by Playfuls Staff |
29th September 2006
By now, you are all familiarized with the fact that Microsoft’s iPod killer is set to be unleashed on November 14, at a price of $250. But what is the Redmond giant preparing to us AFTER its MP3 player comes out?[more]
So, Zune was considered from the beginning THE iPod killer. Few people thought at Microsoft’s entry on the digital music market as a commercial decision, instead considering it a direct declaration of war targeted against Apple’s dominant product. It was a matter of dominance, a position from which Microsoft was dethroned by Steve Jobs’ genius.
Once Zune MP3 player was officially announced, comparisons and speculations about its future began to appear, but the great majority of analysts estimated that Zune will not be the expected iPod killer, instead killing its former allies (for example, Microsoft chose Toshiba as Zune’s manufacturer; but Toshiba already produces an excellent MP3 player, the GigaBeat, which will eventually enter in competition with Zune. Not to mention that Microsoft teamed-up in the past with Creative, MTV and other Apple rivals, to end up now fighting against them on the same market).
Zune’s failure in the war with iPod was might not be so dramatic as estimated although the fight between the two will last for several years and, as Microsoft already admitted it, it will produce massive losses to the software giant (Robbie Bach, president of the newly formed 'Entertainment and Devices Division' at Microsoft, stated that although the millions invested are many, the profit will come out only after five years- which means we’ll be seeing Zune even in 2011…).
According to the high ranked official, such initiative is to cost "hundreds of millions of dollars in investment over time," making it a long term bet. He compared Zune’s case to the Xbox platform, which has also produced losses estimated at $1-1.2 billion to Microsoft, since its initial launch in 2001.
But all these investments might not all be destined to kill the iPod. It would be exaggerated to have those millions channeled for only one purpose, especially since we’re talking about a market where a lot of other rivals are competing and which, on one hand have never succeeded in beating the iPod, and on the other hand have been allies to MS until now.
It’s quite difficult to believe Bach’s comparison because when Xbox was launched (with loses) in 2001, there was only one big rival: Sony (with Nintendo considered trailing, but at a long distance). Microsoft knew one thing: beat the PS2 and you win! Now they are facing, apart from Apple, the MP3 players and their equivalent music download services launched by Creative, SanDisk, Sony and a bunch of other producers whom I don’t remember now. It’s not only about a single, powerful competitor but also about your ex-allies.
This is why considering the Zune MP3 player only the beginning for Microsoft is not so far-fetched.
It is actually Microsoft which admitted that Zune is a platform, not a single product and that at least two other devices are envisioned at the Entertainment and Devices Division, all under the Zune brand. When they officially recognized, after intense speculation, that they are planning an iPod killer, this is how they expressed themselves: “Under the Zune brand, Microsoft will build a community for connecting with others to discover new music and entertainment”.
“New music and entertainment” is obviously not only music. Of course, there are features at Zune MP3 that go beyond “simply music” like sharing photos, watching some short pre-loaded movies/videos, but there are no games! And this is interesting since even Apple introduced such feature (at a “primitive” level though) in its newest edition of iPods. It’s hard to imagine Microsoft just missed that point…
The idea of a PSP/Nintendo DS-killer thus comes in mind when we think that the Zune-branded products are apparently under the umbrella of the Argo project, which is said to be led by Corporate Vice President and the Chief XNA Architect at Microsoft, J Allard. Allard oversees all design and engineering for the Xbox console, peripherals, Microsoft's multiplayer online service Xbox Live, as well as development tools for video game developers.
These could be the arguments for a portable Xbox under the Zune brand:
1. the very definition of the Zune platform, according to Microsoft’s declaration, is based on “connected entertainment”. You probably know this, but people socially interact better when playing, compared to when they listen to music- a fact which I’m sure MS is aware of, since they already have built the strong Xbox Live community. But interactive mobile gaming is even more appealing to gamers, and PSP or Nintendo DS are fine examples.
2. although Microsoft has built until now equivalents for rivals’ products (Xbox for PlayStation, Zune MP3 for iPod) it does not have (yet) an equivalent for a mobile gaming console.
3. a portable gaming Zune would expand Windows Mobile’s popularity among customers that are now young and that will later use other handhelds (like smartphones). It’s like Bill Gates said about pirated copies of Windows: they will get use to the OS and will eventually buy it (only this time it’s rather about just becoming familiarized with Windows Mobile, which give MS an advantage when negotiating with handheld producers). Games for Windows Mobile sounds good?
4. since MS announced the XNA Game Studio Express program, an offshoot of the company's more robust XNA Framework, will be available for those who wish to build games for Xbox, it becomes natural to think that a game built for a portable Xbox (or Zune) is expected to be easier, cheaper and more appealing to enthusiastic gamers. This would make MS’s portable gaming platform more popular and would have a positive impact on the Xbox platform too.
5. the mobile gaming market is increasing both in profits and reaching, while production costs are dropping (for example, phones are considered the next-most important platform by developers). Sony and Nintendo already have exclusive contracts with giants like EA, Rockstar or Ubisoft for the production of PSP/ DS games- a source of profit MS cannot afford to ignore.
6. Peter Jackson signed a couple of days ago an exclusive contract with MS Game Studios, but he surprisingly declared that he will not exactly build games for Xbox or Windows, but try to go beyond that and reinvent gaming: “My vision, together with Microsoft Game Studios, is to push the boundaries of game development and the future of interactive entertainment.” Could that be linked to the “connected entertainment” that Zune promotes and be the sign of a portable Xbox?
There are also arguments against such initiative from the Redmond giant. The failure of Nokia N-Gage is one of them. The Zune-Xbox could also face the same problem as the PSP: Sony’s console plays music, runs movies, surfs the Net and last, but not least, plays games. But Sony also builds MP3 players, walkmans, MP3 phones in cooperation with Ericcson, which kind of confuses some customers. One solution would be to make the speculated portable Xbox solely a gaming platform (it’s this feature that ensured Nintendo’s stellar sells with DS, isn’t it?)
Until we’ll see the speculated ZuneBOX on the market (if we’ll ever going to…) we’ll just have to see how the $250 Zune MP3 player behaves and if it’s really going to be the famous iPod killer. And if Windows Marketplace is really going to compete with iTunes.
