Entelligence: Beware of geeks bearing gifts
By Michael Gartenberg 
posted April 27th 2009 4:42PM
posted April 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.
I'm a bit surprised by this article. Wasn't the 360 released 3 years ago? Wasn't the original Xbox released 7 years ago? I don't actually know the release dates but my point is that the editorial is not analyzing anything new. Nor is it providing any statistics concerning use of the 360 as a media center. It's all rather pointless isn't it.
It also strikes me as appropriate to have mentioned some of the 360s' notorious weaknesses which is likely to be a hindrance to it becoming a mass market media center. Shall I begin with the fact that the majority of 360s' don't come with in-built wireless, that plenty have low or no hard drive, that the streaming services of Netflix are relatively new and not without issues, the fact that the 360 uses DVD and not the most recent media format (Blu Ray), or should I first mention the excessively high failure rate of the units. It's also far too cumbersome and ugly for many to have alongside their TVs'. And the price cut mentioned hasn't happened yet. Sure $249 AUD for an arcade pack is pretty good, but it's also a rather disabled unit with no wireless, no hard drive and no Live subscription.
From my standpoint I would have thought the PlayStation 3 could be far more easily described as a multi media Trojan horse. I won't list the reasons as I'm sure you know them allready (coughs ** blu ray** divx** coughs).
In any case, Microsoft has shown us that they can make a games system / multi media device which in some regards is as good as the best out there, but that they'll make it expensive, incomplete and unreliable. Way to increase your market share Microsoft.
When the 360 was released, HDDVD/BD didn't exist. What's wrong with you people? How can you expect MS to put in hardware that doesn't exist yet?
Yes, it could have come with WiFi, but MS makes money off these things, and they are a business, trying to, ya know, make money.
The hard drive is small compared to the 1TB monsters we have in our desktops, but it is a mini laptop drive, and years ago, they didn't have hard drives >500gb that were affordable. Would you rather MS put in all this other tech, and pay $300 more for it? No, you'd whinge about that too.
Extremely high failure = not that high failure. Yes there were reports of failures in the past, but those were on the older ones, when was the last time you heard about a new 360 RRoD'ing? I know my 360 is practically silent, doesn't pump out much heat, and hasn't had any problems since I got it.
It's not that cumbersome, it's the size of a STB, and the elite doesn't look bad. Plus you can change the faceplate if you want.
Yes, you could pay a lot more for a PS3, but isn't the point of a gaming console games, and as far as I know, there aren't any on the PS3 :)
@ Kip...
"When the 360 was released, HDDVD/BD didn't exist. "
Yes, and if this discussion was occurring at the point of the 360 release date then you'd have a valid point. But we're now several years down the track and things have changed. My point being that the 360 is no longer using up to date technology, especially in regards to the unit becoming an all in one media center as it simply does not offer Blu Ray movies.
"Would you rather MS put in all this other tech, and pay $300 more for it?"
I wouldn't have paid $300 more for it. I would have bought a PS3 which has all those things included (and more).
"Extremely high failure = not that high failure. Yes there were reports of failures in the past, but those were on the older ones, when was the last time you heard about a new 360 RRoD'ing?"
There really is little point in down playing the whole RRoD fiasco. And now we have the E74 error. Face it, many purchasers of 360 have had failures, few existing or new customers can feel confident that their 360 will last several years. Sony, however, has a much better track record of producing reliable consumer goods (as have most tier 1 manufacturers for that matter). Personally when I buy a unit that costs several hundreds of dollars I'm very concerned as to wether or not it's going to last a long time - and for a console or media center I'd be thinking at 5 to 10 years. PS1 and PS2 never died on me. In fact the only PC that died on me was a badly made piece of crap, somewhat akin to the 360.
"It's not that cumbersome, it's the size of a STB, and the elite doesn't look bad".
Sure, personal taste and all that. But certainly it's not a sleek and slick unit such as the Wii, or alot of the portable PCs you can get nowadays.
Does this make the Red Ring of Death the horse's hemorrhoid?
I'll burn some books to clean up the shelve space!
listen buddy, i have several reservations regarding the xBox, but>>>
1. " optimized for games -- but importantly, a lot more than games"
being in a state of system optimization, for me, means a focus upon a specific task or goal. VIDEO GAMES. ever play video games? video game console
God, what a snore this article is, engadget readers deserve better than this. try harder.
I dont own an xbox but can appreciate the evolution of its firmware. the online community and functionality of the 360 is really amazing when compared to what others offer. I always like that the entire dashboard is at your fingertips in any game so you can play music and talk to friends. (it multi-tasks) Sony is extremely behind in this field, which is a shame because they put together some amazing hardware (minus the lackluster 256Mb Ram). Considering gesture controls will probably be standard in all next gen systems, i cant wait to see how they get integrated as Media Center controls.
Calling the Xbox a trojan horse makes it sound like it has Conficker...
Nice work, I couldn't agree more.
One thing though, you say Windows 7 will be the Media Hub, and it very well might be, but don't count out Windows Home Server. The problem with making a Windows computer your hub is that with everyone moving to laptops today, hubs aren't very useful to your wife when you take them with you on business. A Windows Home Server on the other hand can be a more stable hub and take care of your backups at the same time. I expect to hear some exciting things about the next version of Home Server by CES '10.
Engadget, You seriously are embarrassing yourself with this so-called editorial. It was garbage reading that I can find on any gaming website. This was piss-poor attempt to have highbrow discussion about a video game console.