Microsoft’s Smart(Glass) Approach to Tablet Dominance

When I was at E3 this year I spent some time talking to industry leaders about Microsoft’s SmartGlass. This isn’t so much a piece of hardware, as it is an app. SmartGlass turns any android or iOS device into a controller/peripheral device for an Xbox. I was somewhat skeptical about this approach until after E3 was over and it sunk in. Tablets are the only growing segment in the consumer hardware market and they are expected to double every year for the next two years. Tablet sales outsold PC sales this year (a first) and this trend will continue. As the go-to device, the tablet and superphone will be the dominant technology of the foreseeable future.

Now as a console maker, I might find this growth combined with the declining sales of consoles very disturbing (which I’m sure they are). You could, as a console maker, try to compete head-to-head as Sony is with their portable players or the sure-to-fail Wii U GamePad but I think Microsoft’s approach is much... well, smarter. Instead of competing directly with the tablets, they’re leveraging their popularity (and adoption) to become the next peripheral device. More than that, they’re using these tablets to extend the functionality of Xbox to outside their console. Whether you’re watching a movie on the device, using it to provide behind the scenes info on the movie you’re watching on the TV or as a controller for an Xbox game, SmartGlass is connecting the value of their entertainment platform to the power of your portable device.

As with all new ideas, it’s not really the validity of the idea that determines success, as much as the ease of adoption. SmartGlass is a great idea, but its true test will be how Microsoft brings it to market.

For a complete outline of Microsoft’s SmartGlass go here. 

Chris Hennebery

June 10, 2012

Why the Next Consoles Will Be the Last

It’s kind of like in the Matrix when the black cat walks by twice and Neo says “huh”.  Déjà vu might be caused by glitches in the Matrix or in delays between visual and cognitive recognition, but when it comes to the releasing of new consoles, you’re right to think we’ve seen this before.  When the industry decided to release new DVD players (remember HD vs Blueray), many pundits spoke out at the obvious money grab by the hardware makers. Everybody knew the movie rental business was on its way out as more and more content was moving to digital distribution but that didn’t stop those hardware makers from having one more kick at the cat.

And now we’re in another familiar situation where console makers are left with one more swing at the gamer’s pocket-books. Whether its Sony’s Orbis or Microsoft’s SmartGlass, you can bet this next push will be a big one. And as it should be as it will be their last. While thanks to the Xbox Kinect, Microsoft only saw a 2% decline from 2010 to 2011, the Wii dropped over 28% and Nintendo is down almost 50% over the previous year. The entertainment hardware market is still strong at $18B a year but 11% of that was tablets and that’s expected to double next year. 

We all see the industry shifting: some of it back to PC and Mac but most of it over to tablets and TV. In the same way as the movie market had to shift from physical disk to streamed content, so will the gaming industry. Companies like Onlive and Gaikai will continue to make inroads with Telcos and Cablecos and the very thought of playing a game off a disk will be as ridiculous as going out to your movie rental store to pick up a blueray.

Chris Hennebery

June 9, 2012