That is literally what the first Xbox was. It’s internals was a custom mboard running a Celeron 700 and 3.5" HDD (can’t remember what the graphics was based on, maybe a GeForce MX?) with a customised Win2k OS.
All approx. It’s early and I can’t be bothered confirming those specs are 100% accurate :p
I suspect the contract means that they only actually pay for those that are played