Wired 13.06: The Xbox Reloaded – A Great Read

Wired 13.06: The Xbox Reloaded Josh McHugh has an excellent write up out in the current issue of Wired Magazine on the new XBox 360 and the Microsoft executive in charge, J Allard.

In addition to profiling Allard, McHugh references what I believe to be the single most important strategically significant aspect of the new XBox 360, it’s capabilities as a Media Center Extender.

Specifically McHugh writes:

“Microsoft has made no secret of its desire to dominate the living room. Three years ago, it unveiled the Media Center PC operating system, a version of Windows that enables computers to function as TV tuners, DVRs, audio/video jukeboxes and editors, DVD players, and digital photo albums. Microsoft products typically start to function as promised right around version 3.0, and Media Center is no exception. Now that the company has worked out many of the bugs, there’s talk that Media Center will be a standard part of Microsoft’s next operating system, Longhorn. Which means that soon every PC will have the capabilities of an entire living room entertainment setup and, thanks to VoIP, be able to take care of your telecommunications needs as well.

The hurdle, of course, is to try to get everyday consumers to think of a PC as something other than a productivity tool for the home office. Which is where Xbox 360 comes in. Microsoft sells Media Center Extender boxes that slide into the console stack and connect a TV to a home network, which lets you control the Media Center from as many as five rooms in your house via remote control. The first Xbox supported an Extender add-on, but you had to remove the game you were playing, pop in a disc, and restart. That interruption only reinforced the office versus living room dichotomy for all but the most determined convergence geeks. Xbox 360 has Extender capability built in, giving users an effortless link between all the combined features – games, videoconferences, phone calls, a music library, photos, and all the high-definition video programming stored on Media Center’s DVR. All of which makes Xbox 360 more than just the next generation of gaming. It’s the latest iteration of Microsoft’s infamous “embrace and extend” strategy. Microsoft is spending billions on IPTV technology to try to become the video platform for the post-broadcast future of television. If the company can get consumers to embrace Xbox 360, Microsoft can extend into the entire house.

“This is absolutely one of the most ambitious things our company has ever set out to do,” says Ballmer, adding that Allard is “a little crazy.” “

Although McHugh has zeroed in on the power of the XBox 360 and what it may ultimately mean to Microsoft by way of owning the digital home, it is clear in his article that as much as Microsoft may see the XBox 360 as its beachhead into the living room, J Allard, as the executive in charge of XBox, still is firmly entrenched in the gaming camp.

“I ask Allard whether his book-sized memo outlines a broader strategy featuring Xbox 360 as a Trojan horse that sneaks Windows into the living room entertainment stack. It seems like a reasonable question. At $150 each, PS2 and Xbox are already cheap ways to kill two home-entertainment must-haves with one stone. But Allard recoils at the very suggestion. He looks like he’s about to curse, but then composes himself enough to answer my query. “If there’s a serious gamer out there who doesn’t get an Xbox console because a mom who wants to watch DVDs grabbed the last one, then we’ve failed,” he says.”

This thinking on Allard’s part is not necessarily a bad thing. Although the eventual role of the XBox 360 indeed will be as a Trojan Horse, the initial phase (the next year if you will) is going to be to get as many of these units sold on gaming merit alone as possible.

It will be when Longhorn is sold in 2006 that you will really see the biggest push for XBox 360 as a Media Center Extender. This is most likely when consumers will be upgrading their PCs and buying new 64 bit Media Center Longhorn PCs. At this point there will be a major push to begin to cross sell new Media Center PCs to existing XBox users. Although certainly many, myself included, will be early adopters and purchase XBoxes as extenders before Longhorn, for the mass market this is when the real push will begin.

And Allard, as one who is primarily a non gamer, I’m afraid you will be disappointed when I not only take one XBox unit from a serious gamer, but when I take three (at least initially) — but I suspect you may not be so seriously disappointed in the long run. I’m sure you guys will be making plenty more. One thing I will say is that I admire your passion and I think McHugh did a pretty good job of conveying that passion to the rest of us.

Also, XBox 360 grabs the cover of Time Magazine.

Thanks, Major Nelson!

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