Nikkei Electronics has released an interview with Bill Gates, centering on issues related to Japan, especially Sony.
Q: Microsoft joined hands with NTT Communications regarding Xbox, meaning that Microsoft will be charging money to consumers via communications carriers. This appears to be a new approach that Microsoft never tried with a personal computer.
A: Is communications free? You have to pay to use an i-Mode phone. You have to pay when you have cable TV. What about the phone? People have to pay for communications. The reason why Microsoft charges money from communications fee is because the business model is different from that of personal computers. All the products in the world is either subsidized or non-subsidized. PC hardware and TV are not subsidized, so the hardware price includes development fee, etc. On the other hand, cell phones and game consoles are sold at low prices, instead of which you have to have some royalty on the software in order to fund the R&D. This is the subsidized model.