Which will win, Xbox 360 or PS3? Try Seagate.

November 10, 2006: 5:01 AM ET

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The next-generation console wars are about to begin in earnest, and it's a safe bet that either Sony's (SNE) PlayStation 3 or Microsoft's (MSFT) Xbox 360 will win the hearts (and wallets) of gamers. But if you're placing financial bets, whose hardware should you bank on?

Here's a thought: Seagate (STX).

I drove down to Scotts Valley on Thursday to chat with Seagate CEO Bill Watkins, possibly the most straight-talking, down-to-earth Silicon Valley executive ever. I'll bring you bits of our conversation over the next few days, but one interesting piece centered on gaming.

I asked Bill which segments of the hard drive business are most exciting to Seagate from a revenue and profit perspective. (Keep in mind, Seagate is the world's biggest hard drive maker, with a $14-billion market cap.) He mentioned DVRs and desktops – and quickly mentioned gaming.

"Gaming is pretty big too, still. We've got both PlayStation and Xbox," he said. "We're not exclusive, we have big shares. ... We've got a lion's share of the game business. We have our fair share and more."

Interesting. The PlayStation 3 would be the bigger catch, of course, since Sony is building a 60-gigabyte hard drive into each. But the Xbox 360 has an external hard drive option, and that will be a key accessory to get the full benefit from many games.

So if Seagate's got a good angle on the hard drives in both systems – well, the company will do just fine no matter who wins the console wars.

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