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Xbox One: a flawed plan, well executed
by Nicholas Lovell on 05/23/13 09:43:00 am   Expert Blogs   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

There is a famous (unfortunately apocryphal) psychological experiment involving ten monkeys, a banana and ice cold water.

Five of the monkeys were placed in a cage with a banana at the top of some steps in a corner. One monkey heads for the banana and gets doused with ice cold water. So do the other monkeys. The next time a monkey goes for the banana, the others, remembering the ice shower, restrain him.

Now one monkey is taken out and a new, naive monkey added. He sees the banana, runs for it, and the other four monkeys stop him forcibly. Gradually every monkey who has experienced the ice cold shower is removed and replaced by one who has not. Eventually, not one of the monkeys in the cage has ever experienced the ice water. A new monkey is added and goes for the banana. He is attacked. No monkey knows why, but “that’s not how we do things around here”.

I fear that senior Microsoft executives are those monkeys, carrying on a strategy while losing sight of why they were trying to do it in the first place.

Why the Xbox even exists

Three years ago, I wrote these words as part of a proposal for a book on why the console era is coming to an end.

“[The Xbox is part of a] grandiose strategy. Microsoft built its dominance through the ubiquity of its operating systems on PCs. Initially with DOS, and subsequently with Windows, the company established itself as the platform for users and developers. Now it is vying to control access to information from the living room. Three pieces of hardware have long been perceived as potential winners in this battle: the PC, the video game console and the satellite/cable set-top box. Microsoft already dominates the PC market. In 1997, it invested $1 billion in a 7.3% stake in Comcast, the US cable company, in an attempt to build a “Windows-based gateway to the television [although it subsequently sold it]. And the Xbox is designed to cover the third potential route to the market, to make sure that whichever of the three pieces of hardware win the battle, Microsoft has a place at the table.”

File:Xbox One Console and Controller.png

Against that background, the Xbox One reveal makes sense. It was all about following that grand strategy of owning the living room. The focus on television ahead of games makes sense if the job of the Xbox One is to own the living room. Yet the strategy that Microsoft seems to be following (TV! Sports! Space!) seems misguided, both tactically and strategically.

Tactically, Microsoft needs to get an installed base fast. To do that, you need a product that solves a need. The problem the Xbox One solves best is a gaming one: “how can I play great games on my 42” screen?” The other problems it solves (“how do I control my television with my voice?”, “how do I stream television content through the same box I play my games on?”) are not problems that consumers know they have, so they are unlikely to rush out to spend several hundred dollars to solve them. The Xbox 360 was a games device first and foremost, yet more than half of the time spent on the console is now spent consuming other media. Score one for the Trojan Horse tactic. That’s why it seems so odd that Microsoft have abandoned the tactic so well in the last generation.

But the real problem with the Xbox One is about the strategy, not the tactics.

Xbox One is a 1990s strategy

The Xbox One is the latest step in a strategy conceived in the 1990s. The ambition was to control the living room. That seemed like a laudable objective back when the world seemed likely to be heading towards bigger, more dominant, more impressive screens in every room of every house.

That’s not what’s happening any more.

Since Bill Gates first set out the control-the-living-room strategy, two things have upended the old order. Firstly, all of us have a powerful computer within 5 feet of us at every hour of every day. The smartphone has altered how we consume content . The second is the emergence of the tablet as a media consumption device.

Smartphones and tablets are often called the second screen. I think we can expect that to flip over time. The first screen, the screen we turn to first, the screen that is personal and connected to us, will be a portable, personal screen. It will be a phone or a tablet or both. Households will still have huge TV screens for sports events, for shared TV experiences, for HD gaming. But instead of the future being that every room in the house will have a screen, it is that every person in the house will have a screen. The future battle is not for the control of the living room: it is for control of the direct relationship between creator and consumer via this personal screen.

It’s like Microsoft is fighting to be the person who controls the fixed line phone in an age of mobile telephony.

Corporations versus startups

I am a big fan of The Lean Startup by Eric Ries. One of the most depressing things an advocate of the Lean Startup approach can watch is a talented team executing flawlessly against a plan chock-full of wrong assumptions. Entrepreneurialism is about figuring out how to adapt your plans rapidly to changing information. Bill Gates was an entrepreneur. I fear that no one left at Microsoft is. They are executing against a 15 year old strategy that assumes that the living room is at the heart of where value lies for content consumption in the twenty-first century.

I’m not saying that HD experiences have no place. Far from it. But I am saying that Microsoft is fighting a three-way battle for the living room against set-top boxes and the PC. Meanwhile, two other contenders - the phone and the tablet – have waltzed in and said “Hey, you guys. That’s fine. You go and spend billions of dollars on controlling the living room. We’ll sit that fight out. Instead, we’ll build a strong, personal relationship (complete with one-click purchasing) with every consumer on the planet. You can have the rooms. We’ll have the people.”

The assorted criticism of the Xbox One from the web (“we didn’t see the games”, “MS doesn’t care about indies”, “it’s all about telly”, “it’s all about the US”, “it’s all about 15-34 white male Americans”) are all part of the same story. Microsoft is fighting to control the living room. It might yet win.

And then it will stop. Look around at a living room filled with four family members each engrossed in their own personal device, buying and sharing and playing and watching, glancing up occasionally at the big screen.

And they will realise that a strategy forged in the late 1990s might not be so relevant in 2013.


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Comments


Jay Anne
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I have a difficult time reconciling this: If living room TV is on its way out, why are so many people hungrily anticipating an Apple TV?

Brian Schaeflein
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Apple fans have their own physics. Laws of momentum and all that.

Nicholas Lovell
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I don't think this is difficult to reconcile.

The personal device is our connection with media. Sometimes, it is nice to watch our media on the big screen. A small, cheap device that allows us to throw our personal stream onto a very big screen makes a lot of sense in that scenario.

An expensive living room only device makes less sense, if you believe, as I do, in a personal media future.

Jamie Churchman
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Apple TV acknowledges your phone/tablet is your primary screen, so they (try) to make it easy to push content (photos, music, games, video) through to the lounge screen via Apple TV. Modern consoles treat the phone/tablet like a side gimmick to enhance whatever the console is doing. Which, if you believe the article, is looking increasingly out of touch.

Nicholas Lovell
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Thank you Jamie, that summary of the difference is excellent and concise.

Jay Anne
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@Nicholas
Sorry, I must be misunderstanding something. What does personal media mean? What is a "personal media future" and which devices give it to you?

I can't figure out if you're saying TV is dying. My point is that given the excitement from Apple TV, it's not going away soon. Is your point that an Apple TV still makes sense despite the dying of TV just because its cheaper in price? Or would you say that an Apple TV or Google TV or Roku or Samsung Smart TV are all doomed too?

Richard Black
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Didn't Apple TV come out ten years ago with little success? Apple has it's own cult none the less but if they didn't make it a success the first time I doubt they'll manage a second with the new management.

Jacob Germany
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@Jay Anne Whether one agrees with him or not, what he's saying is this:

TVs, PS4, Wii U, all treat the TV as the primary screen, with tablets as the secondary screen (worst with the TVs offering your tablet/phone as a "great remote!").

Apple treats the portables as the primary screens one takes everywhere, with AppleTV and other methods allowing that big-but-immobile TV to be a secondary screen (when one wants a larger but immobile image of that personal device).

Microsoft, then, is treating the TV as the only screen and ignoring the personal devices. The weirdest of routes.

In this light, AppleTV isn't an indicator that personal devices aren't outpacing entertainment centers, but an indicator that the entertainment centers are becoming more and more a peripheral bonus. Large TVs and surround sound systems augment the fundamental personal experience, but the personal is what is important.

Jay Anne
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@Jacob Germany
Thanks for the clarification! Maybe it's a question of what "primary" means. As a media company, I would think "primary" really means where users spend the most money on media. So do most users buy media and subscribe to cable for the purpose of watching on smartphones or tablets or TVs? I don't have access to that data, but if I had to guess, it's currently TV's where most money is spent, followed by tablets, and then smartphones. I'm going to assume that tablets are growing fast, but without data, I would not know if or when they will overtake TVs.

If the article is saying that Microsoft's strategy is outdated because tablets will soon overtake the TV as the place where most money is spent on media (cable and Netflix subscriptions, on-demand video purchases, etc), then that's VERY interesting and I would love to see data on that.

Also, the question might be, is there a chance that Microsoft or Apple or whoever can improve the TV viewing experience with their device so as to decrease or even reverse the trajectory of TV as the user's preferred place to spend money?

Jacob Germany
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That's a good point, about the money spent. My guess is that TVs would win for money spent, while tablets would win for time spent. However, the trends are definitely on the side of the tablets, as they simply need to convert that time into money (unless you count micro-transactions in social games, which may mean that realm would win in money spent by consumer, who knows?)

Jay Anne
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@Jacob Germany
I wonder how much of that tablet time spent is either overlapping with TV usage, spent on low engagement activities, or free activities like surfing and watching Youtube. If I had to guess, the majority of tablet users would not prefer to pay $29.99 for The Hobbit HD and watch it on their tablets, especially if they have a big TV.

Jacob Germany
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Yup, but the answer probably doesn't lie in replicating TV-like spending habits on the tablet, but creating new spending habits. Like how Steam didn't replicate console-like "a handful of expensive games per year" spending habits, but encourages more "buy a lot of cheaper games that you may never even use, but you'll have them if you want them". Maybe the answer is having a tablet version of Steam habits, like buying many, many movies on nice sales to build up a library just in case you're out of your home and want to watch something, as opposed to buying just a few expensive BluRay movies per year.

Jay Anne
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@Jacob Germany
True, the essential question is: How far will lower quality tablet media viewing disrupt higher quality TV viewing? Is tablet media "good enough" for most people? Will people get rid of HDTVs because they no longer feel they need to watch The Avengers on a big screen? Or will they watch the 49ers play on a tablet? My guess is that lower quality tablet media causes people to want to spend very little money, deciding instead to save that time to watch Youtube videos and news clips. But it'll be interesting to see how it actually pans out.

Brad Borne
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@Brian Schaeflein: Yep, that's it Brian, because looking at Apple products and asking WHY people want them is apparently far too civilized behavior for us to partake in. Simply, Apple users are all idiots, nothing we could possibly learn from Apple's success :/

Can you hear me sighing from over there?

Nicholas Lovell
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Fascinating discussion, Jay and Jacob

I fear that a focus on the money is, as Jacob says, a mistake. We are going through a major disruption as we transition from the location-based paradigm (the living room) to the personal based (the tablet/smartphone).

The first phase will involve lots of cheap content on tablet/smartphones. If the big media companies are lucky, the next phase will involve expensive content on the tablet/phone. But most disruptions see new ways of spending money emerge, with different models. A model that aims to replicate the $14.99 physical DVD in a digital environment on a tablet seems likely to be hard to achieve.

Jay Anne
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@Nicholas
Interesting new data point. Phil Spencer says half of Xbox usage currently comes from entertainment apps. That's way more than I would have guessed. I'm assuming their data shows that is going to increase if they're betting on $400 million dollar deals with the NFL. It should be an interesting time.

Nicholas Lovell
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I've known that datapoint for a long time, and I don't think it is positive.

The first is that the difference between what people *actually* use something for, and why they buy it in the first place are very different. Exercise bikes often turn out to be "places you hang clothes" for example.

The second is the positioning. "Here is a device that does all these things, oh, and it also plays games." I do see that once you have spent $500 on a gaming device, you might use it for Netflix or whatever. I don't see that people will spend that money on a TV-watching device though.

In essence, I know that statistic. But it explains how a mature platform can evolve, not a mechanism for how to get people to buy it in the first place.

Jeremy Reaban
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I think people are overlooking that it interfaces with Surface, and Microsoft has tried to adapt to tablets/mobile, with Windows 8.

But beyond that, as someone pointed out in Ms. Alexander's post, I think this is a case of "Nobody I know voted for Nixon". Gaming journalists tend to be well, hipsters. They might not own a house with a living room, but that doesn't mean that that is the norm.

Nicholas Lovell
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I don't think that the living room is going away. I just think that we will all have a device that is our personal consumption device.

So on the one hand, only a powerful box (although tablets will become powerful) attached to a big screen can deliver a gaming experience.

On the other, we will all have all the media we want streamed to our tablet, and potentially streamed from that to the TV.

I know that it interfaces with Surface etc, but MS is spending heavily to make the Xbox dominate the living room. That is a big bet on what is likely to be the wrong strategy. There are only so many big, flawed bets that even Microsoft can take.

Susan Cummings
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I think you're forgetting, Jeremy, that Microsoft needs the early adopters to buy this device if it's to get anywhere with the masses. The early adopters are techies and undoubtedly are overwhelmingly in possession of tablets and smart phones and less attached to a living room.

Paul Shirley
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@Susan Cummings

They're also overwhelming in possession of DVR/PVR, SmartTV and rich media source feeds. It's telling that MS has to overlay their stuff onto existing sources, a tacit admission they've already lost the content war.

Jonathan Adams
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It is reasonable to assume that MS did the math on this and made some predictions based on it. Whatever the accuracy of those predictions, I do hope that the math is eventually shared with the public, even if not for years.

Nicholas Lovell
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The most miserable thing for a Lean Startup person: to watch a talented team execute flawlessly on a plan full of flawed assumptions.

Ron Dippold
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Every time someone says that MS must have some very smart people making some very complex and accurate decisions on good assumptions I think of their long series of disasters like Surface RT, Zune, WinPhone, Windows 8 on desktop (still salvageable for what's left of that market)... You can have all the good info and analysis skills in the world, but that won't save you from what management wants to be true.

Now it's quite possible there's a large enough brosumer audience to make this a huge success, but all in all, large enough company decisions seem mostly to be flailing around randomly till they find something that works, then seize it and milk it till it dies, rather than finely calculated plans.

Jacob Germany
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I have difficulty thinking of something in recent memory that Microsoft did well enough to warrant such faith in their ability to "do that math" and not make poor strategic decisions.

Michael Joseph
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http://www.gamesindustry.biz/articles/2013-04-11-pc-shipments-suf
fer-worst-quarterly-decline-ever

The strategy is rooted in the 90's but it has been influenced by the last 5 years. MS doesn't really want to "control the living room" anymore I think so much as transition their windows PC users over to a more closed ecosystem. I think that is more the defining characteristic and corporate mantra these days.

The software as a service/cloud computing has been gaining traction with businesses but not so much in the home. The ONE I think represents a strategy that will begin to change that.

One *choice MS wants families to face is, do we buy a new PC or do we buy the ONE instead? If people can surf the web, play their music, use skype, check email and watch netflix and hulu on the ONE that may very well be good enough for a lot of people. Ultimately, they'll even be able to use
https://en.wikipedia.org/wiki/Microsoft_Office_365

* but its likely multipronged and won't end with a choice to buy a PC enabled with Win8+ instead.

Jakub Majewski
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Hmm. You know, all these articles pointing out the flaws of the Xbox One and Microsoft's general strategy make sense - but at the same time, I can't help getting the impression that everyone is missing the point.

I'm far too cautious to make any big assertions about the future of the Xbox One - we'll have to wait and see how it goes. However...

I remember a couple of years ago, while on a press tour, I was talking about the future of consoles with one of the PR guys I was travelling with. A real veteran, well in his forties. His opinion was that the next generation of consoles needs to look really, really ordinary. He pointed to his own example - he could not play games in his living room, because his wife refused to accept an outlandish piece of equipment like the Xbox 360 in the living room. It simply did not fit with the other appliances. Well, look at the Xbox One! Did Microsoft listen to this guy, or what?

Why am I telling this? Isn't it pointless to analyse a console based on its appearance? Maybe, but it just seems very symptomatic to me. I think the appearance in this case tells us a lot about who Microsoft may be aiming for - and unlike everyone else, I don't think it's the 15-34 year-old crowd.

Or, to be precise, the target audience *was* the 15-34 year-old crowd... back when they bought the first Xbox. But they've grown older, they're the 30-50 year-old crowd now. They have wives, they have kids, they *do* have houses and a living room with a big TV. Do they have mobiles, and tablets? Sure. But they're much more sedentary than the current 15-34 year-old crowd. And they love their big TVs - as a matter of fact, they're ideologically attached to them, because for the past twenty years or so, the top trend in TVs was size. Bigger always meant better. It's only today's fifteen-year-olds, who grew up with huge TVs that can shrug away size and appreciate instead the portability of the tablet.

If this is indeed what Microsoft is thinking, then I think it may well be the only strategy that would work for consoles at this point. I mean, really, what's the alternative? A lot of people are saying that the Xbox One doesn't make sense for the gamers of today, and this may well be true - but how exactly would a console for the gamers of today look? Would it exist at all?

(It is of course a perfectly fair answer to suggest that they simply shouldn't be making a console at all)

All in all, I think the target audience of the Xbox One is there. It's just that they're not the ones talking. When folks like Leigh Alexander talk about how the people she knows don't even have a living room, she is perfectly right - but who said they're the core market? The first Xbox was targetted at adults, and already back then a lot of the buyers were in their thirties. These people are now well in their forties. They have stable lives, they do have a disposable income, and they do keep playing games... and in many ways, their stability makes them a far more worthwhile market than the 15-34 year-old crowd.

Randen Dunlap
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Thoughtful response! I personally couldn't agree more. MS is trying to obviously create a "one stop shop" for the living room. It screams it in the aesthetic design, and the initial press release. I feel like it's an attempt to lasso in a huge consumer install base that wants to watch tv, and stream music while providing just enough functionality to meet basic expectations for the "gamer" market.

I think the biggest thing we, as the "gaming" industry, can take away from the initial release is that "It's not just about us anymore." Due to technological advances and changes to how people consume media, we'll probably never see another "golden" age of standalone console gaming as we know it.

The real challenge for MS is satisfying both of those markets, so it most definitely is a "wait and see" approach, and I certainly wouldn't count them out.

So in short, try to see the bigger picture people. Also, trying to argue that there isn't a significant market for people that want to consume media/content on their "huge" TV is just plain silly.

Nicholas Lovell
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Hmmm. Dismiss my entire argument as "just plain silly". OK, I suppose.

I'm not arguing that people don't want to watch stuff on their huge telly. I'm arguing that the real powerful relationship is between consumer and their personal device, not consumer and "powerful device tied to the living room".

I see more use cases for a personal device than can occasionally throw content up to a 50" screen than for a dedicated box tied to one room that can *only* throw content onto a 50" screen.

William Collins
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@Nicholas
"I see more use cases for a personal device than can occasionally throw content up to a 50" screen than for a dedicated box tied to one room that can *only* throw content onto a 50" screen. "

Which is why *Surface and WP8 exist. My eyes are on TV manufacturers. As more and more entertainment becomes streamed from the internet, what need for a set-top box of any type would we have? I am doubtless as to whether MS (and Sony, even) are aware of the possibility of this advancement and of the two, Sony has a slight head start regarding the manufacture of such a TV (assuming they can get their shxt together). Microsoft seems to have infrastructure/interfacing handled and with the 'One' will familiarize a larger audience with it.

(Maybe in the end all we'll have is the 'expandable screen'? Or 'Google Glasses' tech so small it could fit into any pair of spectacles and project anything anywhere through them?)

*I swear they should have named it, 'Window'

Jacob Germany
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So, now the target audience are older American males who watch football, want to constantly switch between games and television without touching their television remote, and whose wives don't like devices in the living room unless they have the basic design styling of VCRs from the 90's? And this target audience is willing to, en masse, spend $500 on a machine to do this?

I'm not even suggesting this audience doesn't exist. I'm suggesting that it's a fairly niche audience that they're convinced is "mainstream" and will help them move a significant percentage of "over one billion consoles" according to their own projections.

That's not even touching on the effect it will have on the used games market, game rentals/lending, demographics that don't have constant broadband connections (military, late-generation adopters who can't afford broadband, many, many areas in the world), etc. Will it sell? Sure. Will it dominate the market, or even find its place without struggling? I don't see how.

Diego Leao
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@Jacob Although you were joking, yeah, the target audience and the scenario you described just work (and it is not a "niche"). Older men (30 and up) are really more willing to spend money on a huge electronic device that does "cool stuff" in the living room, and to spend the "huge" amount of $60 per game regularly.

I'm 30, I come home and watch TV with my family. I don't have time to do much else, not frequently. I also spend copious amounts of time on my PC, and "sneak" away from the family to play games when I can.

So, that seems like exactly was MS is doing, and yes, for what you described, it is "perfect" :\ I hate that it makes sense, because the games are going to reflect that audience, and I just hate sports, shooters, and all these "popular" genres that will only become more pervasive given the costs.

In the long run, MS will have a very specific, but big and profitable audience, but games will only be produced for the masses (like those "brain dead" open tv channels) and they will monetize everything in your living room (which still is the place for the family to gather - we won't do it in bedrooms). It is wrong, ok, but it does makes some sense for a "behemoth" like MS to shoot for this kind of audience - just "make profit" is not enough for MS, they need to OWN a piece of your life, to become THE something. They will shoot for it when they have the slightest chance of winning, just because they can afford to fail.

Jacob Germany
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Are there many males in the United States who watch football and play games? Yes. Are there many that will pay $500 to buy a machine that lets them do what they can already do? I remain completely unconvinced. "Instant switching" between your game and your... other game is something that can be done with a remote. So, wherein is the draw, the motivation, to spend hundreds of dollars to replace your TV remote?

Yes, the XBox One will have exclusives, but so will the PS4. And there's quite literally nothing beyond "voice control" that can be done with the XBO that can't be done with a PS4 and a standard remote. So, unless the football "apps" native to the XBO or the XBO exclusives are enough to corner that market, Microsoft seems to be limiting (not expanding) its market without much of a draw to corner that limited market.

Or, maybe that limited market will watch commercials of "instant switching between your football game and your Skype and your video game" and be willing to put down the money and ignore what the alternatives offer. But, that's a gamble, not a certainty. Short of very, very specific apps, I've heard nothing in the litany of press and hype concerning what the XBO actually offers consumers. Well, beyond the voice control, which I guess is a "Woah, check this out!" sort of tech.

Let's just say if I were to invest/bet on the opposing platforms, I'd be very, very hesitant to put myself behind Microsoft's ability to corner a very limited market when it seems so ready to alienate previous markets with which it was doing well.

A W
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This was a good piece. Very good read in the nature of the console industry. As far I (a core gamer) understand it the core gamer market is not a reliable business model upon which you can build long term industries. If we look at the ever evolving industry that has been in business for 30 years now as far as video games are concerned games are in a demographic that is impulsive and fluctuating and doesn't have stable genres. Other forms of entertainment can sustain long term trends that can last for a season because they do maintain stable genres. At least that's how some hardware companies see it at this point.

When Sony entered the market, it was because they just wanted a piece of the pie, they already had the hardware market, and the entertainment market with movies and music. The game market was just another form of entertainment that needed to be exploited. So the PS brand evolved from a core gaming console into a connectivity device.

When Microsoft entered the market, much of it was to keep Sony from dominating the hardware space, as it seemed that Nintendo was not taking note of the new force of competition. At first it seemed that they where going for the core market and was perceived that this was what the Xbox brand was about, but now we can see that the real goals as One has revealed is that its about just controlling one area of the house,; the center of the family room, and delivering every form of entertainment under a subscription based model Microsoft controls.

Nintendo entered the video game market at a time when the gaming market was crashing and there was no faith in the market. Nintendo has learned through experimentation and has found ways of taking care of its core franchise and has proven (much of it to themselves) that the gaming market can be a sustainable business model, but at the cost of changing the way of playing games each time a new console is conceived. So far it has worked out for them, but time is ticking on how long Nintendo can sustain this model of innovation in the gaming space.

I don't think that the console market is dying. I think that the ones we have made the leaders of the industry just no longer have faith in the industry of video-games being able to sustain themselves. They are busy looking for parallels in the forms of entertainment that core gamer enjoy and trying to cross the unstable market of games with the stable markets of movies, TV series, sports, and music. At least thats what Microsoft is telling me in their first reveal of Xbox One.

William Collins
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Interesting, AW. I'd like to believe that the current leaders still have faith in core gaming as I personally believe that gaming is the premier way to experience entertainment. Our industry is in dire need of visionaries and revolutions in gameplay, which I believe are on the way. I don't even think we've tapped even 20% of what a 'game' can make a person feel. MS's current strategy could be a way of engaging someone who doesn't normally play games by using Kinect for something they DO do (watch TV)- Much like Nintendo's Wiimote was shaped like a tv remote control to mimic how non-gamers interact with their televisions.
Us core gamers may view MS as diverging from the core gamer, but they may actually be doing us a big favor. I am eager to see how this plays out, especially since they are fighting simultaneous battles on two other fronts (the tablet and phone).


*And really, did we all really think when MS entered the market it was just about gaming? In certain Maths, 'X' means unknown. It was obvious by the name (to me, at least) that the final version of whatever this new box was was going to be would be something not yet understood. And that may still be the case.

**Can anyone recall being paranoid about these huge tech companies (Sony and Microsoft) trespassing into gamer territory? Especially when MS entered the fray. I almost shat my fanboy briefs lol. I wear neutrality boxers now FYI

Rob Graeber
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Great post, in the context of the "own the living room" strategy, the Xbox -> Xbox 360 -> Xbox 1 evolution makes sense.

Seem reminiscence of their embrace, extend, extinguish strategy.

Gern Blanderson
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I think this is a good strategy of having one device for the living and most of the public would want this, even if they don't know it. The iPhone is a great example of the consolidation strategy that the public wanted, before they even knew they wanted it. I own an iPhone and I love it!

Remember back in the days when you went on an outing or vacation and you had to carry your cell phone, and your MP3 player, and a separate digital camera, and if you were really geeky, you had to carry your laptop to get email and internet? This was four separate devices with separate chargers and batteries and what a mess! Guess what? All of this is consolidated for me with me with one device, the iPhone.

I also want one device in the living room. Today, I have an xbox 360, a blue ray player, a Wii, and a cable box. The xbox One will allow me to get rid of my blue-ray player and if the television capability with xbox gets enhanced, I might be able to get rid of the cable box too. This is consolidation and it means less remotes, less batteries and less devices.

Nathan Mates
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I've owned a universal remote (Logitech Harmony) for what feels like a decade now. If "too many remotes" is a problem for you, there's a solution today. Not whenever (and at a higher price) MS releases this console.

William Collins
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@Nathan

How did you program your universal remote to play video games? Assuming MS's interface is quicker than button pressing on a remote control I don't see the need for one. Talking is more natural and as these voice recognition and gesture technologies improve we'll have no need for remotes. They can tailgate the development of Siri on iPhones as they improve the voice functionality on their console.

*I swear to bean Nintendo should have place some sort of TV remote functionality in the Wiimote. Incorporated it somehow ...

**Can you imagine commands that use a combination of voice and gesture? Or programmable ones?

Paul Shirley
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When you reach my age, after decades of disappointment, you'll begin to mentally translate 'one (multifunction) device'->'single point of failure'.

David Marcum
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Similar to my take when the announced Project Natal:
http://gamasutra.com/blogs/DavidMarcum/20100325/86985/Your_game_w
ill_never_reach_a_broader_market__motion_controls_and_3D_will_not
_save_you.php


Microsoft – Since at least 1993, Microsoft’s mission has been to become your access point from your living room to the rest of the world. In a 1993 interview (http://www.anonymous-insider.net/windows/research/1994/0927-d.htm
l#62), Bill Gates said:



“And already there is the mania in discussing this so-called "Information Highway" which is the idea of connecting up these devices not only in business, but in home, and making sure that video feeds work very well across these new networks. So we've only come a small way. We haven't changed the way that markets are organized. We haven't changed the way people educate themselves, or socialize, or express their political opinions, in nearly the way that we will over the next ten years. And so the software is going to have to lead the way and provide the kind of ease of use, security, and richness that those applications demand.”



Here is Bill Gates again in a 2005 interview: (http://news.bbc.co.uk/2/hi/programmes/click_online/4195177.stm)

“The vision is that people should have the ultimate in convenience. Being able to get the things they care about on the appropriate device.

So you have got to have a very simple user interface, you have got to have a richness of software that's there and available and you have to bring together all the elements.

Communication because you want to send photos around, the TV guide because you care about watching that, the latest interactive games that are always improving in very dramatic ways, you want this to be very holistic. So the user thinks: 'Hey I just sit down and I can access what I want'. “

I think this sounds a lot like Project Natal on the Xbox 360 with Zune HD (or Netflix, if you must) and, of course, Xbox Live. Is Project Natal for games? Microsoft says, yes! Please! They would like to have Natal in every home any way they can bring it. Is it for games? Well, no, its main goal is to enable you to scroll through menus with a wave of the hand or change the channel with a swipe of the hand. The goal of Project Natal is to bring people to the Xbox 360, not to games. But, if you want to help bring Natal in the living room for Microsoft with a game that uses Natal functionality, go ahead. Maybe you can build a game for core gamers that utilizes Natal in a fun way. But that is not Project Natal’s mission (nor, in my opinion, its strength).

The following links are interviews with gaming sites about Project Natal. Notice that the talking point quickly turns from gaming to navigation. Arron Greenberg states that “you would not want to play Halo Reach with your body… It is not designed to replace the controller”.

http://www.hulu.com/watch/129815/ign-project-natal-interview

http://www.hulu.com/watch/79469/attack-of-the-show-xbox-lives-maj
or-nelson-talks-project-natal

warren blyth
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So: why did the Wii sell so well?

I'm slightly baffled by your perspective - because I see the same events having completely different explanations.

example: Gates said "Being able to get the things they care about on the appropriate device," but you immediately twist that into getting things on ONE device.

also, regarding Natal: I've long thought that people bought the wii for the "magic tech" of the wiimote. and then they started buying Xboxes for the Kinect's "magic tech." kinect adventures and dance central were fun games, and only possible with kinect. People want the cutting edge tech magic. But swiping screens and voice activated menu items isn't where kinect dazzles consumers. (despite having my kinect connected everytime i use my xbox, I don't use it to navigate menus. controller is better. i use kinect for games).

David Marcum
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@warren blyth
"I'm slightly baffled by your perspective - because I see the same events having completely different explanations."

Please forgive me for not making my point clearer
To quote from the post I made a few years ago,"How are Microsoft, Sony, and Nintendo using/planning to use their tech to expand their market? The answer is different for each company, because each company has positioned itself in a different space, with different goals, and view their target from a different perspective."

The wiimote strategy was to expand Nintendo's market by adding a easier to understand interface for games. Nintendo is a game company.

Microsoft not being primarily a game company implemented a similar idea (ease of use) with a different goal. Which was to introduce new tech to make their machine more accessible not primarily for playing games but to bring non-gamers to xbox services.

If you watch the Xbox One reveal you will notice they certainly used the kinect a lot. Not once did I see anyone using it for games. But just because kinect's primary use isn't for games that certainly doesn't mean it can't or shouldn't be. But watching the Xbox One's event, I think they made it pretty clear that kinect is being sold as an user interface first and foremost.

E3 is just a few weeks away, kinect will be there and games will be there. And games using kinect will be there, however you will see many more games that will the standard gamepad than you will with kinect. And as I said in the post, "Is Project Natal for games? Microsoft says, yes! Please! They would like to have Natal in every home any way they can bring it." But I still contend that the answer is also, "...no, its main goal is to enable you to scroll through menus with a wave of the hand or change the channel with a swipe of the hand. The goal of Project Natal is to bring people to the Xbox 360, not to games."

To tell you the truth, (and I mean no offense) I am baffled how anyone can watch the Xbox One event and come away with any other impression than that kinect is for a low friction UI connecting people with Xbox services.

I have read your profile description, so I think maybe you see more potential for kinect and feel that it would be under utilized as primarily a UI. And you could be right. But my point is Microsoft sees it's primary value as I've outlined.

You may remain unconvinced that my perspective is correct, even though I am. That's fine with me. People disagree about this kind of thing often.

TC Weidner
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the only way this works is if Microsoft spends billions advertising and convinces people they need this "thing". Never underestimate the gullibility of the US consumer, we are a very easily conditioned and malleable bunch. I mean how else do you explain bottled water ( no better than the water already out of the faucet), subway sandwiches ( sandwiches taste like cardboard), music industry ( a bunch of pre packaged nonsense), and on and on.

Face it, in america you could sell a turd in a box by the truckload if you just advertise enough.

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TC Weidner
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@Dave , watching that reveal it seems as if xbone is a US targeted product since it takes into little consideration the TV setups and operations of the oversea market. Becomes even more apparent when seeing that xbone(microsoft) just signed a 400 million dollar NFL ad campaign. So it seems rational to speak about the US consumer.

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Jannis Froese
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If their presentation is anything to go by, they have a lot of focus ... on TV. I don't need a Set-Top box which tries to sell me movie tickets, but I am sure there is a market for it, so the strategy might work. Or perhaps everybody is happy again after they show us the new Halo at E3. It's really too soon to say anything

warren blyth
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Dave wrote: "the living room is far from outdated and tiny portable screens will never fully replace large comfortable ones"
... but, it has been proven that tablets are mostly used in living rooms. So there is a serious threat to the single large tv.

I think tiny portable screens will quickly replace large embedded ones - in every other room of your house. And soon the large HDtv will offer something closer to a "theatre experience" (visited rarely, only on special occasions, while tiny portable screens are used every night/hourly).

The first time you lean an ipad against the wall while washing dishes or cooking food (or use it to kill time in the bathroom instead of reading a magazine) (or watch a movie while laying comfortably on your back in bed) - you realize something major has changed in how we all can consume screen time.

My HDtv and surround sound system have become "dad's room stuff" because nobody else in my family really cares about the superior experience I've setup in there. My wife would much rather our large living room be HDtv free, to accomodate socializing. Even though we both consume a lot of portable screen time in there.

I think this magical "any-room, any-time" personal screen experience is still slowly spreading out. (because it's hard to explain to people who don't have a tablet yet). But it's too powerful and superior to the old one-tv-in-living-room experience to dismiss.

Harry Fields
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I still cannot see what all the negative press is about... what the hell was everyone expecting from this event? That Xbox was going to become a series of mobile or web APIs for social/casual game development? Nothing was especially surprising, but everything is pointing towards a stellar launch, regardless of the vocal critics. X1 will facilitate AAA development at approximately the same (if not lower) costs of the current generation. Is it an open Indie friendly machine? Nope. Is it going to be on everyone's Christmas wishlist? You bet!

And all the features everyone is now maligning as out of place or out of touch will become what everyone loves about it. It's been a long time coming and I can't wait to see what this puppy is capable of within the next couple years.

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Michael Brodeur
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I agree!

I don't think it makes any sense to negatively assume this or that when details are still emerging. On top of that, if something isn't taken very well by the community, Microsoft can always make adjustments.

Jannis Froese
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The thing is that all the core gamers are upset that they anticipated a presentation for one month and all they got to see were a set-top box and sport games. Now everybody looks at all the worst-case scenarios until they give us something to like about the Xbox One.

Well, that is the general attitude. This article brings an interesting point, which might be right (still, even if MS doesn't use this video surveillance in the living room, they still get all our TV habits ... oh wait, I am doing it too, am I)

William Collins
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Agreed, Harry. This feels a little like when Nintendo first unveiled their Wii console.

Eric Pobirs
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Funny, the box that is already out that attempts to bridge the gap between big and small screens is having a terrible time in the market. A big reason the Wii U is failing is that it doesn't fulfill any of its promises very well due to its lack of focus.

Just because the market is more diverse doesn't mean existing categories become obsolete. Not every product becomes a buggy whip in a world of automobiles. You could give away tablets and smartphones and it wouldn't change the fact that the big screen in the living room remains the place where people will best view content or interact, especially as a group. A movie or game that gets several people together for a shared experience is the real social media, not a bunch of individuals isolated from each other but for streams of electrons occasionally acknowledging they've seen the same web page.

A console in 2013 has to deliver a lot more than a console in 2003. So what? You could just as easily say the same thing about a cell phone in those two eras. The best phone that could possibly produced in 2003 and afforded by a small highly affluent market pales in comparison to what those of a median income are offered today.

There will remain a call for high end productions that require the power of newer platforms to realize. It is no coincidence that the most impressive and elaborate game I've bought thus far for my phone and tablet looks like something that might have been offered to PS2 owners a decade ago. It is a great thing that there are so many different platforms now available to exploit and they each play host to a wider range of choices than their predecessors. A developer today has far better options than those laboring 20 years ago under severe constrains of limited media capacity and cost. (Though it can be a bit overwhelming deciding what is the best type of project for your talents.)

Much of the Xbox One promise will never be realized. That is simply a given of such things. But another given is that applications will find popularity that were not foreseen in the initial plan. Such is the power of software. Look back on what goals were set with the 360 over its career and you'll that much of it is only now being made real with its successor. The same can be seen in any company's platforms over time. The XBLA concept was launched on the original Xbox but was only a sampling of what the 360 would deliver. The 360 has seen a lot of use beyond gaming but is constrained by a design finalized the better part of a decade ago.

In the same fashion I expect much of what is promised with the X1 will never appear in a satisfactory form. But it will show how to get there with its successor, whichin turn will have a whole new set of goals to never quite reach. But as long as enough value is delivered along the way, people will keep buying.

Kevin Patterson
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Great article and I agree Nicolas.
I think MS has forgotten what made the Xbox great, in their quest to take over the living room.

I admit that I have always been very pro-xbox and harbored anger at Sony in the past. This came from my beloved Dreamcast dying early, and the things that Sony said about the Xbox and the 360 when it was first released. My friends all went the same direction I did, and so we became all Xbox owners, and we would have Xbox parties all the time.

For the first time since the original Xbox was launched, I fear my group of friends will be fragmented. none of them wants lug around a Kinect to play at an Xbox party, none of them are happy that the Xbox One is so focused on media and underpowered compared to the PS4, none of them are happy about the Xbone and possibly the PS4 doing the used game shenanigans, we all wanted a super powerful gaming console, and thats really all we wanted. Some are talking that they will stick to the PC and Steam (which has DRM but the sales are so marvelous who can really complain), getting a PS4 as they don't want kinect on all the time or care about waving their hands in front of the tv, or even just sitting out and waiting a year or two to see what happens in the market. These are people that buy consoles at launch with at least two to 3 games, extra controllers, etc. These are people that have families and usually have multiple consoles through the house. That none of my friends right now, including me, are sure they want a Xbone or will ever get one is a major change, its just unbelievable to me.

The new Sony and Cerny's PS4 is seemingly much more gaming focused, and right now that is what i want in a console. I haven't bought a playstation at launch since the PS1 and I'm seriously thinking about it as my launch and possibly only console. I'm just amazed that the tides have turned like this.

Mario Kummer
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Yes, this is a strange console generation. Same here for me and my friends (most own all 3 current consoles). Somehow it started with nobody buying a Wii U, and now it will continue with no one buying a Xbox One. Now everyone is hoping that Sony does not make too many silly moves. This year will be a very interesting E3. And from what I have seen till now I would buy a WiiU before an Xbox One. There is a lot one can criticize but somehow the always on and required Kinect has become the red flag for my family. Especially since I saw this link that another user posted in a discussion: http://www.extremetech.com/gaming/139706-microsofts-new-kinect-pa
tent-goes-big-brother-will-spy-on-you-for-the-mpaa

James Yee
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Add me and mine to the list "Current multi-console" owners not planning or excited for any of the new systems. Especially with Oculus Rift floating around out there. :)

William Collins
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LoL Dudes, just wait for E3 and see what games Sony and MS reveal between then and the fall. I'm sure this winter will turn out better than you all think. And really, when is the last time we saw two new consoles being released at the same time? This is going to be one of the hottest winters on record imo.

Titi Naburu
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Nicholas, your argument about living room devices and personal devices is totally correct.

If I wanted to own the living room, I'd build a ridiculously cheap screen, where you can connect any device instantly. I'm including computers, tablets, keyboards and joysticks in that list, because we all have them already.

Michael Bakerman
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I agree that if you want to be The Answer to something, you have to do it not only Better but more Cost-Efficient than your competitors.

This reminds me of when PS3 was announced. The console was such a hefty price tag, but the big draw was that you're not just paying $600 for a gaming system, No, No, you're also getting a shiny new Blu-Ray player! AND I can play next gen games? What a deal! Consumer-demand for Blu-Ray was huge.

Seems to me Xbox 1 is thinking it's the same deal. Get your big gaming system, AND, a shiny new Home-Entertainment hub!
Question is, is that a sure-fire craze right now? Not to mention, even though they'll enter the Media Hub market without Sony or Nintendo as competitors (from what we know so far), they're now allowing consumers to compare the Xbox 1 to Apple TV, Google TV, any other future TV service. If Xbox 1 cant measure up to these companies in terms of service, features, content, upgrades... they're going to lose out on their biggest selling point.

Mario Kummer
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What I like about this article is the mentioning of a 1st and 2nd screen switch. Nice observation, I think its true for people who are more on the consuming then on the producing site. I for example was against the ipad when it was announced, i thought it is stupid without a keyboard, it can't do anything that I can't do better with my laptop etc. etc... And then with the iPad3 i got interested in the retina display, bought one, liked it and used it for surfing the web. One day I realized that I didn't go to my pc for weeks, my iphone and ipad are the main computers I use and my PC has transformed into a SteamBox ;)

Jim Bo
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Great article and some very interesting points. I agree that your media consumption in the future will not be tied to a box under your TV. But, why should your media consumption be tied to ANY one device, whether this is your cellphone or your living room box?

Doesn't the future really lie in having more hardware agnostic platforms that can be accessed from anywhere? That leans more heavily on cloud based storage?

It seems that future isn't going to be that one screen is the primary and the other is the secondary. It is that all screens are secondary. The "primary screen" will actually just being the platform that runs seamlessly on all of them. Why stream something from my phone to my TV... shouldn't both be directly accessing and streaming from the cloud?

Look at Netflix. I can access it from my PC, my TV, or my phone. I can access it from iOS, Android, PS3, etc. I don't think to myself "Netflix is part of my phone" or "Netflix is part of my TV." The content and the centralized platform is what is important, not the particular hardware device or even the particular software that is being used to access it.

I'm not 100% sure what Microsoft's goal here is though. Do they see XBOX One as a great machine for access/interfacing with other platforms that provide content? This seems very feasible. Or do they seem XBOX One as the platform itself for hosting content? This one seems doomed to fail as long as it is tied to any one piece of hardware.

With everyone company now days fighting to create it's own wall garden and access to content being so fragment, the true dream of "one platform to rule them all" unfortunately seems pretty far off right now.

Jakub Majewski
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I tend to agree, Jim, but we are not there yet. OnLive failed precisely because it turned out that their basic premise, while hugely exciting, was premature - the technology is sort of there, but the user base is not. There were simply too few people able to properly enjoy OnLive for it to be successful.

Give it another five, six years - and sure, it may be more possible. But five-six years is just about the length of a console generation. Both Sony and Microsoft are certainly preparing for this, but in the meantime, their consoles being released in the next few months have to be targetted at the present demand. They can't release a console that will only become viable in half a decade.

Certainly, though, they will be working very intensely on making this happen. The Xbox One is currently not backwards compatible, right? I would bet that before this generation is through, Microsoft will get publishers to convert as many Xbox/Xbox 360 games as possible to a cloud service, effectively using them as test subjects to see when the market might be ready for cloud-only releases.

G Holt
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Very good points made! The one thing I would inject, is that you are looking into the future, and MS is looking into the present. These structural changes in our society usually take a generation or two until they are the norm. Sure, I would bet most of us here on Gamasutra use the TV as a 2nd entertainment screen. We stream to our tablets, smart phones, etc. and aren't always connected in the living room. But the majority of folks out there don't - they are either too old fashioned to embrace this new technology, too non-tech savvy to pick up this new technology, or just too lazy to switch from what they are used to - a cable box with a remote control. Also, there is a huge part of the population that watches sports. This is still dominated by live TV and the cable box.

I would say that MS knows this market, at present, is much bigger than the gamers-only market, and is going after them.

But like your article focuses on, this too is a flawed plan. The old fashioned will not be interested. The non-tech savvy people will not know how to run an Xbox One. The lazy will stick to what they have. And the sports oriented viewers will not need an XBOX One to improve their sports watching. Meanwhile, the gamers will feel betrayed and look elsewhere, and the tech-savvy will see the Xbox One as a waste of money.

Casimiro Barreto
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Again and again the advocates of "gaming console is dead" come back. But this article touches some interesting issues.

First of all, I don't think PCs or phones or tablets will "triumph over consoles" any time soon. For two basic reasons: they are to games what a Swiss tool is for good woodworking: improvisations and because the "total cost of ownership" regarding to PCs and phones and tablets for gaming is high. Another reason is that industry needs a leverage platform where they know they'll sell millions of copies of $50 games without having to mind "oh, but it will be ok in nvidia but not so in ATI... or the converse".

The mistake of Microsoft is shooting in every possible direction, sending mixed messages that makes both their customers and their partners confuse.

Ok, so XBox One will have TV services. What does that mean in terms of service providing? Will it require a new kind of subscription? What channels will be available? What are the network requirements? How do people migrate from their current cable TV subscriptions to the announced Microsoft services? Have Microsoft asked TV Channels if they think it's OK to have Microsoft as a middleman? How it works in different parts of USA (not to mention in different parts of the world?). How Microsoft collects data to generate their program recommendation system? Is their program recommendation system channel/producer neutral? Will they sell collected data? If so, how they deal with privacy issues? Too many questions, too few answers... But never mind... in E3 they'll tell some more...

Ok, so XBox One links content to user. What happens with the family stuff? Meaning: at home I play games and my daughter play games. I purchase a bluray (or even download a game through PSN) and both of us are able to play. With this strange stuff of face/voice/thermal recognition, will I have to purchase two copies of games so my daughter and I play the same game? If so... well so long to XBox...

Then, after the live launch, commentators tell me that games are attached to hardware. Meaning: if I want to play in different console I have to log in my account. If I don't have account in that console, then it will be needed to "pay a fee" that's eventually the full price of the game (LMAO at that). But all this is not confirmed by Microsoft (in their official channels or even in social networks they say that "everything is absolutely open and can change).

So... they presented something that's "absolutely open" (in terms of specifications, service conditions, etc) and called that "launch".

So, IMHO their mistake was that they avoided being adherent to the KISS philosophy (keep it smart & simple - or - keep it simple, stupid) and "inventing" too much. If they wanted to send bad news (like: no used games or mandatory XBox Live subscription) then they should have centered in that and tried to show the trade offs to gamers and game developers.

Laurence Nash
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@Nicholas - This was an excellent article. I completely agree wholeheartedly about what you wrote.

Just from my standpoint, I've lived in both rural and city areas in the last 3 years and the one thing that I keep observing is that the mobile/tablet is THE way that people consume media nowadays. Whether I'm visiting friends in rural Ohio or my sister in NYC, or even taking the bus to work in downtown San Francisco, or going to places like Tokyo and Seoul - emails, streaming video/audio, games, and such are all consumed on these small screens more often than on the TV or the PC. And it makes sense, people are out and about more than they are at home, and these mobile devices are with them at nearly all times of the day.

If people are having more "intimate" relationships with these smaller screens, then it goes without saying that this becomes their primary screen. It makes more sense being able to share your intimate moments from your mobile to a bigger screen than vice versa.

I always love it when companies make great products and push society forward, but Microsoft unfortunately, like you said, is going on an outdated set of beliefs which makes for some head-scratching products... like this one.

Samuel Carrier
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I've seen a few comments about why people look down on the XBox One but look up to a possible Apple-built television or a vast overhaul of their Apple TV box. As Nicholas already pointed out in the comments, it's because people will be able to stream content they already down on other, more portable medium to a living room experience.

Frankly, I think Sony is also well positioned in this, with their own services already on Android and the only player in this "race" having their own branded hardware covering everything (computer, phones, tablets, TVs, home and portable game consoles).

Considering Nintendo also has the same tricks available through their gamepad, with a few strategic partnerships, this generation isn't as unbalanced as we think. The focus seems indeed on bringing "complete" game and media experiences and making it seamless or "unified" across all of a consumer's devices.

warren blyth
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Loved this article. Just wanted to mention another perspective/anecdote:

I was at the WebVisions conference in Portland last week, which started with a keynote from Leslie Bradshaw about the rise of SmartTVs ("The Future of the Web is Video"). Essentially she said SmartTVs would be the next big hot thing, after smart phones, so we all need to start redesigning our apps with the large TV experience in mind. more video, less tapping. Because the current facebook and twitter apps kinda suck on a large tv (too focused on interactivity).

And I couldn't put my finger on why I disagreed so strongly with many of her points : until I read this article.

Now it is very clear to me that a lot of marketing/business people are looking at the booming smart phone and tablet experiences, and assuming these are training wheels for a singular large TV nirvana to come. But these folks are in for a nightmarish let down, when it turns out the large TV is as irrelevant to modern media usage as the land line telephone.

Nicholas Lovell
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I agree with your concerns. I think that the SmartTV is a red herring.

It's smart tablets and wowsers-that-HD-experience-is-cool big screens that don't need to be particularly smart.

THe personal trumps the shared. Except where the shared is more cool for being shared. But we only need one big screen for that.


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