Microsoft Vying for Control of Your Living Room
Microsoft is making a big push to bring movies, music and more into your home. Does it have enough to topple Sony or will Nintendo steal the show?
July 30, 2008 by Richard M. Sherwin

About 20 years ago I did an interview with Bill Gates in which he claimed that he could make watching TV and enjoying pre-recorded or even live video events in the living room as easy as using his Microsoft operating system.

I laughed since the OS he was touting crashed repeatedly….and he winked. Shortly thereafter he made the same pitch to RCA (a top TV brand at the time), Philips and Sony. But these firms claimed that they wouldn’t get into a relationship in the living room because of their own initiatives. That’s what they said, but I believe that those companies turned down Gates’ gambit because of Microsoft’s horrible record for unreliability… a thought that’s reinforced these days whenever Vista or XP crashes.

Just a few years ago, in a meeting with Microsoft multimedia executives and HP, who were launching some less-than-ready-for-prime-time HP Media Center PCs and the less than effective Windows Mobile System, one of Microsoft’s hot shots swore that Microsoft would be a major factor in the living rooms of North America before 2002….and have some of the top TV makers as partners. Microsoft was on the living room run again.

But Microsoft’s continued reputation for inconsistent and unreliable software and hardware and their monopolistic practices (that controlled the operating systems for 95% of the world’s computers) caught up with them. Reportedly, Panasonic, Toshiba, Philips and even Zenith (now LG) turned down efforts by the Redmond computer giant to join forces with a TV-Internet based Microsoft run system. They were probably afraid of being eaten up.

It took six more years to make a marriage, and today some of Microsoft’s partners … such as the dreaded Linksys and D-Link…are not so famous. But they have also partnered with a reinvigorated HP and the ultra hot Samsung, both of which are marketing Microsoft Media Extenders (which put the content of a PC and the Internet right on to your TV). And Microsoft is poised to challenge Sony in another living room product category. Microsoft’s Xbox game-system content delivery service is itself a Microsoft Media extender.

Microsoft has recently added a cadre of business deals with entertainment services designed to shore up its Xbox 360 shortcomings and to make its somewhat disappointing Xbox Live system more popular. And, despite losing the battle between the biggest new content delivery platforms in years (as HD DVD died an early death), it seems that Microsoft is actually moving in the right direction.

Bill Gates is semi-retired and Steve Ballmer is busy running the company. Others in Microsoft have driven the first (possibly) successful foray away from its computer monopoly into a full fledged contender as Microsoft makes its case for moving its technology into the living room. Not just as a me-too move against Nintendo and Sony, but as a legitimate content delivery service that includes video, audio and the use of the Internet in a truly useable living room experience.

At E3, the Electronic Entertainment Expo (which really needs a face lift itself…more later), video game analyst and business expert Len Wanger said that Sony and Nintendo had some nice new software and other uses for their PlayStation 3 and PSP and Nintendo DS and Wii hardware.

“But I think for once people are taking Microsoft seriously,” Wanger says. “They have stumbled badly as a consumer friendly company thanks to their flawed offerings in hardware and software in the home arena. But now the Xbox may just be the all-around vehicle to get Microsoft into the living room with a new generation of consumers,” Wanger claims.

Bobby Orbach, President of Orbach Associates, a leading technology investment and analytical group, reminds us that there may be another company whose foray into the living room, as just a game system, could sneak past Microsoft, Sony and the rest of the entrees.

“Nintendo’s Wii, which beat out Sony’s PlayStation 3 and Xbox as an easy-to-use, easy- to-run game system for all demographics may take ‘Habit Compatibility’ realm (when consumers are so used to a product or service that they will buy anything new from that same company) to the next level by adding features that could soon make it a successful all content device,” Orbach warns. “And then, if history repeats itself, all bets are off on who may win the living room battle.”

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Richard M. Sherwin - Contributing Writer
Richard Sherwin is a former syndicated technology columnist and TV/Radio analyst, who has also been a marketing executive with IBM, Philips, NBC and a chief advisor to several manufacturers and service providers.

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