Watch Out for Microsoft's Army of 40 Millionhttp://www.fool.com/investing/general/2012/01/10/watch-out-for-microsofts-army-of-40-million.aspx Rick Aristotle Munarriz
January 10, 2012
Microsoft (Nasdaq: MSFT ) has the country's youths right where it wants them.
Critics may have walked away generally unimpressed by the software giant's final keynote address at the Consumer Electronics Show last night, but Microsoft did have some impressive stats to offer when it comes to its booming Xbox franchise.
It's true that 40 million Xbox Live users may not seem all that great compared to some of the bigger numbers out there. We're talking about just 5% of Facebook's 800 million users. Give Apple (Nasdaq: AAPL ) just two quarters these days, and it will sell more iPhones than Microsoft's gamer headcount.
However, when you approach Xbox Live as the television-tethered entertainment service that it is, the number is pretty darn impressive.
After all, we're talking about nearly double the more than 20 million global streaming customers at Netflix (Nasdaq: NFLX ) -- and that's no shot at the video giant. Netflix CEO Reed Hastings actually sits on Microsoft's board of directors. The country's largest cable provider or satellite television company only has a little more than half as many video customers as Microsoft.
There's power there, and Microsoft's youth-skewing demographics make this a lucrative audience for marketers and content creators.
No halo effect after Halo
It's not too late to get it right. It's Microsoft's grasp on 40 million gamers that made it a no-brainer for several pay television providers to team up with Microsoft last month to stream content for Xbox Live subscribers. Ignore this hungry crowd of Mountain Dew sippers, and they'll reach for the scissors and cut the cord if you're not playing their game.
Then we get to next month's move to introduce Kinect for PCs.
This isn't a slam dunk. The device will hit the market at $249 next month, double the price of the console-based Kinect controller. There will be special academic pricing at $149 for students and teachers, but not until later this year. In other words, pay up, early adopters.
Microsoft may outsmart Apple
Kinect may have been initially introduced as a gaming and fitness device, but nobody stands up when they're at a computer (well, unless they're at an Apple Store -- boom). Folks also aren't several feet away from their PC monitors the way they are from their TVs while gaming, so it's not as if folks will be buying Kinect on their computers for full-bodied interaction.
However, Kinect's ability to respond to gestures and voice commands is a game changer. If you think that Siri on the iPhone 4S would be a neat addition to Macs, Microsoft will already be one step ahead with a PC that recognizes both spoken commands and physical gestures. Bring in the tablet-friendly Windows 8 later this year -- and the inevitable touchscreen laptops and monitors that will play nice with the new operating system -- and you'll see that