Remember back last May when Microsoft launched their XBox 360 and I wrote about it being a "trojan horse" (the good kind not the bad virusey kind)? Well today Microsoft (NASDAQ:MSFT) put down another piece to their puzzle to dominate your living room. The piece this time is HD movie downloads for your XBox 360 through XBox Live.
And if Microsoft can pull this off, they will become the first major company to offer truly compelling HDTV video on demand.
So my theory goes something like this: The living room has been the Holy Grail for technology companies for a long time. After several failed attempts by several players, the technology is just about here this time. The key components needed are a PVR, ease of use (aka WAF), remote driven, stable, alternative home media options (photos, music, home movies, etc.), microcontent, and very much most of all HDTV content for all those fancy TVs you all are buying these days.
Microsoft's initial push was through the Media Center PC. And while somewhat successful (although don't believe the mega millions number that Microsoft frequently quotes, only units sold with TV tuners really count), the fundatmental problem with the Media Center PC is, well, it's a PC. And in general people not only hate PCs but they don't want them in their living rooms.
But... people do want XBox 360s in their living room, tv room, den, etc. And they are buying them in droves. So rather than the Media Center PC becoming the center of Microsoft's strategy to own your home, the XBox 360 is the new kingpin -- but not on a standalone basis, as a thin client.
What I mean by this is that everybody is waiting to upgrade their PCs. Why? Because we all know that Vista is just around the corner. And even if we buy a "Vista Ready" PC that Microsoft and Dell would love for us to buy, the reality of the situation is that even if you give us Vista free we just don't want to be bothered with the upgrade later. So we wait.
And while we wait Microsoft sells boatloads of XBox machines to have them in place in your living room so that when you do upgrade that PC (and you will), they can pitch you on a strategy to upgrade the PC to include a TV tuner card (an HDTV CableCARD ready TV machine) that will stream all kinds of beautiful HDTV content to that fancy new TV you bought via, yep, you guessed it, your XBox 360. What's more? Well now you can download on demand even more HDTV content directly with the XBox 360.
It's one more pitch that will come out hard when Microsoft pushes the big Media Center Vista story in January. And if they play their cards right they just might win the living room this time.
And meanwhile Apple (NASDAQ:AAPL) still flounders around having made no meaningful commitment to HDTV and instead is going to try and sell you the iDongle. But if the iDongle doesn't do HDTV and the XBox does, then the iDongle is dead in the water.
Related: Microsoft XBox 360 To Support HDTV - Challenge to Cablecos, Apple