Making Xbox relevant..

I was reading Robert Scoble’s blog today (yeh I admit it ), and there was a quick post about Xbox II that got me thinking …..

Xbox II is meant to be on the market next year, whereas PlayStation III won’t be on the market till the year after. So, in the stores come XMas 2005, there will be Sony’s PSII compared to MS’s unit which although supposedly technically superior, will cost probably 3 or 4 times more than the heavily discounted PSII.  As far as games goes, there is and probably still will be more games for the PSII, depending on how much money MS continues to throw at game development.

So for the *purchaser* there isn’t any obvious reason to buy the MS product, instead it sounds much like MS’s entry into the gaming market : an exercise of throwing a *lot* of money at something and still having less than the competition. I think in this, MS is targeting the wrong market sector and are trying to battle Sony on Sony’s grounds. Sony has the edge in hardware manufacturing as MS is not really a manufacturer, and Sony has the edge in game development because they have a larger market sector. It’s hard to convince independent game developers to target a smaller market sector.

I think what MS should be doing is establishing market niches and leveraging those.

First, rule number one is look at your target market, right? And if you said it was teenage kids wanting to play games, you would be wrong. They aren’t the one’s paying for the machine, for the games, for the cable, for the high definition wide screen TV’s etc, it’s their moms and pops that are. That is, focus a bit more on the decision makers, make Xbox relevant to them.

So how do we make Xbox relevant to *non-gamers* ???

Easy !!  XBox is NOT just a gaming machine, it is a connected entertainment system, that is capable of high quality virtual reality. So the quest is to look at what else it can do *other* than just gaming….

As an example, how many moms and pops spend time at the gym or on exercise machines battling that midlife spread ? 😉  So why not integrate Xbox into that ??

Imagine you hop on a cycling machine and there on the big screen you are cycling along beautiful mountain tracks, along coastal roads with stunning views. And on screen you can be watching you heart beat, calories burnt, speed etc. You could also be, via Xbox live, watching your stock quotes customized to your portfolio, and/or a news ticker (also customized to your profile). And maybe even have email alerts. Potentially you could even be buying and selling shares… always a good thing to have that on screen heart monitor while trading 😉

Pretty simple thing to do really. MS writes the software, then does deals with the exercise equipment manufacturers. The manufacturers just have to provide an input jack on their existing computer equipment. A translation unit maybe needed in some machines, but most likely a lot of it can be done by software translators that ship with the “game”.  That’s how MS gets buy in for their “software”.

Suddenly MS has a marketing niche.  When parents walk into stores that sell exercise bikes, running machines etc, there would be that cross marketing of “Xbox compatible”

And it would also be lots of fun.  Imagine you and a couple of your buds are at the gym. You could hop on the exercise bikes and “play” in competition mode, racing each other in the Olympics or the tour de France.

This leads us to market niche two, the same market niche that makes MS have a chance in pocket PCs and smart phones. That’s integration. Being able to take your “profiles” with you, or access them over the web, integrate your stocks, your news preferences, keep track of what calories you have burnt this week, *enabling* you to set goals and enjoy it. And most importantly being able to take that with you from place to place. Integration, similar to how Xbox has memory modules, but some thing more cross platform, be it sdio cards or usb pens etc. 

Who knows, in years to come doctors and dentists might all have them in their waiting rooms, and when you choose your doctor or dentist or gym, you might be asking are they “Xbox compatible” ?

One thing is for sure, MS needs to broaden the market if it wants to increase market share. It needs to market all the other things Xbox can do other than just play games. They have to get the decision makers, the moms and pops to view Xbox as more than just a game system. They have to give them reason to spend more on the Xbox compared to the PS II.

To re-cap, if Xbox is to really cut into market share, I think MS needs to:
(i) create niches and leverage them
(ii) hire more lateral thinkers (oh and send me lots of money)
(iii) think outside the box !

1 Comment so far

  1.   Steve Hiner on June 24th, 2004          

    They’d have to be really careful to implement a plan like yours. It is my understanding that most consoles are sold for less than their manufacturing cost. They do that to get you to buy one then they make their money on the game licenses. In your plan you might have people buying an Xbox and never buying a game so MS would lose money on thay buyer.

    That’s a lot of the reason MS doesn’t put much emphasis on the DVD playback for Xbox. First of all it stinks – I have a bunch of discs that will only play if you do things a specific way, others don’t work at all. If Xbox was a great DVD player people might buy it just for that feature and never buy any games (or at least not enough games for MS to make back the money they lost on the hardware).