I own an XBox 360. I also own a Kinect peripheral. It’s a nice setup. I can play any number of really cool games with it, and with hooks into services like Netflix and HBO Go, I can also watch a pretty extensive library of movies and television shows. That’s about the end of the value proposition, despite all the talk I’ve heard about Microsoft soon-to-be dominance of the living room in pieces like the one that appeared in Forbes. What evidence is presented in David M. Ewalt’s “Microsoft Xbox Is Winning The Living Room War. Here’s Why.”?
In some ways the Xbox is emerging as an alternative for those who want to cut the cable cord. On-demand movies and TV? Xbox can stream more than 200,000 high-definition titles. Premium channels? Game of Thrones rages on via HBO Go on Xbox. Live sports? Xbox has ESPN, every regular-season Major League Baseball game and Ultimate Fighting.
Last I checked, the availability of “on-demand movies” wasn’t a compelling reason to “cut the cord”. Every set-top box has the ability to download on-demand movies – as does every cable service. Premium channels? Try “cutting the cord” on your pay TV subscription service and see how much content from HBO and ESPN you get. And I don’t think MLB gives their stuff away for free either. You can find out as much by looking at Apple’s MLB app on the AppleTV. You need the cord to cut the cord, which is the opposite of what people are looking to do when they say they want to “cut the cord”.
I will, however, give credit to Microsoft for “working within the system”. One of the major announcements from E3 was WatchESPN, which gives XBox Live members access to 24/7 programming from all of ESPN’s channels. Again, you have to be a subscriber of these services (currently through Time Warner Cable, Bright House Networks, Verizon Fios TV or Comcast Xfinity TV – apparently DirecTV is still sitting on its “stepchild” status, like it does with most of these services). Although I can’t imagine that this type of extended programming will stay exclusive to Microsoft, I said the same thing about HBO Go on the AppleTV and I’m still sucking it.
This new low price (for the XBox) looks even better when you consider you don’t need to buy a new TV, which is what Samsung and, soon, Apple want you to do. “If you want to start a phenomenon,” says Ballmer, “it doesn’t start with thousand-dollar-plus devices that sell at unreasonably low volume and need major room redesigns.”
The “new low price” that the author refers to is Microsoft’s latest gambit of charging you $99 and locking you into a 2-year subscription that leaves you paying more for the device at the end of the lock-in. Works for phones, I guess. There’s also the gratuitous comparison with an unannounced product from Apple, a talking point that more and more authors are getting comfortable invoking. Despite the words from Microsoft’s CEO on the topic, people don’t buy TVs for the express purpose of getting access to content. People buy TVs because they need a TV; access to connected content is a feature. The XBox 360 is not competing with SMART TVs. One could however make the argument that you need a TV to use an XBox 360.
In fact, Ballmer is working to persuade the big pay-TV players—Comcast and Verizon are already Xbox partners—to allow their customers the choice of an Xbox over a cable set-top.
“Will a TV need both boxes? No,” says Ballmer. “We ought to be able to relieve the world of the expense of having a set-top box. … There’s no economic value in having two boxes that do the same thing.”