Category Archives: 1278

Going Beyond The Enthusiast Market

Charlie Owen, a former Media Center team member wrote a post this
week about Media Center expanding its marketplace, specifically
going from
the current enthusiast market to a more mainstream market
.  Charlie analysis comes to the pretty simple
answer of It’s
possible, but highly unlikely at this point.”

I had previously come to this conclusion, but to me
the real question is “
will Microsoft attempt to develop for the
enthusiast market?”  Lucky for me,
Charlie replied to my comment with exactly what I was expecting

Charlie: “No. That’s because they have never done so. The enthusiast market is
always a subset of the overall market any product targets. Put another way:
Where the goal is making a profit you wouldn’t sacrifice a broad market
opportunity of 100 for the narrow enthusiast market of 10. Making a
Microsoft-sized profit is different than making a profit if you were a much
smaller company.”

In other words the future for Media Center is one or two
options.  Option 1: Microsoft stops
development of Media Center (very unlikely).  Option 2:
Microsoft transitions Media Center to a market which has the possibility to
create a “Microsoft-sized profit.” (Hint: TV on your PC)  Re-quoting
myself
from early this year, the days of Media Center being billed as the
do-it-all center of your home are over.

My opinion continues to be that Microsoft will focus more
and more on the Xbox
360 as the center of the home
.  The
benefits of the Xbox 360 over Media Center are almost endless from a business
perspective.  The massive amount of end
users (an unquestionable 30 million, with 20 million of them being Xbox Live
subscribers) means content providers are going to flock to the platform.  Microsoft can sit back and rake in yearly
recurring revenue from these 20 million Xbox Live subscribers along with the
massive amounts of licensing accessories and the Xbox 360 brand.  Media Center on the other hard makes
Microsoft absolutely no money as it is a part of the standard Windows SKU (eg.
No one except members of The Green Button ever purchased a Windows license just
to get Media Center).

There are still people holding out hope for Media Center to
become a platform for the home.  The
recent announcement that Dish
Network will not be shipping
their tuner anytime soon didn’t
surprise me one bit
.  Why would Dish
bother to continue with Media Center when it is pretty clear Microsoft is
moving away from the consumer they thought they were buying into?  This same concept is at play with Media
Center Extender’s.  There is still some
hope that Toshiba
will be releasing an Extender, but I think the concept
that most people miss is that whether it gets released or not means little in
the grand scheme of things.  If
Microsoft’s heart is not in providing a platform for the home, you can really
know going into your purchase that you’re going to end up disappointed at some
point.

The biggest question mark might be Windows Home Server.  For years I have said the concept of
including Media Center in Windows Home Server is pointless
and does nothing to expand the current market
.  If HP ditched Extender’s and CableCARD due to
poor sales, why exactly would they have the least bit of interest in shipping a
Media Center+Home Server box?  If OEMs
are not interested, why is Microsoft going to develop it?

Most people underestimate the OEMs when talking about Media
Center.  OEMs are really responsible for
Media Center from start to finish from a customer’s perspective.  HP and Dell have shown they have little
interest in Media Center by either discounting CableCARD PCs, killing off
Extender’s, and even in HPs case killing off their HT-styled z-series Media
Centers.  Dish
Network
and DIRECTV
are just as important and have shown that they are increasing less interested.

Microsoft’s latest attempt to make a market for Media Center
has been the custom integrator channel, and some have big
expectations
for what Microsoft might have in store.  Sadly most of the possibilities have already
been proven false, and based on what I’ve been told from those in the industry
interest in Media Center in the custom channel is dropping fast.  I’m interest to see how much longer Microsoft
attempts to push into the market.  With
their partner OEMs such as HP, Linksys, Dish Network pulling out these leaves
the custom OEMs like Niveus Media and Life|ware to pick up the slack.  Unfortunately there is only such much they
can do.  If Microsoft’s commitment in the
channel falls it might be the end of the custom market experiment.

So once again the question is what’s next.  Recently there have been some great new
bloggers
show up in the Media Center community with some great
suggestions.  I’m done with
suggestions.  Microsoft knows exactly
what we want, let’s not pretend they don’t. 
The issue is it is no longer in their best interest to pursue most of
it.  What’s next?  Who knows. 
All I want at this point is for Microsoft to publicly provide a roadmap
for what Media Center is to become.

Xbox Unveils Entertainment Experiences That Put Everyone Center Stage

Microsoft rewrites the rules on fun with controller-free
entertainment, Facebook for your TV, plus instant on 1080p HD streaming video.

LOS ANGELES — June 1, 2009 — The future of home
entertainment has a new name: Xbox 360. Today, Microsoft Corp. opened the
Electronic Entertainment Expo (E3) with a historic Xbox 360 briefing that
rocked, tweeted, revved and awakened the world to a new era of fun and
entertainment. In addition to premiering 10 exclusive new games,
revolutionizing the way we watch TV, and making it easier than ever to connect
to friends, Xbox also welcomed visionary filmmaker Steven Spielberg to
introduce “Project Natal” and controller-free gaming.

“Today with cultural visionaries at our side and
controller-free gaming on our horizon, Xbox 360 authored a new page in home
entertainment history,” said Don Mattrick, senior vice president for the
Interactive Entertainment Business at Microsoft. “For us, this E3 is about
breaking down barriers — between generations, between games and entertainment,
and most important, between video game players and everyone else — in a way
that only Xbox 360 can.”

During its briefing, Microsoft showed why Xbox 360 continues
to defy industry sales trends. First: A lineup of blockbuster games to ignite
every passion, including “Forza Motorsport 3,” “Alan Wake,” “Halo 3: ODST” and
“The Beatles: Rock Band.” Next? A host of groundbreaking Xbox LIVE services,
from instant on 1080p HD streaming movies and television to Facebook and
Last.fm tailor-made for your TV. And rounding it all out, “Project Natal,” a
whole new way to play, no controller required.

“Project Natal”: No Strings (or Controllers) Attached

Unveiled for the first time to the public was “Project
Natal,” pronounced “nuh-tall” and a code name for a revolutionary new way to
play, no controller required. See a ball? Kick it, hit it, trap it or catch it.
If you know how to move your hands, shake your hips or speak, you and your
friends can jump into the fun. The only experience needed is life experience.

Compatible with any Xbox 360 system, the “Project Natal”
sensor is the world’s first to combine an RGB camera, depth sensor, multi-array
microphone and custom processor running proprietary software all in one device.
Unlike 2-D cameras and controllers, “Project Natal” tracks your full body
movement in 3-D, while responding to commands, directions and even a shift of
emotion in your voice.

In addition, unlike other devices, the “Project Natal”
sensor is not light-dependent. It can recognize you just by looking at your
face, and it doesn’t just react to key words but understands what you’re
saying. Call a play in a football game, and players will actually respond. Want
to log onto Xbox LIVE? Simply step in front of the sensor.

“The next step in interactive entertainment is to make the
controller disappear,” said Steven Spielberg, visionary director and producer.
“With ‘Project Natal,’ we’ll see games that bring everyone together through
technology that actually recognizes us.”

The Best of the Internet, Custom-Made for Your TV

Groove, party or connect with a friend. Xbox LIVE, the
world’s largest social network on TV, today announced that Facebook and Last.fm
would be tailor-made for your TV, only on Xbox 360. Microsoft also announced
Xbox LIVE Party for movies, which allows movie experiences to be shared — on
the couch or across the country over Xbox LIVE in supported movies.

“We are always asking ourselves how to make the TV more social,”
said John Schappert, corporate vice president of Interactive Entertainment
LIVE, Software and Studios at Microsoft. “By bringing Facebook, Last.fm and
Xbox LIVE Party for movies and TV shows to Xbox LIVE, we’re not only extending
the walls of your living room beyond your home to your friends in different
corners of the world, we’re creating the definitive social network, uniting
more than 200 million people to share status updates, pictures, thoughts on
music and the world’s best online gaming experience.”

The addition of Facebook to Xbox LIVE means friends are
always connected, anytime, anywhere — from virtually any couch. But updating
your status and sharing photos won’t be the only things you can do. Using
Facebook Connect, you can share your greatest moments in gaming by posting
updates and screenshots from supported games directly to Facebook. Don’t let
your moment of glory fade away — make sure everyone sees it with Facebook
Connect, starting with the future version of the premier EA SPORTS golf
franchise “Tiger Woods PGA TOUR®.”

A first for TV, Last.fm,1 part of the CBS
Interactive Music Group, will give Xbox LIVE subscribers access to millions of
songs streaming through Xbox 360 to the best speakers in the house. Xbox LIVE
subscribers will be able to create their own free, personalized radio stations
and listen to them with friends in the living room or across the country.

Xbox 360 also solidified its place as one of the leading
social entertainment networks by announcing Xbox LIVE Party for movies. Go to
the cinema with your friends whether you are sitting on the same couch or in
living rooms across the country. Starting this year, you can share a virtual
theater, see your avatar (a virtual you) on the screen, all while you listen to
each other laugh and cry at the movie through voice chat on Xbox LIVE. With
movie parties, the only thing you can’t share is the popcorn.

Read
Full Press Release

Microsoft Connects the Dots with Zune HD, Zune Marketplace, and Xbox

This week Microsoft took the wraps off the next Zune, dubbed
Zune HD
.  It seems to be your basic next-generation touch screen only
media player with the common additions of WiFi and an web browser (IE based). 
There are some other interesting parts such as a HD Radio tuner, an OLED
screen, multitouch, and even HD output at 720p via a dock.

The most interesting part of the announcement is not the
device, but rather the service.  The Zune Marketplace will now integrate
with the Xbox LIVE Marketplace, finally drawing a realistic picture of
Microsoft’s “3 screen” vision of the future. Getting the most press is the HD Radio tuner, the non-HD
resolution of the OLED screen, and the concept of Microsoft competing with the
iPod touch.

HD Radio tuner doesn’t do much for me, it will give people a
chance to explore something they likely have never heard of before, and
apparently the FM radio tuner has been a big selling point among existing Zune
buyers.  The resolution on the OLED screen is only 480×272, which many
have noted is not even close to HD.  I’m not really sure why people think
they need 1080p on a portable player, the lower resolution screen likely
benefits the majority of people who put low-bitrate and resolution content on
the device in the first place.  If you have HD content, the dock now
outputs 720p over HDMI.  The big question
in terms of resolution is actually what codec’s and resolutions it supports
syncing.  If it supports all popular
codecs and HD resolutions, that means I can sync without transcoding.

I have never seen the Zune as a good competitor to the iPod,
I don’t feel much different about this one.  Microsoft is still playing
catch-up here by connecting their services.  This is something Apple has
mostly had for years.  Within the next 2-3 years I can finally see the
landscape start to change a bit, but Microsoft is going to have a very hard
time going after Apple when you compare numbers.

Lacking is any mention of Media Center, which wasn’t a shock
to me personally.  I firmly believe Microsoft has moved on from what most
reading this wanted Media Center to be, and of course for years I’ve said the
Xbox was the real competition to Media Center (this will become much clearer as
we go on).  Connecting the Xbox, Zune, and Windows finally makes all of
the products marketable.  Microsoft also
just announced that Xbox
360 has sold 30 million units and has 20 million on Xbox LIVE
.

A few have noted that all the details have not been released
and that Media Center integration could still be there.  I don’t
anticipate it, but would welcome it.  I doubt we will see this act as a
Media Center Extender as many have wanted.  If Microsoft could of improved
anywhere in the Zune-Media Center connection I hope it was with syncing
content, mainly TV.  The Zune does support syncing TV, but it doesn’t
support anything copy protected (CableCARD, likely any future premium Cable/Sat
services), and also doesn’t support syncing content with Dolby Digital audio. 
If this stays true just about the only TV content the Zune can sync (in the US)
will be analog cable/satellite captures.  Even OTA content will be purely
Dolby Digital next months, so even your favorite local channels will not sync
unless Microsoft decides to change.

Xbox 360 Sees Record Growth in 2009

Year-over-year growth jumps as Xbox 360 console sales hit 30
million globally and Xbox LIVE community reaches 20 million users.

REDMOND, Wash. — May 28, 2009 — Microsoft Corp.
announced today that sales of Xbox 360 consoles have passed the 30 million mark
globally, with its Xbox LIVE community swelling to more than 20 million active
members. After the biggest year in its history in 2008, Xbox 360 achieved the
highest percentage growth in hardware sales of any console so far in 2009, up
28 percent over the previous year.1

The success of the platform can be measured across the
business, with Xbox LIVE now considered the world’s largest global
entertainment network. Increasing consumer desire to connect with friends,
download and enjoy blockbuster movies and TV shows, and extend the life of
their favorite games has been the primary driver behind the growth of Xbox LIVE
membership and the reason Xbox continues to expand offerings on the platform.

“We’ve always been confident that Xbox 360 offers more
entertainment value than any other console on the market, and these latest
numbers show that consumers agree,” said Don Mattrick, senior vice president of
the Interactive Entertainment Business at Microsoft. “We expect our growth to
continue to accelerate. Our news at E3 next week will underscore our commitment
to bringing blockbuster entertainment experiences to everyone and to growing
the Xbox entertainment brand globally.”

Over the course of this console generation, U.S. consumers
alone have spent $14.5 billion across all categories on Xbox 360 at retail.1
This number reflects strong interest in a comprehensive entertainment offering
that includes the ability to connect with others socially and to digitally
download entertainment, be it games, TV shows or movies. To date, consumers
have downloaded nearly 1 billion pieces of gaming and entertainment content
from Xbox LIVE Marketplace, including a broad array of premium high- and
standard-definition movies and TV shows from top studios and networks around
the world.2

In addition, Xbox 360 continues to be the platform of choice
for the industry’s top games, generating $5.9 billion in sales to date at U.S.
retail for third-party publishers, which is more than those of
current-generation consoles combined.1 Xbox 360 also leads
current-generation consoles in game purchases, with consumers owning an average
of 8.3 titles each.1

Activity on Xbox LIVE, the industry-leading online gaming
and entertainment service, surged following the launch of the New Xbox
Experience in November 2008. Since that time, the community has recorded a 136
percent increase in new members, TV and movie downloads have more than doubled,
and purchases of games, Game Add-ons and more on Xbox LIVE Arcade have
increased by 70 percent.2 Xbox LIVE reaches 26 countries worldwide
and is now in more homes than any satellite television provider.2
Before the end of the year, the number of Xbox LIVE members will surpass the
number of subscribers to the largest cable provider.1 Consumers can
expect more exciting announcements from Microsoft next week as Xbox 360 kicks
off the Electronic Entertainment Expo (E3), the world’s premier trade show for
computer and video games and related products, with its press briefing on
Monday, June 1, in Los Angeles.

About Xbox 360

Xbox 360 is a premier video game and entertainment system.
It is home to the best and broadest games plus more entertainment than any
other device connected to the TV. The digital center of the living room, Xbox
360 blends unbeatable content, including personal pictures and music, with a
unified online social network to create a limitless entertainment experience
that can be shared at home or across the globe. More information can be found
online at http://www.xbox.com/xbox360.

About Xbox LIVE

Xbox LIVE is the most comprehensive gaming and entertainment
network connected to your television, delivering the largest movie, TV music
and gaming library on a single device, and instant access to select movies and
TV shows.

With an active community of more than 20 million people
across 26 countries, Xbox LIVE brings friends together — from the same living
room or around the globe — to share the best in home entertainment. With an
Xbox LIVE Gold Membership, enjoy exclusive benefits and premium access to
movies, music, TV and games from the top studios and services, all in one
place. More information can be found online at http://www.xbox.com/en-us/live.

Microsoft Announces the Expansion of the Zune Entertainment Service to New Platform and Markets; Confirms New Zune HD Portable Media Player

Premium Zune digital entertainment service to be available
internationally on Xbox LIVE.

REDMOND, Wash. — May 26, 2009 — Microsoft Corp. today
announced the evolution of Zune, the company’s end-to-end music and
entertainment service, to a new platform and new markets. Zune will extend its
video service to Xbox LIVE internationally this fall. This marks an important
development in the Zune strategy and brings the Zune brand to more than 17
million international Xbox LIVE subscribers. In addition, Microsoft confirmed
the next generation of the Zune portable media player, Zune HD. Available in the
U.S. this fall, Zune HD is the first portable media player that combines a
built-in HD Radio receiver, high-definition (HD) video output capabilities,
organic light-emitting diode (OLED) touch screen, Wi-Fi and an Internet
browser.

“The Zune music player is an integral part of the overall
Zune experience, and we’re proud to be growing and extending our offering
beyond the device,” said Enrique Rodriguez, corporate vice president of the
Microsoft TV, Video and Music Business Group. “Delivering on Microsoft’s
connected entertainment vision, this news marks a turning point for Zune as it
brings cross-platform experiences and premium video content to living rooms
around the world.”

Zune Service Expands to New Platform

Zune will be a premium partner in the Xbox LIVE Video
Marketplace, bringing an exciting catalog of TV and film to the platform. Zune
will occupy the first slot within the Xbox user interface in the Xbox LIVE
Video Marketplace, exposing the Zune brand experience to millions of new
consumers for the first time. At the Electronic Entertainment Expo (E3) next
week, attendees will see firsthand how Zune integrates into Xbox LIVE to create
a game-changing entertainment experience.

Introducing Zune HD

  • Zune HD is the next iteration of the Zune device family and
    brings a new level of listening and viewing experiences to the portable media
    player category.
  • Zune HD comes with a built-in HD Radio receiver so users can
    listen to higher-quality sound than traditional radio on the go. Users also
    will have access to the additional song and artist data broadcast by HD Radio
    stations as well as additional channels from their favorite stations
    multicasting in HD. If you don’t like the song playing on your station’s HD
    channel, switch to its HD2 or HD3 channels for additional programming.
  • The bright OLED touch screen interface allows users to flip
    through music, movies and other content with ease, and the 16:9 widescreen
    format display (480×272 resolution) offers a premium viewing experience on the
    go.
  • The HD-compatible output lets Zune HD customers playback
    supported HD video files from the device through a premium high-definition
    multimedia interface (HDMI) audiovisual docking station (sold separately)
    direct to an HD TV in 720p.*
  • Zune HD will include a full-screen Internet browser optimized
    for multitouch functionality.
  • Zune HD is Wi-Fi enabled, allowing for instant streaming to
    the device from the more than 5 million-track Zune music store.

Xbox 360 Records Its Biggest Year Ever

Driven by record sales at retail along with an 84 percent
jump in online consumer spending; global install base lead over PlayStation 3
expands to more than 8 million units.

REDMOND, Wash. — Jan. 5, 2009 — Despite a tough
economy, the gaming industry held strong in 2008 and Microsoft Corp.’s Xbox 360
video game and entertainment system recorded the biggest year in Xbox history,
with more consoles, games and online entertainment experiences sold than any previous
year. It was a year in which life-to-date unit sales of Xbox 360 systems
climbed to 28 million consoles worldwide — expanding the product’s lead over
Sony PlayStation 3 to more than 8 million units. The Xbox LIVE community also
grew to more than 17 million active members, as online consumer spending
increased 84 percent from last year. Since the launch of the Xbox 360 three
years ago, more than $1 billion has been spent on Xbox LIVE. This amazing
growth was fueled by the launch of the New Xbox Experience1; the
broadest selection of hit games, TV shows, and movies available; and
mass-market price points, starting at $199.

Xbox 360 is experiencing record-setting sales around the
globe, particularly in Japan and Europe, nearly doubling market share in these
key territories. In Europe, the Middle East and Africa (EMEA) specifically,
Xbox 360 has now sold more than 8 million units, extending its lead over the
PS3 by more than 1 million units.

“For Xbox, 2008 will be remembered around the world as a
pivotal growth year at retail and online — even in the face of tough economic
conditions,” said Don Mattrick, senior vice president of the Interactive
Entertainment Business at Microsoft. “Worldwide, a record number of players
flocked to our broadest games and entertainment lineup ever, while the New Xbox
Experience thrilled millions of fans by making our console even more engaging.
And yet, we’ve only provided a glimpse into the new world of interactive
entertainment that we’re imagining. The best of Xbox 360 is yet to come.”

One of the biggest trends in 2008 was consumers taking
advantage of the convenience and value with digital distribution of games and
entertainment content. One of the most popular offerings this holiday was
Netflix on Xbox 360, which as a Netflix member provides users with access to
unlimited viewing of more than 12,000 movies and TV shows in DVD quality as
well as many in high definition. 2 In addition, Xbox LIVE is home to
the largest library of downloadable games, game add-ons, movies and TV shows.

Read
Full Press Release

‘08 Disappointments: Xbox IPTV

2008 was going to be the year of IPTV, and while AT&T and
Verizon (actually QAM) have made great strides in the IPTV marketplace, Microsoft hasn’t done
much to push what was promised on their end (Note: Microsoft powers AT&Ts
IPTV DVRs).  Of course the prime example
here is the concept of using your Xbox
360 as an IPTV DVR
.

The concept had been thrown around online for some time, but
at CES 2008 Microsoft made it official and announced they were working with BT in
the UK to bring the functionality to life
. 
That’s about the last time I heard anything on that subject.  I’m not sure if the service never launched
with BT, but to say the concept has been anything but a failure would be
pushing it.

AT&T is still the only [major] US provider using Microsoft’s
MediaRoom IPTV software, which means they are just about the only option for
this concept coming to life in the US.  I
don’t see the concept that appealing for IPTV providers (I
actually said it would flop in Nov ‘07
), but it will be interesting to see
if CES 2009 brings anything about Xbox and IPTV back into the spotlight.

My Twelfth Post on Xbox 360 Not Getting Blu-ray

I never thought I would get a dozen posts out of this topic,
but what do you know!  Some said I was
dead wrong when I predicted that Microsoft wasn’t planning on adding Blu-ray to
the Xbox 360.  After covering the issue
from every different angle possible (Here,
 Here,
 Here,
Here,
 Here,
Here,
Here,
 Here,
Here,
Here,
Here)
I still couldn’t come up with a good reason why it was in Microsoft’s best
interest to add Blu-ray to the Xbox.  It
isn’t hard to come up with reasons why potential or existing Xbox 360 buyers
want Blu-ray, but taking a Microsoft perspective is a bit different.

Cut to today, Forbes
has a story that quotes Shane Kim
, vice president of strategy and business
development for Microsoft Entertainment division
saying I
can categorically say that we’re not working on a Blu-Ray player for Xbox 360.”

What is Microsoft’s focus? 
Digital distribution.  As I’ve
talked about either today Netflix
adds just another option for downloads/streams on the Xbox 360
(but
not Media Center Extenders
) and while I don’t
think Microsoft should just focus on digital distribution
you know that is
their goal and it isn’t going to change.