With Personal Electronics, Xbox is Microsoft's Ace-in-Hole
Between the new retail spaces and its hip new tablet, Redmond appears to be chasing after Apple’s mantle, with limited success. What Microsoft doesn’t realize is that the key to building an empire of personal electronics is already sitting under televisions across the world: the Xbox 360.
The Microsoft brand might be weak, but the Xbox brand is strong. It’s arguably the winner of this generation of consoles, and even outsold its brand new competitor, the Wii U, just a week after its launch. If Microsoft wants to move into personal electronics, it needs to start with its one product that truly dominates its field. For years, Microsoft has been successfully positioning the system as more than just a games console. It’s an all-in-one entertainment platform incorporating streaming video, downloads, more casual games, and increasingly, TV. It’s time to kick that into gear.
Apple has had tremendous success not just building particular products, but building an interoperable, aesthetically unified products ecosystem. It’s one of the reasons that brand loyalty is so high – once you’ve already got an Apple product, others just seem to fit right in. Surface RT and Windows 8 represent Microsoft’s first step towards a similar idea – by building an operating system designed for both PCs and tablets, it’s trying to get people to make those mental connections.
When Microsoft first made the Xbox, it would probably have sounded ridiculous to reorient corporate strategy around a video game system. That was a time before the iPad. Now, non-traditional “personal computers” like tablets and phones are moving to dominate the marketplace. Apple might have a serious leg up in our pockets and our briefcases, but Microsoft is king of the living room.
Microsoft has always been the company focused on work. Its core customers are giant businesses, not obsessed consumers. Apple took a more playful approach to the idea of personal computing, and it paid off in a river of gold. Microsoft doesn't need to abandon it’s professional computing, but it needs to expand its Xbox brand and ecosystem and capture some of the PC market that’s more about having fun than doing work. We’re amusing ourselves to death, and Redmond can stand to profit.