DG: Interesting. Very interesting.

JR: And just to amplify that point, so when you think about Windows CE development, which I think of a little bit (chuckles) let's say…it's just a fact…we have somewhere over 500 people working on Windows CE dedicated development. But that really understates the sort of investment we're making on Windows CE. Because we pick up and re-purpose a lot of the code that's developed in other parts of the company. So you know, there's a development organization over in NT that does all the networking and the TCP/IP stacks and that infrastructure. So we pick that up and re-purpose it. So the hundreds of guys that are doing that are indirectly working on Windows CE. The guys working on the browser technology, you know, we pick that up and re-purpose it and post that on Windows CE. The guys doing the DirectX game API, they wrote DirectX for the PC. We took those APIs, re-purposed them for Windows CE type devices and now we're able to produce award-winning games for game consoles. So it allows us to get a tremendous amount of leverage across our overall Windows investment.

DG: Cool. That's interesting. So the Dreamcast is using high-performance 3D chipsets and chips in the same category as 3Dfx gaming chips?

JR: Yes. Exactly. And the interesting thing is that a game console actually has much higher performance characteristics than a PC because they're able to do things directly to the screen and really optimize on the performance. We've been able to take Windows CE and modify it for that environment so that it can be a great game console gaming experience. And what' curious is, what I think is going to happen is that people are going to write games for the Sega Dreamcast that they're then able to port and use on the PC. It's going to go the other way.

I think we're going to begin to find the flow in the integration between these environments going both directions, which I think is a kind of an interesting dynamic.

DG: Are we going to see a Palm-sized PC that's really a Game Boy at some point?

JR: Well, you know, it's interesting. I think that's the challenge. There's nothing that would prevent you from doing that! There are vendors that are looking at doing that. I think that the greatest thing on the Palm-sized PC is that when you get color, it's really good for navigation. When you look at a map in color, it's so much more meaningful than when it's in black and white. So the capability of color on the Palm-sized PC specifically is going to open up a lot of graphical programs, including games.

DG: How do the licensing policies for Windows CE differ from that of traditional Windows or are they similar?

JR: No, it's actually quite different, to be honest with you. Because, as I mentioned before, Windows CE is modular. People can take different pieces that they want. So if you're just taking a few pieces, the kernel and the networking layer, you're going to get one price. If you're taking the "full meal deal", all the components and the shell and the UI and all of the apps, then you'll get a different price. So it's a tiered strategy based upon the components that people use. Whereas Windows, on the other hand, is more monolithic. It is a unified package. So it does not have that breadth of configuration options.