Well done, Microsoft!

Brilliant article on a brilliantly conceived and executed product strategy in Time Magazine about Microsoft’s Xbox which starts its journey as a gaming console and will conceivably evolve, over time, to become the ultimate digital entertainment convergence device : Out of the Xbox. Here is an excerpt from the article discussing what Bill Gates has recently learnt from Steve Jobs:

[“Baby Bill” J. ] Allard’s solution was a good example of un-Microsoft thinking. “Guess how you get great design?” he asks. “You don’t try to do it with computer scientists from M.I.T. You don’t try to do it the conventional way one would think about from a Microsoft point of view.” Instead, Allard hired a sculptor from the Rhode Island School of Design and gave him a long leash. The sculptor turned around and hired a dozen extremely expensive boutique design firms to each come up with a design for the new Xbox. He then picked two winners, one from San Francisco and one from Osaka, Japan, and made them work together to build something cool yet approachable–“inviting” was the key concept.

And they have hit the nail on the head this time, it seems – at least on the hardware side.

On the killer app side, the thinking seems to also be evolving in the right direction, to go after a broader set of segments, and away from the original focus on hard-core gamers:

But there’s still a significant demographic that for some reason doesn’t consider wiggling a joystick to pretend they’re shooting somebody a major priority in their lives. To woo this wider group, video games will have to get easier, more approachable, and they will have to expand into genres that don’t yet exist. Most video games are action movies. Where are the romantic comedies? And the dramatic weepies? “We’re not gonna get so everybody in the family loves this thing just with sports and shooters and racers,” Gates admits. “We’re gonna have to fund, both internally and externally, some high-risk genres and see if those can stick. We can’t just stay with the tried and true.” But maybe the new Xbox doesn’t need fancy-dancy games or new, risky genres. Maybe it doesn’t need games at all.

Finally, the more ambitious strategic thinking behind it all:

Let’s not miss what’s happening here. Microsoft, a company known primarily for making highly profitable business software, has put a box in your living room. It entered your house under the humble pretense of being a game machine, a toy for the kids, but it just ate your CD player and your DVD player, and it’s looking hungrily at your telephone. It’s all up in your media cabinet. It’s talking to your iPod, your digital camera, your TV, your stereo, your PC, your credit card and the Internet. It has created a miniature electronic ecosystem inside your home, with itself at the center.

This is why, Microsoft is still an impressive company … they don’t get it, they don’t get it, they don’t get it … and then, one day, they get it. And they get it right. Remember the browser war of the mid-nineties?