v2 Extenders Let Down Big in Price Points

Update: Joe Belfiore, VP of the eHome division at Microsoft addressed some of
these issues in the comments of this post, scroll down for more.

Well, so much for v2 Extenders being anything close to a
success.  I’ve been talking
about what price points a successful Extender needs to be at for years
(2005 here people), and today
we find out that D-Link’s
offering is set to retail for $350
, and considering that Linksys’
is most likely built on the exact same hardware
it isn’t likely to be much
different in price (Updated: Just announced at $300 for standalone, and $350 for DVD/Extender.  Not bad in comparison to D-Link, but nothing to get excited about)

What doesn’t Microsoft understand here?  First the
public’s feeling is that they are limiting Extenders to the Xbox 360 so they
can grab all the profit (not really since they lose on every 360, but that’s
the general public’s feeling) so their solution is have partners add Wireless-N
and additional codec support in standalone v2 Extenders and sell it for $80
more than an Xbox 360?  Even better, codec
support on the Xbox 360 Extender
doesn’t seem like it will improve much so their is no “good” Extender to purchase for someone like me.

Unless these prices can fall fast, I think this is the end
for Extenders.  Great concept, but they just can’t pull it together. 
I’m not paying $350 for a standalone Extender, and that sets the
DVD/Extender combos at somewhere between $400-$450.  Crazy.  Anyone
want to guess what premium an Extender
will come at now?

I think this is the last time Linksys will touch the
product.  Their v1 Extender bombed due to platform restrictions on
Microsoft’s part and high price, and I don’t see them pushing to many v2
Extenders unless their price is much lower.  Two failed product revisions
would tell me to get out of that market and concentrate on my own offerings
much like HP has done with their MediaSmart division.

While I don’t like where they are going in terms of being
able to work with protected content, I’m now very interested to see what price
point Sage’s upcoming standalone Extender will ship at.  Microsoft has yet
to be able to put the pieces together with Media Center; my
renewed internet in Media Center
has now fallen so low that I can’t even
explain it.

To sum it up, four CableCARDs only for custom installs.  v1 Extenders don’t work on Vista (no rebate program
).  Overpriced v2 Extenders.  No DVD streaming to overpriced Extenders.  No MPEG-4 support in Xbox 360 Extenders.  No SoftSled (Software Extender). Delayed launch/beta of the Media Center
update in Vista.  No DIRECTV support despite
it being announced two years ago.  Zune that doesn’t sync with Media Center.  Windows Home Server which doesn’t work out-of-the-box with Media Center. <Insert other bad choices here by eHome and other Microsoft product divisions>.

If I was running a company or division that I didn’t want to
succeed, what would be my next move?  The
good thing is that we don’t need to guess, just wait another few months and it
is bound to happen right in front of our eyes.

Edit: I’d also like to note that D-Link has their DSM-520,
and while it is not a Media Center Extender it does support the exact same
(DVR-MS, MPEG-2, WMV9, MPEG-4 ASP, MPEG-4 AVC) and can be purchased for $150
to $180
at major US retailers.  While the UI sucks,
you are basically paying double the price for a true Media Center Extender that gives you access to the nice UI, a single management point, access to your PCs tuners, and the ability to playback protected recordings.

Update: Linksys standalone v2 Extender will be $300, DVD/Extender will be $350.  HP will provide an update for their current MediaSmart HDTVs to enable Extender functionality.

Update: Joe Belfiore, VP of the eHome division at Microsoft addressed some of these issues in the comments of this post, scroll down for more.

51 thoughts on “v2 Extenders Let Down Big in Price Points

  1. So, I’m not crazy in thinking that we could put together our own small MCE box for the price these things are coming out at, that might act as a more robust extender of sorts and give us some of the functionality that these things so woefully and glaringly lack. You make excellent points about how badly a company can piss off its customers before competitors begin to make in-roads in market share. It will be interesting to see 3rd Party software reactions/responses; Apple’s offering is not much better though in my opinion. Oh well.

  2. It is true that Apple isn’t offering much right now, but to be fair while v1 Extenders were a great concept, they were “not much” either. Extenders are up to the second generation, three if you count the Xbox 360. This kind of stuff should have been figured out long ago, and while Microsoft can’t set the price of the hardware in this case, they should of set a larger target price to hit or just concentrated on making the Xbox 360 a good Extender (it is more powerful in the long run).

    While I don’t think the Sage Extender will be much cheaper (same type of hardware really, except maybe the Wireless-N which I think should have been left out of these) it does matter another solution that is directly competing Media Center.

  3. Who says Microsoft made D-Link set the retail price at $350? Seems blame shouldn’t be placed soley at Microsoft. It’s D-Link’s product. If Microsoft pushed for a higher retail price – D-Link should have pushed back. But there isn’t anything saying Microsoft forced D-Link to set the price so high.

    I dunno, I just don’t buy the “its Microsoft’s fault” on this.

    But I too am disappointed the price is so high 🙁

  4. MitchSchaft: It should be based on the Sigma Designs MCX reference design. Software is either Linux or Windows CE that connects to the Vista PC. You really don’t interact with the software that is on Extenders.

    Brandon: I didn’t mean to imply that Microsoft set the price, I said that the price is too high and Microsoft was a whole needs to get their act together. Both Microsoft and D-Link (and Linksys) knew what the price needed to be. If that couldn’t have been meet, then back to the drawing board it should have been.

  5. I agree – a huge letdown!!! I was really hoping for $199 or less on these v2 extenders. Even if that meant just a very basic box with an Ethernet port USB ports and you had to add an access point for 802.11n if that’s how you wanted to connect. That way people with wired networks would not even need Wifi they may not even use.

    There’s really no way for the common man to afford the MCE ecosystem as it is set up. A couple of these extenders, a high priced OEM only PC, two OCUR DCT units, a new high speed router… you are talking major dollars here. Not to mention if your PC crashes during the night because your kids downloaded a nasty virus and your wife’s shows don’t record the next day grief you are going to suffer.

    My idea: the MCXBox. The CableCard tuners should be combined with the extenders and a hard drive added running the Media Center interface. Basically a closed box like a TiVo – this is the device Microsoft should get approval from CableLabs and selling under their own name. Have this device capable of recording HD content and playing on “softsled” software on the PC and allow content recorded in SD and clear QAM on the PC to be transferred to the MCXBox. The vendors like D-Link and Linksys can offered certified solutions for getting this content around the house, but the closed CableCard device is all Microsoft.

    Basically my thought is the whole thing is backwards – the Extenders should have their own tuners. Using a PC down the hall and in another room is just ultimately too fragile and unreliable.

  6. Rebates for v1 extenders with Vista was never going to happen. The entire electronics industry constantly has iterations that break compatibility. I have dozens of electronics, tools, cables and adapters scattered around my house due to these types of changes. It’s like asking for a rebate for my AGP video cards because my new computer only has PCIe slots.

    It’s not realistic to expect Microsoft to put pressure on OEMs given the anti-trust case and it’s spotlight on Microsoft’s relations with OEMs. It’s an issue that cuts both ways; it’s great that Microsoft can no longer bully OEMs around to edge out competition but it also means they can’t put pressure on them to sell products cheaper.

    The WHS chaps have said their next focus is going to be MCE-related and while to us Media Center users it seems like an outrage that there isn’t support for MCE out of the box the truth is we are a very small slice of the pie. We are a vocal but tiny segment and at the end of the day I begrudgingly agree that for a 1.0 release the WHS team focused on the right bits.
    I know there was conjecture about a Media Center out-of-band update but I thought that was more inferred from the past MCE update cycle rather confirmed information about future Vista Media Center updates. There was that one blog post about releasing out of band for Vista but I don’t recall dates and without dates you can’t they’re delayed. I could be wrong though, it’s very possible I missed some key blog post where they said Q3 ’07.

    Aside from those little points I agree with you, v2 Extenders are too expensive, the CableCARD solutions too restrictive and you always get the feeling that half of Microsoft is really into Media Center while the other thinks it’s a waste of time so you get a product that reflects both sides. There is also the stark reality that most consumers aren’t ready for Media Center+Extender; just the process of getting your TV feed into your computer blows most peoples minds and once you start adding on networking and storage most people are asking why not just use Tivo.

    The price point of these extenders is also telling; they’re not for your average consumer and they’re priced to make sure that a person buying one is doing so because they know exactly what they want, think more custom installs and high-dollar media rooms. Price it around $150 and parents may buy it for their kids going off to college with no idea what they’re really getting into.

  7. I love the concept of the extenders. It’s a tough sell with the household CFO, though, when competing DVRs cost less than Media Center Extenders.

    It’s the ability to distribute content via my home network that keeps me playing with PC-based solutions. I’m willing to pay a bit more for that. I’m hard-pressed, though, to consider snagging a Pika box at $300 when no one can say when I might be able to view HD DirecTV content with it.

  8. I am too dissapointed in the price of these extenders, but I am even more disappointed about the fact that the extenders STILL do not play VIDEO_TS folders.

    Fact is that almost all “Media Extenders” do play VIDEO_TS folders.

    Perhaps I should consider moving my software development to another platform.

  9. >Perhaps I should consider moving my
    >software development to another platform

    Agreed !! – Hmm Sony and Apple are the Future now !

  10. VIDEO_TS folders are a touchy subject because of the fact that you are ripping a DVD & while others can get away with it a big company like MS is under a lot of scrutiny and I doubt they can even if they wanted to.

    {Oh yeah & FYI the AppleTV does not play them either without a lot of hacking so much for platform of the future}

    The price is disappointing but at the same time I understand that all the codecs have to be licensed for playback, software from Microsoft has to be licensed, chips for decoding everything must be paid for and all that could certainly drive up the cost of the unit.

    They are probably pricing them a bit more then they need to be but I can imagine if the fact they provide easy access to XviD/H.264 content and if they prove popular they could come down in price.

    As for protected content I for one don’t care about it as I have no intention of buying DRM audio/videos.

    The extenders will be for my own content from DVD’s turned into XviD or H.264 video & I believe thats what Microsoft is targeting.

  11. Why not just release a Softsled of MCX…
    I would gladly pay $200 for a license…

    I have 4 machines at home – and 1 laptop…
    Just the joy of installing MCX-addin and connect to my MCE…

    I’m probably just dreaming…but just install -> Start program -> Live TV / Recorded TV

    What’s the problem with that?

  12. Sigh,

    Why do I keep messing with Msoft. If great developers like Brian Binnerup are questioning the platform why am I messing with it?
    As for the Ripped DVD’s, Msoft doesn’t have to provide the ability for it out of the box, they only need to open it up to developers to impliment it. Seriously, Msoft doesn’t want to have Divx support, fine, but don’t restrict others from making it and allowing it on extenders.
    I have hundereds of dvds (yes they are all bought), and I want to watch them around the house. I bought a few Sony changers and with MyMovies am able to catalog them, great! Oh wait, I can’t stream them to my xbox 360, I have to either transcode or convert to WMV. Oh wait, when I convert to WMV the FF and RW stinks; there is not menu or other language support, etc, etc, and it takes forever!

    Forget about the whole DirecTV thing. I guess my tv viewing will just continue with my DirecTV TIVO.

    Once again I have my eye on Apple and the independent program “Centerstage” http://centerstageproject.com/
    I can get a cheap Mac mini for a little more than an extender!

    Thanks Msoft, way to go!

  13. I posted this same message on The Green Button, but I saw the LinkSys unit again and had to post it here too.. Man that’s an ugly box.
    It’s like they don’t even take their product seriously.

    Wow.. what an ugly box. It looks like they spent zero time on the looks.

    The V1 extender looks much nicer IMO and looks nice with my other equipment. This box is as plain as they come and the DVD option looks even cheaper with the cheap buttons etc. This would be fine on a sub $200 unit, but it looks like it’s going to be $300 and $350 .

    WTF was LinkSys thinking.. don’t they have a design team?

    The DLink looks nicer.

    But hey, if it works well and even drops in price, I’ll let it pass.

  14. Robert Lominski – while nice the idea that opening up the extenders is simply impractical they are closed boxes with custom chips from Sigma Designs by the looks of it running software codecs designed for those chips. The software component in the extender would have to explicitly support VIDEO_TS there is no other way.

    Plus not sure why your saying MS doesn’t want DivX support thats what they are adding to the v2 extenders ???

    If you are looking for something that does everything including ISO/VIDEO_TS go after a Tvix 5100 thats what they are for.

    The Extenders are only meant to extend the functionality of Media Centers stock features not support everyones pet plugin/feature as great as that would be.

  15. Rez: The Xbox 360 Extender doesn’t support DivX as we have talked about before, that’s likely part of everyones problem here.

    Microsoft supports VIDEO_TS playback in Media Center. They even developed their down DVD Library application that is standard in Vista. They also support DVD Changers, all of which can only be used at the local PC.

  16. Wait- $350 is too much for a device that extends the functions of another device that should cost north of $2,500 (on the low end)? AND you get a local DVD playback device? I think all of you are missing the big picture here. Sure you can buy an off the shelf desktop Vista-based PC with MC and use it with Extenders, but let’s face it – that’s not really the whole point nor what the eHome division is all about. They are trying to create and grow the concept of AV-form factor Media Centers with high-performance that are solely dedicated to running Media Center. Look at Niveus, Alienware and others that are introducing AV-form factor Media Centers STARTING at $3K. How is another $350 on top of that considered expensive? Geez – Niveus was mentioned in Belifore’s keynote this morning. Don’t you think this is the market that eHome/Msft is really targeting?

    As a custom integrator that installs Niveus (and soon Life|ware as well) media centers I applaud the introduction of these MCE’s and frankly, think they are cheap for what you get. Hey – Xbox is cool – I have one in my bedroom because it was the only way to extend my N7 – but not everyone needs or cares about gaming. Why would I install a device that was completely designed and engineered for gaming; is loud and has a long boot up time into Media Center when I can install something that is quiet and solely dedicated to Media Center? I have an install I am wrapping up right now where I was going to put in 2 Xboxes – I’ll wait for one of these v2 extenders and use cable boxes for now instead.

    I think a lot of you need to recognize that yes – you could visit Computer Warehouse , Fry’s etc., and probably put one of these together yourself for much cheaper. Great – but you’re in the minority. The rest of us want a product that we can pull out of a box, plug in and know that it will work. Not to mention a product that is manufactured by a sizable company that will guarantee/warranty the product if something goes wrong. I respect the DIY skills of many of you, but you need to understand that the majority of the people don’t share your skills. They just want something that works and if they have to pay a premium for that, then so be it.

  17. I would just buy 360’s and have them boot into media center.

    Steve Jobs said it best about Apple TV and it applies to the whole stinking industry. These solutions are for “hobbyists”.

    The only company that has it halfway right is Tivo, but the cost is ridiculous.

    Until we have have a rock solid box that can record HD and distribute it throughout the home at a reasonable price, count me out.

    TV is overated. I just bought a new desktop and decided not to put a tuner card in it. Everything I want is available on the net for free or lower cost, except live sports.

    I have spent thousands on this junk over the past 5 years and all I have to show for it is a comcast DVR, Windows Vista and an XBOX 360 as an extender for music and pics.

    I am not going to be a “hobbyist” any longer…

  18. CoastalHome: I’m kind of confused by what your main point is.

    eHome is a consumer division.  To think that their goal is not the CI market, would be dead wrong at best.  Creating standalone Media Centers has failed.  HP dropped them, Gateway dropped them, ViewSonic dropped them, etc.  There is a market for them in your market, but that’s not the main market that Microsoft is doing for.  Most CIs don’t respect PCs, just head over to Remote Central or like and you can find dozens of CIs that hate the concept.  The only thing they hate more then Windows PCs is Life|ware.

    Also, a big company to stand behind their guarantee/warranty is great, but don’t expect that here.  Linksys dropped v1 Extender and didn’t support them at all just months after launching them.

    This isn’t about DIY, it’s about the right price and features for your market.  Microsoft and their partners have made some of the worst decisions in history with Media Center.  Thinking that the high price will drive a new market or drive standalone CE-style PCs is wrong.  High prices of the Extenders will turn more consumers away then it will bring them in.

  19. Actually, I agree with coastalhome. For an entry point, $300-350 is not outrageous for what you are getting. Sure $200 would be better, but can someone point me to the bill of materials for retail components that would get me a high def extender like this? Maybe I am missing something here, but after my disappointment with Xbox360 (too loud, extender did not work with windows xp mce), I am willing to give this a try.

  20. vppkj: D-Links other networked media player goes for around $150, plays the exact same formats. Extenders would be double the price.

    Now, the one possible thing to note is that the MSRP for those is $250. But, I wouldn’t expect the price to fall fast for MCXs.

    $300-$350 is not going to sell these products.

  21. chrisl: with all due respect: you’re not understanding the CI market. (Also, my main point was that eHome IS targeting the CI business.) To say a high price will drive a CI away is totally wrong – if anything CI’s would want to see price points higher than this (expect that from Niveus). CI’s make money in margin and a $350 product ain’t going to have that much margin built into it. Plus, CI’s get their products direct from manufacturers and CE-related distributors and those distributors don’t typically carry mass market brands like Linksys, D-Link, etc. So if anything, we’ll start seeing higher-end extenders installed in homes rather than their lower priced brethren.

    Also, eHome is a consumer division as you suggest, but talk to any of the guys there (Kollenkirk, Belifiore, etc.) and they will tell you they are, at this time, targeting the high-end CI channel with Media Center. Why do you think they were at CEDIA? You were so jazzed about them being there; why the sudden turn around?

    I’m sure you’ve been doing this alot longer than I and have good reason to be cautious, although you sound a lot more pessimistic than cautious. But beleive me – Msft is breathing new life into this format and you’ve only seen the beginning.

    Also, HP dropped their AV-form factor Media Center because, frankly, it wasn’t very good. Plus, IMO they are way too big of a mass market, direct sale consumer company to succesfully market and support a product that begs to installed by a professional.

    Invariably these first round of v2 Extenders (sans Niveus) will be sold at mass-market retail chains and will be met with mixed if not a downright confused reaction. Not until you remove the box and build it all into the TV where the consumer buying it at Best Buy doesn’t really have to think about it will this have broad main stream acceptance/success. And even then, how many consumers buying those TVs won’t even know they have Media Center? That’s happening with dektops and laptops right now and has been since the inception of Media Center. Msft and eHome NEED the CI channel to PUSH this out into the market is it’s ever going to succeed. Look at DVD or 5.1 surround sound as proof.

  22. Someone said, “VIDEO_TS folders are a touchy subject because of the fact that you are ripping a DVD & while others can get away with it a big company like MS is under a lot of scrutiny and I doubt they can even if they wanted to.”

    Not every VIDEO_TS folder contains a ripped commercial DVD. People do have digital camcorders and home movies you know.

  23. What a joke. I’ll wait a year until these things are being cleared out on Woot for $100. I just don’t see the value proposition here when comparing against the Xbox 360. Total let down, nice job marketing geniuses!

    Anyway, back to Bioshock.

  24. CoastalHome: I’m not saying that the CI market is not important to Microsoft, but I’m say it shouldn’t be there main target. If it is, then they need to rethink (yet again), because I don’t think it will get very far in the CI market. It will get a nice boost, but unlike DVD or 5.1 it is not going to “carry over” to the consumer market. Those did because they are simple, cheap, etc. Media Center will never be simple or cheap, nor it it even come into a 1/100 of what DVD or 5.1 sound has.

    From what I have seen, most CIs just don’t respect it, I’m glad that you do, but 90% of what I have seen is people pushing everything else before a Windows-based solution.

    Interesting that you didn’t think HP’s DEC was any good, considering the main supporter of MCE (EI) was basically HP-exclusive for a long time.

    The consumer market is the most important for Media Center, and Extenders are key to it ever working out. If ~$150 Extenders can’t be done, Media Center is doomed to fail.

    Microsoft can drive into CI as much as they want, but it will not make Media Center more popular or installable for the consumer market.

  25. chrisl: I’m curious as to why you so admimantly believe that MC won’t/can’t make it in the CI market? What – Crestron isn’t a big enough force within the CEDIA channel to make MC respected? Granted, there are plenty of installers that laugh at MC and have no respect for it. Frankly, they are idiots. There were also many high-end two channel dealers that laughed at the concept of home theater and looked at what happened to them.

    Think of CEDIA as a test bed for the future of MC. Obviously MC didn’t work the first time around as a software rider on millions upon millions of PCs because there was no marketing, PR or any other real form of advertisment behind it. The majority of people that had MC didn’t even know what it was or how to use it.

    I can attest to the fact that Msft is dedicated to making this work this time and are actually going about it the right way this time. Starting from the top (CEDIA installers) down (consumers).

    HP as with all of the other MC sytem builders didn’t make it because they started at the bottom and tried to work their way up. It’s always easier to go down market than it is to go up.

  26. CoastalHome: I just don’t see enough CIs that respect and want to be involved with Media Center, or mainly any product made by Microsoft. I’m not saying Media Center shouldn’t or couldn’t be loved by CIs like Crestron, AMX, etc but I just don’t see that most are interested at this time and I don’t think it should be the main market Microsoft should focus on.

    Clearly, I’m not in the market, so your opinion likely carries more than mine. Some great things have happened over the past two years in pushing Media Center to CIs. Julie and the rest at CE Pro have given it a huge push, but from the outside it just doesn’t seem like it has moved much yet. This could just be a lack online presence for those who have adopted it.

    I still just really don’t see that starting with CIs is going to help Media Center filter down to consumers.

  27. There are so many technologies, platforms, etc. that have started in the CI channel and filtered down to the consumer level it’s almost hard to believe. DVD, 5.1, plasma, home control, structured wiring, etc., etc. ad naseum.

    CI’s are starting to come around, but it’s going to take a long time.

    Instead of taking such a morose view of Msft’s current strategy you should jump on my bandwagon of trying to talk Msft/eHome into loosing MC into the wild. Make it an OEM GUI that can reside inside receviers, TVs, DVD players, etc. THAT’S how you conquer the consumer market. I love Vista, but the Vista OS is what get’s in the way of MC being all that it really can be.

  28. I’m not sure I completely understand your Media Center into the wild.

    Pika, the v2 Extender platform is just this. The point is that OEMs can add Extender functionality to any number of devices, AVRs, HDTVs, DVD Players, etc. I strongly suggest the concept, but not at the 2x premium that these first Extenders are launching at.

    Is there something else, behinds Pika that you are suggesting or are they one in the same?

  29. Our primary purpose is watching any shows we record anywhere in the house.

    I rent movies and rip them with DVD-WMV. No menus and no “skipping” but we get to watch the movies we paid to rent where ever and whenever in our house.

    As a hard-core hobbyist here in Canada, I can deal with this MSRP of 300ish. Over the years, I paid about 300CDN on average per MCX (and that was before going to par with the USD so the avg USD value would be between 200 and 300).

    Canada has fallen so far behind the US in open cable box standards and HDTV. Also, we don’t have OTA HD so all HD has to come through cable/satellite company’s DCTs. Since there is only a few channels that are HD we primarily watch everything in SD.

    Shaw Cable Canada charges over 700!!!! for their dual tuner Motorolla HD PVR (I think they now have an SD PVR for about 500). And these things are not networkable and have small hard drives.

    What will continue to prevent me from entering the Vista/MCXv2 market at this price-point is Canada’s non-competitive cable industry. Until I can plug a Shaw Cable or Bell ExpressVU Satellite CableCard into my MCE and watch 90%+ HD shows on my MCX I see no point. It would be like buying a Corvette and leaving the Valet key in the ignition 😀

  30. Why can’t I have a small silent PnP wired extender the size of a couple of CD boxes that I can tuck away out of view. I’m willing to forgo the DVD streaming – I just want to have a simple hardwired Pika box that provides (the full) Vista MCE functionality on my TV. As the preceeding extender v1 technology didn’t last longer than a disposable nappy, I’d be loath to spend more than $150 on any v2 box. But at such a price (and even with some of the ‘shoot-yourself-in-the-foot’ self-imposed functionality flaws) I’d run out and buy a couple straight away.

  31. I thought I’d chime in with a few thoughts from our (MS) point of view. (I’m Joe Belfiore– the guy who runs the Media Center/Extender team at MS and who did the Digital Life keynote.)

    First, know that we are hearing you. Like you, we are enthusiasts ourselves about the promise of having all our media available in every room, with support for ALL OF THE CONTENT to work right, the system to have a nice UI, be available at low prices and through devices that don’t make a lot of fan noise or have other issues.

    we have chosen a model where we try to make all of this happen through both some 1st party devices (Xbox) but also through 3rd parties. Frankly, we think the “lock-in” model where you must choose devices from just one vendor is too limiting for the broadest market, but at the same time there are challenges in getting a lot of different companies to work effectively together.

    On the price of V2 extenders….

    The prices of these devices is “designed” to be cheaper. historically, the extender program was:
    V1. highly proprietary hw + software to prove the concept and see how well it could work.
    V2. embed the software in a POWERFUL first-party box and make sure it’s easy to setup, works well (HD!) and get high volume.
    V3. (today) a software kit that runs on INEXPENSIVE hardware and can be adapted to any device

    You all are seeing just the very first devices implementing part 3. The companies who have done this work are making marketing/pricing decisions that you clearly aren’t too fond of, but in my view are at least rational. (A totally fair thing to debate!) Their view is:

    – they need to build a device that a WIDE AUDIENCE (that’s not you…) could install and make work reasonably, else their returns will be too high. To that end, they are putting 802.11N hardware (dual band) in the device. This is probably the biggest cost adder.
    – for the near term, there are a bunch of enthusiasts who are more likely to pay a higher price because there is already some demand for devices like this. Since these companies have spent a bunch of money doing this engineering, they want to recoup that cost and the early adopters will help them do it.

    The GOOD NEWs is that the software we’ve built can run on very inexpensive hardware, has a VERY LOW license cost (and I mean VERY low) and is available to lots of companies… so if there’s some modest success in the category (not clear at this point in time … home networking is still pretty tough) then more companies will enter, we’ll see more competition, wider range of devices, and prices dropping.

    I think the best thing you can do here is let the hardware manufacturers know what you want. Someone said “give us a non-wireless device that’s even cheaper– we have ethernet in our homes!” — it’s a perfectly valid device idea, and you’d be correct that it’d cost less … but the problem is that some hardware company has to believe there’s a market big enough to warrant making that investment. At some point, someone will … just not clear when or who. As much as you’d like us (MS) to be able to influence all these folks to build wide range of devices and to set their prices, really it’s their business and their investment and they absolutely make this decision based on what they think the market will support. We were hoping to have some different device types — a DVD player, a TV set, a DMA — for launch, and we did manage to at least hit that bar.

    On codec support for Xbox 360 …

    Unfortunately I can’t comment on any specific product plans around the Xbox 360, but I will make a principled statement that our top priority is to try to deliver the solutions that end-users want and will benefit from the most. The hardware chips in the 3rd party Extender devices have “native” support for a pretty wide range of codecs, and the Xbox360 is older hardware that requires software codecs in most cases. There’s the physics of work and time involved.

    On the general point of how long it’s taking us to get this whole thing to exist, work well, and be cheap…

    I agree there’s a lot of work still to do (across the board) — but then again the TV industry has had about 60 years to evolve to this point and we’re trying to catch up to and influence the business models, content flow, and technology in a relatively short period of time.

    We have tried to release software *quickly* — something new that matters every year– and we plan to keep that going. I hear you “not fast enough!” 🙂

    The best feedback we can get from you really is:
    1) what features are MOST important to you (and that’s coming through pretty clear)
    2) do you think we are picking the wrong strategy? Or if you think this is a good approach, we’d love ideas for how to make the market go a little faster.

    Hope I don’t sound defensive here, but i think some of these effects are really the near-term downside and risk of working on an open platform.


  32. Forgot to add this point.

    Our team is really aiming to try to enable the BROADEST set of consumers to be able to get a great media/entertainment experience in any room of their house. So, when Chris says “ehome is targeting mainstream consumers”, he is right.

    That said, it’s also the case that the high-end installer channel is important to us and we have started spending a lot more energy there.

    Reasons to target the CEDIA channel:
    – one of the hardest things about this whole endeavor is that setting up a home network is still hard, and understanding what pieces you need is still hard. A custom home installer will do that work for you.

    – OEMs like Niveus and EI are *completly focused* on making the whole-home media scenario work, where OEMs like HP and Dell are doing many many things. the smaller companies in some ways push the technology more effectively than the bigger ones. In some cases they create learnings that the bigger ones can’t/don’t. (eg., they are satisfied with products that ship in smaller volumes, etc.)

    – what’s happening in the CEDIA channel moves towards the mainstream over time. One good example is new home builders selling “Media Center packages” as part of a brand-new home … ethernet in the walls, plasmas on the walls, Xboxes, MCEs, extenders, all set up for you and built into your mortgage.

    Until Windows Vista with CableCard, we didn’t think we had a truly viable product for the high-end home — no HD, not viable. But now we are seeing the more cutting edge folks get enthused about what we can enable.

    So, we think it makes sense to help out in that channel and make sure that they have products that make sense for them. We think ultimately it will speed up the technology “trickle down”.


  33. You know, I’m a huge fan of the MCE platform. I’ve been using it with Xbox 360 extenders for a while now, and for SD content I really like it as a solution for unified media access across multiple rooms.

    Unfortunately, the lack of real HD support is just killing the platform. OTA HD is fine, but it isn’t enough to make a useful HD platform. CableCard support is a great step forward (though its deployment has been absurdly slow), but this is still not a complete solution for the HD using market. I personally use DirecTV, now with wonderful new HD channels, which means that I can’t use MCE for HD at all.

    This promised DirecTV tuner card would certainly go a long way to solving this issue, but at this point the promise is starting to ring hollow. We’re coming up on almost 2 years since it was announced, with absolutely NO offical updates from Microsoft about when we can actually expect it. Is there some reason we can’t get some actual information about this? Is there some reason that MCE boxes can’t just take standard component inputs and control a set top box via IR like on every other platform?

    With DirecTV’s new HD channels, Microsoft is now in a position to lose a lot of its adopters so far if it can’t come out with a viable solution (or at least some information so that we can justify waiting). Once users like me are forced to buy HR20s to replace our MCE boxes, it will be too late. Everyone I know with an HDTV and everyone I see in any number of forums is in the same situation.

  34. Thanks for the insights Joe, they were very informative!

    As frustrated as a lot of us are with the slow moving MCE solution and, from what i’ve read, unreliable cablecard implementations, the state of MCE really needs to judged relative to competing solutions. I think its clear the biggest competition for MCE is Apple because if they figure out how to get HD Tivo functionality on their platform (which, imo, doesn’t including buying stuff on iTunes), MCE will be in big trouble.

    I recognize the need to support and promote partners in this space but imo MS needs to step up and take ownership of an end to end hardware solution. The allure of the apple platform is that you just plug the stuff in and it works. Yeah I know it sounds trite but now that DVR functionality is commonplace, our families expect reliable operation of these devices. The velocity micro discussion on AVS is a total nightmare for would be and current cablecard adopters. Theres tons of hardware and software issues on the platform right now and the last thing any of us wants is the call from our wives (or husbands!) at work saying how the “xbox is saying it cant find the extender” or “when i play the show its a blank screen”.

    What we need for mainstream adoption is for MS to step up and offer an appliance-like media center that is tested like crazy with the hardware that comes in it, has minimal configuration options, and just WORKS, is quiet, and reliable. Without that, the support and frustration that seems to exist with current solutions is going make MCE a non-viable product for PC partners.

    There can still be alternatives from your partners, but i think there needs to be some product leadership for the mainstream user. The pieces are almost all there, they just need to be tied together better, and soon.

  35. Joe – You guys really need to get on the ball and start releasing more info about your work with DirecTV. The are LOTS of customers who are waiting on this solution, but nothing has been said since CES ’06. That’s way too long to go without any update. If you don’t believe me, check out the Ask Jessica forum on The Green Button.

  36. I would like to correct your statement about the DSM-520 UI — “I’d also like to note that D-Link has their DSM-520, and while it is not a Media Center Extender it does support the exact same formats (DVR-MS, MPEG-2, WMV9, MPEG-4 ASP, MPEG-4 AVC) and can be purchased for $150 to $180 at major US retailers. While the UI sucks, you are basically paying double the price for a true Media Center Extender that gives you access to the nice UI” — In fact the active-TV technology update from D-Link enables the DSM-520 to support the same MCE UI. Please see http://active-tv.blogspot.com/2007/09/arrival-of-more-boxes-supporting.html In fact the DSM-520 has no UI disadvantage.

  37. Daniel: Sounds like you are trying to say the box support HTML formatted MCE applications and therefore has no disadvantages over a true Media Center Extender?

    So, it doesn’t support the Vista UI that I’m taking about. It might support old HTML Online Spotlight applications, but that’s not the devices main UI. They are simpley add on applications delivered over the web.

    I’m taking about the Vista Media Center UI, which those boxes do not support in any fashion. So yes, the DSM-520 has significant UI disadvantages in my mind.

  38. A comment on MS strategy…

    I would buy MCE or an MCE box if I could get non-OTA HD. While I can use the Homerun device, I would hate to dump a grand getting something together only to see a price drop in CableCard machines. So, I am waiting for a CableCard machine price drop, until then I’ll live without easy recording, as I have done the last 10 years, listen to music on my IPOD or hook it up to my receiver and stick a disk into a DVD player.

    I think with lower price hardware (CableCard), or solid QAM support, MCE would be the platform to beat. Until then, I’ll spend my money elsewhere…

  39. I understand the CI market and driving some of the adoption. But I think you are missing a BIG piece of that puzzle.

    Lets take home automation as a benchmark, starts off with CI, moves to hobbyist/DIY, then down to Lowes. It is in transition to Lowes now with ZWave and other devices showing up on store shelves.

    What you are missing? You already have the hobbyist, the neighbor that has this great technology running his entertainment system. He is the neighbor likely in the same income category and not in the scale of classification reserved for the CI market. Things move within an income class quickly, but they are much slower in transferring across the railroad tracks.

    Right now, your hobbyists are not happy.

  40. Joe,

    I am glad you are reading these posts and concerns. I to have been waiting forever for a DirecTV announcement. I think that the restrictions on CableCard are a bit too tight, although I dont know what you can do about them. I want to build my own system, I dont wan’t to pay for some overpriced hardware.

    Also mentioned is Codec support. It doens’t have to suck, but at present, half of what I download just will not work. It is a codec, not magic.

    Personally, I think look at MCE, and MS’s current situation in general, the company’s focus should shift to simply enabling people to use their computers and be happy. Let people do what they want to do without silly restrictions. Dont shove formats down my neck, if you want to get me to use something, make it better and the easiest to use and trust me – I WILL. I feel like I hit constant road blocks using MCE.

    I love the concept, I love the UI, but I am in the middle of a remodel, wired everthing for MCE – but to get the systems and the functionality I want I have to find a “Professional Installer” to get me product at at least twice the price. I can freaking make an MCE application yet have to pay some twit money to get the gear. I am speaking from a complete system, security, home automation, etc. Enable people to cut middlemen out, why not? I have put together a simple INSTEON based system with ease, but I had to add some of the glue myself. Anyway..

    Other things, Stream DVDs I am sick of fumbling with discs. Release Softsled it can’t be that hard. UMPC + Softsled – great touch interface for mediacenter content, love to use one as a sweet remote.

    How about this, you come up with something! Seriously, half of the things, heck all of the things mentioned here should not even need to be said. They are simple, obvious needs to anyone who has tried to enjoy the product. MS seems to have all the power and pull any company could ever have yet companies like Apple are bringing products to market that amaze and steal peoples attention. Why?

    MS of late has been nothing but a sad story, Vista isnt even a glimmer of what it was supposed to be, Zune was a flop, Wii is beating Xbox (granted that is a fluke), ahh!! You know, for having one of the coolest development technologies (.Net/VS) a lot of crap is coming out of Redmond for some reason.

    I want MS to amaze me again, every time I use my iPhone I am amzed by good UI and good design, I tossed my 700w in a lake after halving the iPhone for 3 days – that is how good the design is. WM 5.0 vs iPhone 1.0 – that just shoudn’t be.

    Is anyone listening? Does MS care?

  41. Joe,

    Every now and them a new user asks in the forums if they can watch TV from another Vista computer. Some call it softsled, some call it another names.

    Every now and them users like me complain about after years, not having decent support for standards outside US and constant problems with EPG.

    It’s being a while since the same questions and features are being requested by the communities trough forums and e-mails, and I’am sure MS hears this. I’am sure MS knows that the community whants Softsled like funcionality and that it does make sense. The problem is that MS never delivers.

    In terms of innovation, MS has some very nice ideas. MCE is one example. If it wasn’t for Windows MCE the whole HTPC market would be different. But as a product, MS fails to deliver.

    Amazes me how some other softwares from smaller companies or even open sources can implement some features having only one or two developert, years before MS. Look at MediaPortal and it’s TV Server. Look at WebEPG and TV Web Streaming.

    What drove me away from MCE (I’am not longer using it as my MC solution, just on my test machine) is that I always feel limited with it. For a software thats in its 4th generation, not having some basic features like external EPG import, broader TV Support and PC based extender funcionality is too much.

    BTW: As for the extender. If price it’s bad in the US imagine outside when they might not even be sold. In Brazil, a xbox360 costs $1500. How about that for an “Extender”? I could buy 2 computers with monitors for that price and use it as extenders. Oh no, wait, MS doesn’t allow me to do that. 😉

  42. Joe,

    I am also glad you are reading these posts. I just built a new home and spent $15,000 on wiring and $3,500 on a top end MCE solution, the Sony Vaio VGX-XL3, against the recommendations of the custom installer who was proposing an Apple Solution.

    I carry the following Microsoft certification titles: MCSE, MCSD.NET MCSD, MCAD and have been a Microsoft Certified trainer since 1996. My belief was that I wanted a full home HD media and home automation solution that was compatible with my existing Microsoft network.

    Here are the major problems I have in trying to achieve these goals that SHOULD BE quite simple to overcome:

    1) I cannot record and play at the same time because only 1 tuner was shipped with my box. Ordering a 2nd tuner is not allowed because apparently, since I am not a custom installer with years of Apple experience, I don’t know how to install the tuner.
    2) I cannot stream from my MCE to the bedrooms using a non XBOX solution, as was advertised on the Microsoft site, because there is no extender available. I cannot have a loud fan in the bedrooms, and I have an 11 year old that would love an XBOX, but does not need any more educational distractions.
    3) I have not setup the home automation completely because I’m not sure I will ever get an adequate solution from MCE. I also suspect the software I was using may have been interfering with my Cablecard which keeps getting lost, especially on reboot, with a No Tuner Found message.

    I have a friend who is President and CEO of an OEM electronics company. I’m not sure if he is involved with the MCE or Apple solutions, he’s always tight-lipped about insider information. When I described the problem to him he was able to complete my sentences. He made the following observations; one, who ever can make this simple and cheap will make and own this market, two, the price-point for a full home HD media and automation solution, excluding network, needs to be in the $5K range in order to achieve wide market appeal.

    Based on this, I would make the following recommendations to you:
    1) Make the market. Would you rather risk a few million making this work now, or lose many more millions in existing investment because Apple ends up owning the market. Remember, they MADE the iPod market because they made the investment before they got the return.
    2) Borrow resources from Microsoft’s Zero-Administration initiatives to help make this easy to setup and maintain. Make it plug-and-play and easier than the rest. There will be plenty of work for the custom installers just as there are still jobs for system administrators and network administrators in the corporate world after zero-administration. Please listen to, not pander to, the custom installers.
    3) Use Microsoft’s usability labs for setup and maintenance, not just user experience.
    4) Solve the cable card issue. I should be able to plug an inexpensive box into a USB port that has support for 4 Cablecards.
    5) Solve the extender issue. If you want to sell MCE boxes, and have Windows embedded in the whole home, it needs to be as easy as plugging a telephone into a wall socket.
    6) Figure out how to target a full home solution into a package for $5,000. Best Buy supposedly has one for $15k. I almost got this. It would have been a no-brainer if it was $5,000.

  43. Joe,

    Based on the *assumption* that there are more XBOX 360s connected to TVs at the moment than there are MCE HTPCs, I have to say I *do* think it’s the wrong strategy.

    If it was my call, the product I would be trying to release yesterday would be a headless media center server pitched at current XBOX 360 owners.

    This device would contain the bare minimum hardware and software required to run Vista Media Center (and I’m talking a unique Windows version here, or at least a thoroughly stripped Home Premium). It shouldn’t be configurable, and there should never be a need to remote in to it. For the rest of this post I’ll refer to such a device as the XMEDIA.

    The XMEDIA would have a thermal properties such that it could be positioned in a unventilated cupboard without causing overheating.

    The XMEDIA would be visually styled to match the XBOX 360. (I would hope better that the HD-DVD drive)

    The XMEDIA would not necessarily include any wireless networking by default, with the expectation that it could be networked with an XBOX 360 via just a non-cross-over CAT5 cable.

    The XMEDIA would include a single HDTV tuner.

    The XMEDIA would include adequate storage for a DVR appliance.

    The XMEDIA would be *externally* upgradeable. If users want more storage, they just plug it in. More tuners? Plug them in. No opening of cases, no driver installation.

    The XMEDIA would be as feature rich (storage/extensibility ports/slots/wireless) as possible, while still matching or under-cutting the Apple TV price point.

    The XMEDIA could much more easily be pitched against Apple TV, with a far superior feature set.

    I could go on, however I think this sketches an adequate idea of what the XMEDIA device would be.

    But, having outlined the above, what advantages does it offer?

    Well, from my perspective at least, it’s an easier sale to the consumer. They’re not buying a ‘computer’, they’re extending the functionality of a device they already have.

    It could leverage the market awareness of the Apple TV.

    There’s no maintenance/installation/drivers, and there’s no software conflicts because it’s a closed system.

    You could buy one for your Dad/Sister/Aunt/Friend and know that you won’t have to support it.

    Its benefits are discoverable. Rather that the whole media-server-in-the-den mess of a market communication concept, you just provide the functionality that people are looking for in a package that they expect to find it in. The media will help them discover that it could be put in the den/garage/under the stairs, and that it could be extended to other XBOX 360s or extender devices.

    It’ll be cheap, relatively speaking. The XBOX 360 is doing a large chunk of the grunt work (decoding, rendering), while the device is really just managing I/O (with the possible notable exception of encoding (if analogue recording is required (transcoding could be handled asynchronously on the 360 – it’s got more than enough grunt)).

    Basically, the scenario is this right now: You buy a cheap Media Center (AU $1400) and you end up with an ugly, noisy box in your living room with all the accompanying maintenance issues, and require a pet techie to keep it all going for you.

    If Microsoft built the XMEDIA, XBOX 360 owners would get the same functionality for a fraction of the cost (AU $450 approx). It’d be less ugly, or at least ugly in a more acceptable way, and it’d be just as noisy, but you’d blame the XBOX 360 rather than the XMEDIA for that.

    So, an XBOX 360 + an XMEDIA would end up costing about the same as a cheap media center, BUT the cost over time would be less (no maintenance, no incompatibility, fixed ecology), it’s an easier sale, and you’d be fulfilling a genuine consumer desire rather than trying to create what is fundamentally a difficult to communicate/educate market.

    But… wasn’t this thread about V2 extenders? Yeah, it was. But it also became about Microsoft’s strategy when you (Joe) asked for feedback as to whether you’d got the strategy wrong.

    And, I guess, what it fundamentally comes down to is that for the extender strategy to work, people have to *experienced* something that they want to *extend* in the first place.

    If you built the XMEDIA, you’d have a much better chance that people will encounter an experience they value enough to want to extend, and its packaged in such a way that it doesn’t take a CS major to explain how it would benefit them in the first place.


    PS. While I understand that you want to foster a third party hardware ecology for MCE, and that that’s part of the reason for your current extender strategy, I can’t help but feel you’re going the wrong way about it. Build the above device, market successfully, and you won’t need to invest the amazing resources you do at the moment convincing third parties to create compatible hardware. Third parties will happily note your success, recognize the market, and undercut you on price/features/performance. Which is what you want in the end, isn’t it? They’ll end up making the hardware, and you’ll get your clip on the underlying software.

  44. Everyone I know would like to replace their cable DVR’s with “something else” and really likes Media Center but…

    Won’t do this unless the replacement works as easily as my cable company dvr (well IJW most of the time)

    Want’s HD provided via a mechanism other than by the convoluted cable card fiasco

    Feels burned by the V1 obsolescence. I owned mine less than a year before finding out I was screwed. This is borderline business behavior that doesn’t win fans or more importantly repeat customers.

    Aren’t interested in ripping off Hollywood.
    We all either pay a pretty penny for the programming or it’s free OTA. Surprise, surprise, 99% of us aren’t going to record the shows we pay for and resell them to our neighbors. Honest people don’t like being treated like crooks.

    The price point must be much less than what I paid for my buggy V1 Linksys Extender.
    At this point I really don’t want to use anyones product in particular – just one that works! Either case after V1 it will be a very hard sell for me to spend $200 on V2

  45. do the v2 extenders have better video quality than the xbox 360… my dvr-ms files do NOT look near as good from 360 as from a htpc

  46. Joe, my only question is why no Softsled? While the mainstream may have no use for this us hobbyists have been wanting this for a long, long time. Even if you sold this for $100 or even $200 many, if not all, of us would buy it. We could make our own extenders. I’m guessing many of us are tech people and probably have extra PC parts or whole PCs lying around that we would love to give a purpose to. Can you please address this? This has got to be one of the top requests from the community.

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