Slow off the mark
Call me late to the game.
Thanks to some seasonal shopping mishaps involving nephews, games, and shipping difficulties, I'm now the proud owner of an Xbox 360 -- a good 12 months after the original launch. And after having set up the wireless networking features (a two-step process: plug and forget), plugging into Xbox Live, and seeing exactly what Microsoft's (NASDAQ:MSFT) console is capable of doing, I had only one response.
Wow.
Make that two responses: "Wow," followed by "Why didn't I know about this before?"
Double take
I'm not talking about games here. Yeah, my wife enjoys pounding the stuffing out of me in Electronic Arts' (NASDAQ:ERTS) Fight Night, but to me, the most amazing things about the Xbox 360 are the non-game capabilities. For a photographer like me, watching hard-won photos stream onto a 37-inch widescreen is just as impressive as sticking a sword headshot on a nasty, virtual foe. Getting instant, wireless access to a couple hundred gigabytes' worth of music and video (which now streams from Windows XP PCs as well) adds a lot of value to what I assumed would be merely a cool platform for killing time and monsters.
From where I sit, the Xbox 360 looks like the clear leader in the running to produce the digital-media home hub that Microsoft and others have been promising for years. Don't get me wrong, I knew the Xbox 360 could stream music from other Windows PCs in the home, along with photos and video, but I'd never seen exactly how simple the system has become, and how well it works. (Good news for those running Windows XP -- the Xbox 360 will stream your video now, too, so long as you install Zune software and enable media sharing.)
In fact, in light of the Xbox's current capabilities, I'm amazed that vaporware like Apple's (NASDAQ:AAPL) iTV can generate such enthusiasm. Aside from streaming all that media from your existing computers, the Xbox marketplace offers on-demand, downloadable TV episodes with one-click simplicity, in high-def or regular resolution, plus movies -- regrettably, rental only for now.
Where's the love?
Still, this is a major step forward from the overly hyped, overly complex media-center PCs from Dell (NASDAQ:DELL), Hewlett Packard, and others. I knew Microsoft had gotten this thing right when my wife -- no gamer and no real fan of complex gadgets -- could figure it out without a second thought. Clearly, the Xbox 360 has capabilities that would appeal to consumers outside the hardcore gamer market, and its physical position in the living room gives it some important advantages. Most importantly, the Xbox marketplace puts the media right where you need it -- at the TV. In other words, after the media has streamed onto the hard drive, there's no worry about network lag while you watch, as there will be with any of the streaming solutions out there, especially for high-def content.
Another major benefit, I'd argue, is that the living-room-induced couch-potato psychology makes it a lot easier for us to pay up for downloads than when we're sitting in front of a computer. And finally, the Xbox marketplace's seamless service interface is a lot slicker than Amazon's (NASDAQ:AMZN) ancient, Webified Unbox, and don't get me started on Wal-Mart's klutzy, physical-bundle, three-step download model.
Bottom line is, this is slick, easy, convenient, and a powerful way for everyone in the family to enjoy new media.
So, this Microsoft shareholder has to repeat that opening query: Where's the love? Why don't more people know about this? Why hasn't Redmond done a better job of promoting this excellent non-game content?
Need for greed?
On one hand, I can see why Mr. Softy wouldn't bother to spend too much advertising the Xbox 360 this holiday season. Boneheaded moves by the competition have handed Microsoft a historic opportunity to gobble market share without doing much more than ship units to the nearest Best Buy (NYSE:BBY) -- which has them stacked up on the floor in my neighborhood locations.
Thanks to limited production runs for the Sony (NYSE:SNE) PlayStation 3 and the Nintendo Wii, the Xbox 360 is pretty much the default game system for anyone looking for a next-generation console this holiday season.
But I also think Mr. Softy is missing an opportunity to broaden the Xbox 360's appeal beyond traditional gamers. If it were marketed as an entire media center for the living room, it might bring a few (million, let's hope) consumers off the fence -- and make some buyers out of people who never would have considered the console.
Microsoft really ought to take a page from the buzz around the Wii. This season's must-have gizmo is making waves as a new paradigm in the living-room game -- a product for everyone.
Bottom line
We all know Microsoft likes to start out slow in new markets, but I think the Xbox 360's on-demand and streaming media capabilities are impressive enough that the company should be hitting the accelerator. No need to sit back and let Apple collect all of the "ooohs" and "aaaahs" early next year when it releases iTV to the usual rapturous applause.
You've got the better product now, Mr. Softy. Flaunt it. First off, don't make me dig into the Xbox website to know what's going on. I'm not sure the PR and a bit of media coverage is enough to turn heads.
Next, how about running a few ads that downplay the bone-crushing tackles, the roaring space fiends, and Nazis spraying lead at the screen? Maybe try showing moms how cute their babies look when their photos and video are running on the 42-inch widescreen courtesy of that Xbox they thought they'd hate. Remind TV fans that their favorite bit from Chappelle's Show, Veronica Mars, or Pimp My Ride is only a click away.
Make sure that everyone knows the Xbox 360 is not just a hardcore gamer's toy, but the hub of the digital living room.
With the Xbox 360 console looking like it's no longer a loss leader for Microsoft, and a user base of more than 4 million in Xbox Live, this is a business that could soon make a real mark on the profit line. Take the message to the streets, Mr. Softy, and make it happen.
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At the time of publication, Seth Jayson was waiting for Microsoft to fix that stupid MS Points system and let his Xbox feed mobile video to his Zune. He was also long Microsoft calls and common, and had shares of Electronic Arts. He had no positions in any other company mentioned. View his stock holdings and Fool profile here. Fool rules are here.
