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Will Microsoft’s Living-Room Quest Finally Pay Off?

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Most of the digerati remain skeptical about Microsoft’s (s MSFT) long journey to becoming a key player in the digital home. I can’t really blame them, given that the sheer number of swings and misses the company has undergone over the past decade may only be second to that of its hometown baseball team.

But recently the company has been swinging a hot bat, not only with its Xbox 360, which has been picking up momentum, but also with a legitimate holiday hit in the Kinect.

A few months of resurgence doesn’t excuse a decade of lost opportunity. But the Kinect, the Xbox 360 and Xbox Live do illustrate that, while Apple and Google are often seen as much more innovative and nimble when it comes to the digital home, Microsoft actually does offer compelling innovations that, every once in a while, it actually executes on.

And execution, of course, is key when it comes to staying relevant.

Source: GigaOM Pro

The above table shows some of the major Microsoft digital home initiatives over the past 15 years. I ranked each on a scale of one to five (one being lowest, five being highest) for both innovation and market execution. As you can see, by my rankings at least, where Microsoft generally falls down is on the execution front.

Case in point is Windows Media Center. At the time of launch (2002), MCE was a fairly forward-looking product, exemplified by the living-room-centric, 10-foot UI, not to mention the very idea of a centralized media hub. And while the product itself has found a dedicated following, Microsoft was never able to make Media Center a must-use technology. Part of this was due to lack of compelling content and confused OEM strategies, but also because the company could never build messaging around MCE to make it exciting to the mass market.

Finally, it needs to be noted that much of Microsoft’s vision for the past decade was flawed: The OS King clung to the outdated notion that the PC was the hub of the digital home universe, despite the fact midway last decade even Microsoft’s closest partners were looking towards a post-PC world.

But Microsoft — with its vast resources — had a few hedges on the PC-centric vision, one of which was the Xbox 360. And now, even the king of the PC has probably realized that its hedge has become the centerpiece strategy, one that it will need to leverage if it intends to remain relevant in the living room.

Will it be able to do so? Time will tell. The huge lead others have in mobile devices will continue to hurt, given that multi-screen is the new future for video, but a 42 million installed base of Xbox 360s — and a new hit interface in Kinect — could rejuvenate the company’s efforts just in time as the real battle for the digital living is joined.

To see my strategies for Microsoft to best leverage its competitive weapons for the living room, see my weekly update.

Image courtesy of flickr user

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8 Responses to “Will Microsoft’s Living-Room Quest Finally Pay Off?”

  1. This is no surprise to me.

    I have aggreed with Microsoft strategy, but like them, missed a pivital point..

    Its not the technology that is the issue, it is the end user and to a large degree, the positioning of the content which leads the end user to change.

    You can lead the hourse to water but cannot make it drink.

    Microsoft has a great water source, but everyone already has a great water source and no real need to change.

    If you look at it this way.
    If Cable and TV went away tomorrow.
    Where would people turn.
    Apple, Boxee, Roku, or Microsoft..
    Firstly, the technorati wouldn;t mention Microsoft as its UNCOOL.
    But in reality, it would be the notable winner in my opinion.
    It has Netflix, best gaming, good price. All you really want. AND it supports OPEN protocols like IDLA.
    Apple, yes a nice sexy box, and great if you buy all Apple. Totally closed otherwise. So, by definition, a 2nd place if not 3rd in a mature market.

    Yes Micorsoft could still screw this up, but really, they cannot but be one of the dominent living room players.
    Apple, could be a dominent living room player OR a second place one. I personally think the greedy busness models forced on media companies will, in the end, make them burn Apple when decent alternatives become available. No one likes being screwed.
    As long as Apple is so dominent, its safe.


    • The interesting thing to me is Microsoft is an afterthought to most when it comes to this market, but they’re actually leading if you consider their box installed base. If they were to do something radical – say start selling 360s for $99 tomorrow – they could entrench themselves as a potential de factor leader from an OTT box perspective.