would depend on where PC owners are in their upgrade cycles. PC manufacturers would like to believe their units have cycles as short as two years, but some consumers might conclude that their systems for photo processing, home accounting, Web browsing, e-mail, and music management may perform just as well as any newer system they might consider replacing it with. The only potential room for improvement, in their eyes, may be in game performance. "Now, maybe they might say, 'Wait a minute. Instead of spending the money to upgrade my PC, maybe I'll get a game system.'"

Working against that argument, Rosoff believes, is the fact that performance PCs are always a moving target. Two years from now, the Xbox 360 will be largely what it is today, maybe with a larger hard drive and more memory. "The PC continues to move forward," he said, "whereas the 360 is sort of in place."

A statistical average of market share estimates recently published by Forbes gives the original Xbox a 21.8 percent North American market share, versus 62 percent for Sony's PlayStation 2. If Xbox 360 is to gain ground, it will have to appeal at some point to a buyer outside its usual base. What kind of new buyer will this be?

iSuppli's Chris Crotty sees two opportunities, one of which is more geographical than demographic: "Over the last few years, Japan as a country has become more willing to accept global brands that are not Japanese-based - for example, the iPod and iTunes. It's showing that, as the population changes its demographics, Japan is more open to global brands than they were in the past."

The other opportunity for Microsoft, believes Crotty, is for Xbox 360 to attract the absolute newcomer to the gaming scene, who may have been turned off by gaming's pre-existing, almost mindless approach to first-person blow-'em-up scenarios. From what he's seen, Crotty believes "the content is beyond the typical shoot-'em-up content that appeals to the core gamer demographic."

"I think it stands a chance of gaining new customers among what we would call the 'technology enthusiasts,'" believes Directions on Microsoft's Matt Rosoff. "People who looked at the PlayStation 2 and Xbox, and said, 'That sounds like an interesting piece of hardware, but I don't play games, I'm not particularly interested in playing games, I'll pass.'" Rosoff believes Xbox 360 may gain new appeal as a "must-have" gadget, attracting the same consumer who purchased iPod not because they're necessarily music aficionados, but because it's cool. Xbox 360's newly expanded focus on peripheral functions, such as support for high-definition monitors - a first for any game console - may very well broaden its appeal to the CE collector who might not even be a gamer...yet.

This is where the mainstream press has proffered the theory that Microsoft is making a play for a latent customer base in home media center components. But even Rosoff disagrees, pointing out that Microsoft has only reported selling four million Windows Media Center Edition packages, which indicates a less attentive market in the den than many had expected. There may be some early adopters, he feels, who are prone to living what he calls "the Redmond Lifestyle," and who may be eager to experiment with streaming content from the upstairs PC into the Xbox 360 that drives a the media center in the den. "I still think it's a pretty geeky thing to do," he warns, "not mainstream."

Jupiter's Joe Wilcox studies both the consumer electronics industry as a whole, and Microsoft in particular. He believes the media play to which Rosoff referred may pose a danger for the company. "The problem is one of complexity," he told TG Daily. "A game console is not a PC." The personal computer is unique in the history of marketing, he said, because it's a multi-purpose device that has broad appeal. Typically, by contrast, a successful consumer electronics device has one primary function. "When you start adding in other things," he remarked, "you risk compromising the main functionality...My concern is, by adding in this extra stuff, Microsoft may add unnecessary complexity that could diminish the console's primary function for gaming."