xBox One – TV Blooper

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TV lets xBox One down but it is not Microsoft’s fault.

  • The xBox One has been revealed with great fanfare and while it’s a winner in many areas, it falls over when it comes to the integration of TV.
  • To be fair to Microsoft, I suspect that this is not its fault and that the intransigence and desperation of the broadcast industry is to blame.
  • The specifications of the device look pretty much in line with expectations with an 8 core CPU, 8GB RAM, 500GB HDD, Gigabit Ethernet and so on.
  • Kinect has been integrated into the console and offers voice as well as gesture recognition for issuing commands.
  • The included webcam is 720p so how Skype will be provided at 1080p is a mystery.
  • The controller has been updated to make it more user friendly and with more haptic feedback.
  • The real action is on the software and here things have changed substantially.
  • A thin virtualisation layer sits on top of the hardware and this allows two other operating systems to run simultaneously and for the user to switch back and forth between the two.
  • One OS is the xBox OS for the games and the other is a optimised version of Windows for all of the other functions.
  • This is exactly the right choice to keep the gamers and developers happy and at the same time bring in the new functionality in a seamless way.
  • These have been stitched together and optimised so that the user will not really notice that there are two.
  • The idea here is to deliver all aspects of Digital Life to the user in one place in a way that’s fun and easy to use.
  • Against that criteria, the xBox One delivers in the demos but real life is not going to be quite as good.
  • The biggest problem is the integration of television.
  • From the user perspective, it would have been great to see the tuner, programming guide and DVR functionality integrated into xBox One but this has not happened.
  • What the user is left with is the ability to connect certain set top boxes to the device via HDMI which brings in audio-visual and sometimes the ability to change channel.
  • The vast majority of users are likely to find that they are reduced to controlling the TV set top box via an IR blaster.
  • This is not integration. 
  • It is just sticking the xBox One on top of the cable TV which has been already tried many times. It fails every time because the user experience is awful.
  • I am sure that Microsoft is more than aware of this problem and would have fixed it if it could.
  • I suspect that has done the rounds of all the major cable companies to inquire about integration and been shown the door every time.
  • I am pretty certain that Google suffered the same treatment when it was developing Google TV. 
  • Integrating TV functionality into the xBox One is one step closer to the doomsday scenario where all content is delivered over the internet and broadcast is completely cut out.
  • Hence, TV is very unlikely to be integrated into the over-the-top devices for many years to come.
  • xBox One has done a poor job of integrating TV but the good news is that no one else is going to fare any better.
  • Microsoft is not going to suffer by being hamstrung by the TV broadcast industry as everyone is in the same boat.
  • Hence, Xbox One looks to be the right device to continue Microsoft’s leadership in the console market and as a base to begin its conquest of the living room. 

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.