Entelligence: Beware of geeks bearing gifts
By Michael Gartenberg 
posted Apr 27th 2009 4:42PM
posted Apr 27th 2009 4:42PM
Today we reintroduce Entelligence as a new column by technology strategist and author Michael Gartenberg, a man whose desire for a delicious cup of coffee and a quality New York bagel is dwarfed only by his passion for tech. In these articles, he'll explore where our industry is and where it's going -- on both micro and macro levels -- with the unique wit and insight only he can provide.
Here's a riddle. Why was a $300 PC with a Pentium III CPU, an 8GB hard drive, 64MB of RAM, 10/100 Ethernet, a DVD player, and an NVIDIA graphics chip considered a killer PC system in late 2001? The answer is because it wasn't a PC -- it was the original Xbox. In recent years, Microsoft has evolved the Xbox quite a bit. No longer is it a PC system with N-1 technology -- it is now a targeted and focused piece of engineering that is state of the art and optimized for games -- but importantly, a lot more than games. It's the Xbox that will likely be Microsoft's beachfront into the digital home, and it will be the Xbox which furthers Microsoft's role in the digital home beyond the PC.
In order to understand the Xbox and what it means to Microsoft, it's important to take a quick look at where Microsoft stands in the home. While Microsoft is the dominant player in the world of desktop computing for business users and home users, the home market beyond the PC has remained elusive to them. Despite several attempts, Microsoft has had poor success attempting to jumpstart the home market using the software licensing models that have served it so well in the PC arena. In the handheld market, Windows Mobile is only now beginning to make some inroads against competitors (but that's a story for another column), and older efforts such as WebTV and Sega's Windows CE-based Dreamcast system failed miserably in creating a Microsoft presence in the family room. I won't even begin to talk about music and how the iPod has fared against the Zune's efforts. The result is that Microsoft has learned that trying to sell operating software to third party OEM licensees in the consumer electronics space is a very different world than the world of PC operating systems.
Microsoft has realized that if it wants to further software initiatives in the home, it would need to reluctantly become its own hardware OEM and create the market for the hardware necessary to sell software. As a common folk saying goes, when all you have is a hammer, the whole world looks like a nail; and of course that's why the Xbox originally resembled nothing more than a low end PC with souped up graphics. In this regard it is important to note that while the Xbox is a hardware platform, it is really a software play for Microsoft. In fact, Microsoft has adopted the traditional video game business model, where it publishes all titles for the platform and charges third parties a fee on each disc that they ship for the system.
But the Xbox 360 is more than a videogame console. With links to broadband via its built-in Ethernet, wireless support, Windows Media connect and Media Center Extender and large storage capabilities, the Xbox is now finally poised as a Trojan horse ready to invade the living rooms of Windows users everywhere and leverage and deliver content directly through the console (through partners such as Netflix) as well as leverage the relationship to the PC as a media hub. Over time it's likely we'll even start to see integration to other initiatives such as Zune and Windows Mobile as well as other software services that Microsoft will happily charge for. While Windows 7 doesn't offer that much in terms of ability to act as a media hub over Vista, that part of Vista was so overlooked that there's an opportunity for Microsoft to make the the most of those features in Windows 7 as brand new and innovative. The combination of a combined marketing effort of Windows 7 and the Xbox would be a powerful way for Microsoft to stand apart from competitors such as Apple and Sony and help finally drive consumer adoption of converged usage models.
Before this can happen as mainstream activity, however, the Trojan horse has to actually get in the door. That's why we're going to see a major push this Spring into the holiday season to further drive Xbox adoption as well as a strong push for Windows 7 once it's released as the media hub for the digital home.
The Xbox has been a brave new world for Microsoft. With emphasis now on secondary functions beyond gaming and formidable competition, Microsoft is going to face a tough battle in this space. If, however, Microsoft can achieve a strong Xbox holiday season, that will begin to pave the way for the company to move more consumers on to additional services for the system, and drive console use well beyond core videogame functions and further towards becoming a critical spoke in the digital home.
Families looking at an Xbox vs. devices such as the Wii might not focus on these enhancements on their own, and it's going to be key that Microsoft evangelize these additional functions simply and carefully. For many consumers, the game console is still first and foremost about games -- something Microsoft is hoping the Xbox will finally change.
Michael Gartenberg is vice president of strategy and analysis at Interpret, LLC. His weblog can be found at gartenblog.net. Contact him at gartenberg AT gmail DOT com. Views expressed here are his own.
In order to understand the Xbox and what it means to Microsoft, it's important to take a quick look at where Microsoft stands in the home. While Microsoft is the dominant player in the world of desktop computing for business users and home users, the home market beyond the PC has remained elusive to them. Despite several attempts, Microsoft has had poor success attempting to jumpstart the home market using the software licensing models that have served it so well in the PC arena. In the handheld market, Windows Mobile is only now beginning to make some inroads against competitors (but that's a story for another column), and older efforts such as WebTV and Sega's Windows CE-based Dreamcast system failed miserably in creating a Microsoft presence in the family room. I won't even begin to talk about music and how the iPod has fared against the Zune's efforts. The result is that Microsoft has learned that trying to sell operating software to third party OEM licensees in the consumer electronics space is a very different world than the world of PC operating systems.
Microsoft has realized that if it wants to further software initiatives in the home, it would need to reluctantly become its own hardware OEM and create the market for the hardware necessary to sell software. As a common folk saying goes, when all you have is a hammer, the whole world looks like a nail; and of course that's why the Xbox originally resembled nothing more than a low end PC with souped up graphics. In this regard it is important to note that while the Xbox is a hardware platform, it is really a software play for Microsoft. In fact, Microsoft has adopted the traditional video game business model, where it publishes all titles for the platform and charges third parties a fee on each disc that they ship for the system.
"The Xbox is now finally poised as a Trojan horse ready to invade the living rooms of Windows users everywhere." |
But the Xbox 360 is more than a videogame console. With links to broadband via its built-in Ethernet, wireless support, Windows Media connect and Media Center Extender and large storage capabilities, the Xbox is now finally poised as a Trojan horse ready to invade the living rooms of Windows users everywhere and leverage and deliver content directly through the console (through partners such as Netflix) as well as leverage the relationship to the PC as a media hub. Over time it's likely we'll even start to see integration to other initiatives such as Zune and Windows Mobile as well as other software services that Microsoft will happily charge for. While Windows 7 doesn't offer that much in terms of ability to act as a media hub over Vista, that part of Vista was so overlooked that there's an opportunity for Microsoft to make the the most of those features in Windows 7 as brand new and innovative. The combination of a combined marketing effort of Windows 7 and the Xbox would be a powerful way for Microsoft to stand apart from competitors such as Apple and Sony and help finally drive consumer adoption of converged usage models.
Before this can happen as mainstream activity, however, the Trojan horse has to actually get in the door. That's why we're going to see a major push this Spring into the holiday season to further drive Xbox adoption as well as a strong push for Windows 7 once it's released as the media hub for the digital home.
The Xbox has been a brave new world for Microsoft. With emphasis now on secondary functions beyond gaming and formidable competition, Microsoft is going to face a tough battle in this space. If, however, Microsoft can achieve a strong Xbox holiday season, that will begin to pave the way for the company to move more consumers on to additional services for the system, and drive console use well beyond core videogame functions and further towards becoming a critical spoke in the digital home.
Families looking at an Xbox vs. devices such as the Wii might not focus on these enhancements on their own, and it's going to be key that Microsoft evangelize these additional functions simply and carefully. For many consumers, the game console is still first and foremost about games -- something Microsoft is hoping the Xbox will finally change.
Michael Gartenberg is vice president of strategy and analysis at Interpret, LLC. His weblog can be found at gartenblog.net. Contact him at gartenberg AT gmail DOT com. Views expressed here are his own.
Good editorial.
This much information on the crappiest console this gen. Is this guy fucking high?
"a lot more than games" ye is that why the put a DVD slot into it and not a HDDVD or Blu Ray? and they 'engineered' the xbox since when? i thought it just happened and before they tested it they just released it, hence the failure rates and then it took them 3 years to realise how the hell to fix the failure rate of there own technology.
"-- something Microsoft is hoping the Xbox will finally change."
This is exactly what they made the xbox for though? wouldn't things like media center and those slightly modified OS's for the Hp Touchsmart and those Sony touch computers be for getting into homes/living rooms etc.
and i just realised:
"the game console is still first and foremost about games"
WTF does that even mean?
Dude, if you want to theorize i suggest you write columns on politics not on 'game consoles' because with the shit you write you'll get trumped by a ten year old kid.
/not a good editorial.
Microsoft have taken 50% of the reason to own a PC and spun it off into a loss making division. The unintended consequence of the Xbox is that we have all the big PC game franchises in our living room, which makes using a Netbook or a Mac for your every day computing much more attractive.
All Microsoft have left to drive profit is Office.
I've had my 360 for about 10 months now. I was working on a spec campaign for the company working for the 360's advertising. One of the things that I've noticed about the xbox is that it has the worst of both worlds:
1) Video quality. HD-DVD has flopped, and there's no blu-ray drive on the horizon for the 360. This isn't much of a concern for me, as I'm still watching everything in standard definition. But if you're going to buy a HD TV, and you want a video player to go with it ... are you going to get PS3 with Blu Ray, or the XBox with ... DVD? And if you want games that take advantage of your HD TV? It shouldn't be a contest. PS3 Wins.
Don't even get me started on downloaded video content on the XBox. While it would be great to actually own the content on my hard drive, it's a facade. I can't put it on my iPod nor can I can't back it up to DVD. That's not my content. That's just content Microsoft allows me to view without being hooked up to the internet. By the way, you need Xbox Gold to even access that content.
The only thing the XBox has going for it is Netflix. A streaming library? Hells yeah. I'll pay up for that, and I am paying up for that. It'd be even better if Netflix didn't rotate their content, and just kept adding it. But you know what? There are Blu-Ray Players that are Netflix-compatible. So is just about any modern PC running Windows and OS X
2) Game quality. When comparing the three consoles, the Wii, hands down, has the better library. I know people are going to razz me for saying that, but has anybody seen an octogenarian blowing away people in Bioshock, FEAR, or Half-Life? Didn't think so. If you have a family, and you want a console that will keep everybody in the family happy, you're going to pick up the Wii.
My girlfriend has been pining for a Wii quite a while, and you know what? At the next generation of gaming, I'm probably going to go with whatever Nintendo has to offer because they focus on gaming.
The XBox nickle and dimes you for just about everything it can. Want to do anything over the internet with your xbox? Buy a gold subscription. Want wireless? They have an overpriced wireless network adapter for you. Crap, need more hard drive space? We have a ridiculously overpriced hard drive for you.
Microsoft: Always ready to disappoint.
"the game console is still first and foremost about games"
WTF does that even mean?
Well, it means that "the games console is still (continues) first and foremost (primarily and before all other functions) about games (about games)". Pretty clear to me... but then English is my first language.
If Microsoft offered a combo pack of Windows 7 and a Xbox, I would buy it in a heart beat. And yes, I use a mac running Windows 7 beta right now.
Usually when someone says "And yes..." it's to confirm something the audience would have guessed but I don't see why we would have guessed you were using Windows 7 beta on a Mac.
@ Lucretius: Because most people I know think it's ironic to be running Windows on a Mac. I guess I need to broaden the type of people I know.
That wasn't really what I mean. You said "And yes..." before you dropped the first boot, let alone the other one.
I think you missed the point again. It’s not a question of whether or not it can be considered ironic, it’s that you phrased it in a way that makes it sound like Engadget’s entire audience should somehow have some idea of what system you’re running. You might have wanted to use something like, “It’s funny, because…” or “I know it’s strange, but…” instead of “And yes, …” You just made a very slight mistake, nothing to worry about.
He's basically trying to prove that not all Mac users fit the stereotype...cut him some slack.
Anyways, hopefully you got my original point which was that Microsoft should offer a combo pack.
Next time I post I'll be sure to double check for any errors. :-)
Why would you buy a Mac and then not run OSX? Thats like getting the worst of both worlds...
I think Jordo's grammar is great...
Jordan... keep kicking ass, man!!
You rock!
And yes, I think it is awesome that you use Windows on a Mac...
Thus, I will eat ice cream and smile.
Whilst my 360 has formed my main 'media PC' for a number of years, we in the UK are unable to get a decent movie or TV streaming service. Promises have come and gone, and we are still nowhere near it being the first device you switch on when you want to watch a bit of TV. Perhaps if I bought a MS Media Centre, I could change this, but I do prefer the versatility, stability and low overheads of my linux file server/media server. And I'm still struggling for a decent stable Windows Mobile build that offers decent media streaming out of the box. Perhaps with Windows Mobile 7 we'll get something.
The problem I have with this article is it makes ALOT of assumptions.
The biggest problem with the Xbox as the center of the digital universe is NOT Microsoft.
Its the Media giants who are either too scared or not ready to embrace this new connected digital world.
MS could have an IP TV "Client" ready for both Xbox360 and XP/Vista MCE within a matter of months (they probably already have it now) but the fact of the matter is that companies like Cable Labs were erected to protect the rights of the media companies, even at the downfall of such innovation as watching TV through your Xbox360/Vista computer.
WebTV was ahead of its time as it came out when most people didnt even know what a High Speed internet connection was.
Microsoft has a similar product out now, though not everyone knows about it
If you have ever heard of AT&T's U-Verse system, then your half way there. U-Verse is "Microsoft TV" in its purest form.
And while the author says MS would have to "reluctantly become its own hardware OEM and create the market for the hardware necessary to sell software", that is entirely not true of MS TV. AT&T uses gear from Motorola for the STBs and DVRs and uses 2wire devices for the DSL Modem / Router / Switch / MoCA Gateway at the center of the home network.
And lastly, while the Xbox360 has the built in bonus of being a Vista capable MCE Extender, that still assumes you use a XP/Vista MCE machine in your home for something OTHER than Music/Pictures/Videos. Once again, the media industry has made it very difficult for enthusiasts to build HTPCs that rival the abilities of a free DVR/STB and thus the added bonus of MCE Extender doesnt get you much that Media Connect wont already do with any Windows XP/Vista machine, decent NAS, or any other host of products supporting UPnP. I know of an equal amount of people who use a PS3 for media streaming versus an XB360 for the same job. And aside from the built in HD, you can get a $50 used Xbox (original) and then have your local geek "soft mod" it to run XBMC and have a device that is much cheaper than the 360 or PS3 and yet can still act as a media streamer.
While I would love to see MS blaze these trails into the digital family room like the author implies, I highly doubt we're going to see any progress while the content providers still control the keys to the kingdom.
Casper, great points. I completely agree with you, the media companies are afraid of giving the viewers any power to view the content whenever and wherever they want to. MS does have the power to put out great products, but it seems like they sometimes are incomplete because possibly upsetting the powers that be, aka studios.
I found this article kind of disappointing for two reasons:
1) I think a lot of people realized that Microsoft was really trying to make the 360 an integral part of the home theater system, not just as a gaming system, but as a multimedia device when they first got a look at the 360's media support when it released. Any of those who missed this point got it when they finally introduced the netflix service for the 360.
If this article had been written at the 360's launch, it might have been insightful. However, publishing this article this late in the game just makes the author look slow.
2) What's with the trojan horse metaphor? If, historically, the trojan horse had disgorged a host of merchants and craftsmen into Troy instead of warriors, this metaphor might be a bit more appropriate.
Overall, a step backward from the excellent Palm Pre that engadget put up about a month back.
@Chavez
Are you completely dim?
The Trojan horse metaphor works perfectly fine: the software and media center potential represent the "warriors" so to speak in taking over as your main and pivotal piece of home theater tech. And while sure, the article would have been WAY more insightful a few years ago, that isn't to say he hasn't summed up it's potential and made a great article. Not everyone goes and dreams about everything the XBox MIGHT be able to do the instant they buy it especially seeing as how it had a crap "blade" system to work with.
When I saw the picture and read the title, my first thoughts were "My, thats an awesome Trojan Horse case mod!... oh, wait..."
My thoughts exactly. I was waiting for the punch line to talk about where the optical drive and card reader were located.
It's way better than a case mod: I've literally ridden a roller coaster through that very horse!
(Only people near Wisconsin will understand this post.)
@DarkRail
*HighFive*
You would have to feed him CDs and DVDs in the mouth, that's where the optical drive is.
... is it bad if I've seriously considered in a discussion with several friends to build a giant, wooden Trojan horse and somehow transport it to the Microsoft campus?
"Geeks bearing gifts"
ie Longhorn?
Was this written by Steve Balmer?
It sounds an awful lot like ad copy/ Rah-rah keynote speech drek
let's skip this type of crap in the future
If it was written by Steve Balmer it would involve more underarm sweat and developers.
You nailed it on the head. Michael Gartenberg is notorious as a Microsoft mouthpiece in the industry, first as an analyst for Jupiter Research, now as the same for Interpret, LLC. What he fails to leave out of his bio is the fact that in 2007 - 2008 he worked as an evangelist for the company. It's probably the only period in his career where he was actually being honestly paid to do what he does.
Er, what I meant to say there was, "what he conveniently leaves out of his resume..."
if the Xbox 360 is a trojan horse then I'm ready for the horseless carriage. It is a poorly designed and constructed heap, which amply demonstrates the point that Microsoft, as a software company, cares little about hardware. I would dearly love to use the media streaming, but for the serious noise that this machine belts out. Locking it up does no good, since we all know the story about over-heating. The Wii may lack graphics capability, but at least it is quiet. And no, ripping off the Mii doesn't give Xbox any more credibility.
the RROD reminds everyone its still Microsoft inside the horse
The original Xbox was and still remains today a centerpiece in many homes' digital entertainment center. Can you say XBMC? When and if Team XBMC ports their project to the 360 can you pass this article off as truth.
Actually, I don't know anyone who still has an original xbox.
@carl
i have 3 used all over my house. although my 360 handles most of the heavy lifting, i can easily find a place in my heart for 3 original behemoths.
can't beat xbmc, you just can't
Sadly, this may never come to fruition... Luckily though, we have ports to Win/Linux/Mac, plus with Boxee, and Plex... well, let's just say the 360 devs have a long way to go to compare... I'm guessing that will never happen since the 6+ yr. old xbox/xbmc runs circles around the 360 in terms of HTPC user interface and breadth of features.
microsoft had nothing to do with xbmc though. its a 3rd party hack that happened to use Microsoft's hardware.
The fact that MS had nothing to do with it likely adds to XBMC's overwhelming success. If I were to replace my original Xbox it would likely be with an Apple Tv only because XBMC will run on it.
nice wheels.
you noticed too :)
I'm a late adopter, but the Xbox 360 is great... We use it as almost our exclusive media source for our TV. The games are alright, but the other functions are what it's used for most. Netflix streaming in HD is enough to justify the 150 dollar pricetag.
I have heard the same arguments again and again over the years with each new wave of products/services. The battle for the living room will not be won by the xbox360, it may be the next generation of consoles that come to a market with enough broadband coverage of sufficient bandwidth who are tech savy enough (not that much would be needed) that will really decide the war for the set top box. I think PS3 made an excellent play in this generation with the blue ray though it certainly wasn't decisive. Maybe the Wii got it right by offering minimum of confusing cross media usage which would definitely demonstrate that the market really isn't ready.
i really doubt it was the wii's lack of anything that made it so successful, low price point + novelty = win
there was an engadget post a few days back that showed while the wii was purchased the most, it is now used (near) the least
It's a good editorial on the business of tech and a particular company.
I don't actually see the point of this article, or what it is I should be wary of. Easy home media networks are bad now or something? Or just bad because MS is behind it?
My gripe exactly. I don't see why there were so many negative words in this article. Since when is combining markets a bad idea? Why should Microsoft be criticized for trying to make it easier to stream media?
This may not have been the article's intent, but words just as "trojan horse" and "invade."
Plus, the only service Microsoft charges for right now is Xbox Live. They don't charge for the ability to stream, for Zune software updates (can the same be said about apple?), or for Windows updates.
This article did raise some good points, but it seemed to try and mask them as issues.
never considered xbox as 'killer pc', not even in 2001
Did you read past the first three lines of the article?
64MB of RAM: kills me with laughter...
@StinkyPete
Considering the n64 had 4mb(8mb with expansion)
and the ps2 had : 32mb
gamecube had : 43mb Total
Still a lot compared to other consoles