CES Day Two, Lunch with Ian Dixon and Sean Alexander

Had a good day at CES Day Two. Started out with lunch with Ian Dixon from the Media Center Show and his wife Kim along with Microsoft’s Sean Alexander. It was interesting hearing from Sean about what he’s been up to. Sean recently changed jobs at Microsoft and is now working with the Windows Digital Media Division. This is the group at Microsoft responsible for Windows Media Player among other things. Windows Media Player is one of my favorite applications that Microsoft makes and it’s great to see Sean back on that team. Sean reiterated to me that the performance with Windows Media Player has improved dramatically in Vista and corrected my previous statement that Microsoft had tested Windows Media Player with one million songs, but told me that they’ve actually tested it with two million.

Windows Media Player according to Sean has had a pretty serious overhaul in the performance area and this is something that I’m really looking forward to seeing. Apparently the only way to get Windows Media Player 11, at least at present in beta form, is with Vista. I’m not sure whether you will be required to upgrade to Vista to get it when the product is complete.

Ian is hitting the convention hard and has already met with and interviewed a number of different people for the Windows Media Center show. Most interesting is probably that he scored an interview with Joe Belfiore head of the eHome Group for Windows. Joe was able to give Ian a lot of time and the interview sounds like it will be pretty good. Look to Ian’s show for this interview in the next few weeks.

I talked alot at lunch with Sean about the problem of getting more HDTV content on a video on demand basis. According to Sean one of the problems with getting us more high def content on a downloadable basis is the cost of the bandwidth. Although less of a cost for a major bandwidth buyer like Microsoft, for many smaller companies the bandwidth cost of downloading high def content is still an issue. Sean thought though that we would begin to see more high def downloadable content in the future in places where it had an economic or marketing value. Sean mentioned movie trailers as being prime candidates for these kinds of downloads where their would be a marketing value to the content.

We talked about Viiv a little bit and the improvements that this might bring for Media Center functionality. We talked about some of the things that MTV is doing and Urge and the good news from DirecTV and Microsoft about their collaboration to offer you HDTV on Media Center. At first I was super surprised about hearing about Murdoch agreeing to offer up his content through Media Center but the more I think about it the less surprised I am. Certainly with the CableCARD announcement by Microsoft DirecTV’s hand was most likely forced. At present I subscribe to DirecTV. If though Media Center had CableCARD and I could get HDTV through it I would cancel my DirecTV subscription and instead get cable so that I could get my HDTV content through Media Center. The more I think about this the more I think that this is just pure solid defense on DirecTV’s part. This way they get to keep me as a customer and all the others who are aching for HDTV on Media Center.

HDTV through Vista either with CableCARD or DirecTV is super exciting. I know that I am looking foward to *finally* upgrading my orignal HP 873N (the very first and original MCE machine) once I find a good Vista machine as they begin to come out late next year. I think a lot of people like me are probably waiting and holding out for a Vista machine which I’m sure makes things tough for some of the OEMs in trying to build volume and will only get worse as we get closer to Vista launch.

Another thing that I’d been wondering about was with Microsoft’s strategy with the XBox 360 as an extender unit. In the past I’ve wondered about people who are big Media Center fanatics but non gamers. Particularly as Media Center takes off in the next two years and people begin buying multiple XBox 360s as extender units for their homes my thinking was that Microsoft very well could take a loss on sales to people who buy XBox 360s as extender units. Microsoft basically loses money on the hardware for every XBox 360 they sell. Estimates are that each XBox costs Microsoft as much as $715 per box to make. If, as a non gamer, I were to buy three or four for my home as extender units and never buy any games or online services it would seem to be a bad deal for Microsoft who makes up the hardware loss by selling you games and services with your XBox.

Sean said that this was not as bad as I might suspect though as there are many casual gamers out there. Sean also talked about ways that Microsoft could appeal to these casual gamers by offering things like legacy games that would strike a chord with games they played in their youth as well as the idea of introducing more non gamer type games like board games online. At Christmas my family and I played Trivial Pursuit as we do just about every Christmas. One problem we had was that we were using an edition from about 15 years ago. The questions are hopelessly outdated. I think it would be very cool for us to be able to either buy, or even on a one time pay per view basis, play Trivial Pursuit in our living room through our XBox extender. I think Sean is right and that as people begin to buy XBox 360s as extender units that Microsoft does find ways to market to the casual gamer. There certainly will be a select few that never do anything with their XBox 360s except use it as an extender box but these folks are just part of the cost of doing business.

I haven’t played games in many years but I imagine when I finally do get an XBox that I also may become a bit more of a gamer as certainly the graphics and play seems exciting. There are lines every day at the Microsoft booth with people waiting to play their XBoxes.