Seamus (X-Box) Blackley leaves Microsoft. The XBox was a good idea, one whose potential you can be sure Microsoft will revisit for years to come: it gives them an entry into the living room in a way nothing else will. And if rumors of the Homestation are true, you can bet someone in Redmond has already recognized that.

On the other hand — it is less clear that Microsoft needs to actually manufacture these things. Microsoft, as it found with Hailstorm, is a software company, and it might be within its best interests to make the reference designs and license — liberally — among a large number of vendors across the world. This would let it take advantage of PC-style hardware market dynamics and up the ante against Sony, potentially relegating them to be the Apples of the gaming world. In fact, if you look at the recently announced Longhorn hardware specs, it would be refute to say that they are — partially — moving on that path already.