Facebook on XBox 360

For a long time now, Microsoft has made the rather lofty claim that the company’s XBox 360 was the biggest social network on TV. For the most part that was in reference to XBox Live – the games console’s online service – and its integration with Windows Live Messenger, Microsoft’s cross platform Instant Messaging service (Windows, Mac and mobile). Yesterday, however, Microsoft announced at E3 that the XBox 360 will soon be adding support for two competing social networks – Twitter and Facebook – making the XBox 360 undoubtedly the most socially networked set-top box, but not necessarily a Microsoft-owned social network the biggest one on the television. I’m not sure how Windows Live Messenger user numbers and Facebook’s compare in terms of cross-over with XBox Live membership but it’s nonetheless significant that Microsoft has chosen to embrace two competitors.

Interestingly, the Facebook integration won’t be one way. Not only will XBox 360 users be able to access a Facebook application providing the usual functionality (status updates, view friends’ news feeds, photos etc), but XBox Live will also incorporate Facebook Connect so that various activities can be posted back to Facebook e.g. in-game screen shots and footage. The User Interface for the Facebook app could do with some improvement, reports Gizmodo, which isn’t surprising considering that the social network’s feature set is fairly extensive and is rooted firmly in the PC, making designing the perfect “ten foot” UI challenging.

In comparison, Twitter’s minimum core functionality looks much better suited to the TV (see screen shot) and, accompanied by the XBox 360 gamepad’s thum-board QWERTY add-on, could work quite well. Both services to be supported through a software update “this fall”.

Twitter on XBox 360

Other XBox 360 announcements yesterday of interest to last100 readers included improved Netflix functionality with full on-screen access to the service’s movie and TV show catolog, support for music streaming service Last.fm, and 1080p High Def content (download and streaming) through XBox Live’s newly branded video store now called “Zune”.

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New Zune HD

Microsoft today announced its latest Zune portable media player designed to go head to head with Apple’s iPod touch. Dubbed the Zune HD, the device features a 3.3″ 16:9 widescreen capacitive OLED with multitouch, WiFi, and a built-in web browser, along with existing Zune media playback features. Talking of which, the “HD” moniker refers to both HD Radio (offering higher quality audio and additional track and station data), along with support for 720p HD video playback. Interestingly, the device itself only offers a screen resolution of 480 x 272, meaning that High Def videos played back on the device are downscaled, which shouldn’t matter all that much on such a small screen. To view content in its full HD glory, the Zune HD features a HDMI-compatible docking station for plugging into a high definition television.

Of course to really take on the iPod touch, not only will the Zune HD’s web browsing experience need to up its game compared to existing Windows Mobile devices, but it would need to foster its own third-party software eco-system. Something that Microsoft hasn’t yet announced and it’s unclear if the company plans to do so, although I’m not ruling it out. Remember Apple doesn’t call the iPod touch a media player, instead referring to the device as the “first mainstream Wi-Fi mobile platform, running all kinds of mobile applications.”

(via Gizmodo)

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All of which seems perfectly plausible. Both the Zune and Danger teams fall under the company’s Entertainment and Devices Division, which also overseas the XBox 360 — Microsoft’s most successful foray into the consumer electronics space — and is all about what the company calls “connected experiences”. As I wrote at the time, it’s in this context where the Danger acquisition made most sense, with Microsoft citing Danger’s mobile Web browsing, instant messaging, games, multimedia, and social networking applications, which in combination with MSN, Xbox, Zune, Windows Live and Windows Mobile technologies, would help it deliver “industry-leading entertainment and communication experiences”.

See also: Microsoft buys Sidekick maker Danger; Zune phone rumors to resurface?

And while Danger’s expertise would certainly lend itself to Microsoft developing a consumer-facing smartphone, it would also signal a major change in strategy from Redmond, whose mobile strategy to-date has been to develop an eco-system made up of hardware partners who license the company’s Windows Mobile operating system. It has also been a strategy that has focused on the enterprise rather than consumer market, despite recent efforts by handset makers to put their own consumer lick of paint on the aging Windows Mobile User Interface.

But how would those partners feel if Microsoft released a phone of their own, playing the role of both partner and competitor? It wouldn’t be the first time, of course. After years of trying to compete with the iPod, and failing, through its PlayForSure ecosystem made up of third-party hardware makers, Microsoft decided to go it alone with the Zune, thereby becoming an overnight competitor.

Would Microsoft risk alienating its existing Windows Mobile partners in a similar move? That now looks like a real possibility and will likely depend on which strategy can yield the most profit. On that note, Dan Frommer from Alley Insider has done some back of the envelope math. By his calculation, if Microsoft could sell 1 million Zune-branded phones next year at a $300 wholesale price, it could equal the $300 million in estimated Windows Mobile revenue based on selling 20 million licenses.

“Plus commissions on app sales, a few pennies of search revenue from built-in Live Search, potential Xbox tie-ins, etc. Not the dumbest idea we’ve ever heard”, writes Frommer.

Agreed. Not a dumb idea at all.

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For a monthly fee of $14.99, Zune Pass subscribers get access to millions of tracks on a rental basis — once the subscription ends, access is shuttered — but with today’s changes they can also keep ten DRM-free tracks on a to-own basis to add permanently to their music collections.

Microsoft also announced that it will soon offer over 90 per cent of its music as DRM-free MP3s, compatible with almost any music player, including PCs and Macs, iPods, cell phones and game consoles. In other words, music downloaded for keeps via Zune Pass isn’t tied to a Microsoft device.

The new hybrid rent to own subscription model is the outcome of agreements signed by Microsoft with major music labels EMI Music, Sony BMG Music Entertainment, Universal Music Group (UMG) and Warner Music Group, as well as independent distributors INgrooves, Independent Online Distribution Alliance and The Orchard.

See also: How to save the Zune

Now call me old skool but I don’t want to keep 10 tracks per month, I want the full album instead, which could be less than 10 tracks or a few more. Otherwise I really like the rent to own concept that gives unlimited access to the complete Zune Marketplace catalog enabling subscribers to discover, sample and enjoy all of the music that’s on offer, and then over time build up their own permanent collection to enjoy on any music device, not just Zunes – forever.

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Rather than launching the third generation Zune to fanfare as planned on Sept. 16, Microsoft’s hand was forced when a partner — Ars Technica says it was the retailer Fry’s — “inadvertently posted a lion’s share of information” on the new devices, and Microsoft decided it might as well confirm the details.

All of this coming, of course, less than a day before Apple is expected to update its line of iPods with its usual special-event, hyped-to-the-max news conference.

The new Zunes include a handful of new features, none of which will erode Apple’s market dominance, but they are welcomed nonetheless. The first lets you buy songs over Wi-Fi, which you can already do on the iPod touch and iPhone through Apple’s iTunes Store.

Another feature allows you to buy songs you hear on the FM radio, something I would have liked 10 years ago, but now with the iPod (or Zune) who listens to FM radio all the time? The Zune also will be getting some music recommendation features, casual games, and a lower price for the Zune Pass subscription service.

Much of the third-gen Zune update deals with software and service enhancements, but there are a few hardware improvements as well. The top-of-the-line hard drive model now holds 120 GB and the flash model carries 16 GB. These remain $249 and $199, respectively.

Older Zunes, however, will see price drops: the 80 GB Zune will sell for $229, and the 8 GB and 4 GB models will sell for $150 and $130, respectively.

As far as the Zune’s “social” features go — the sharing of music between devices, for example — we see nothing new, which might have been enough to steal some attention tomorrow from Apple and its new iPods.

But, alas, no.

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With the iPhone taking away the mind space of the iPod, the Zune already seems to be in an orphan category with consumers. A sign of this is the recent high profile blowout when GameStop announced that they planned to stop selling the Zune. However, to me the surprise was that GameStop had been selling the Zune in the first place. I’ve been to several locations over the last year or so and I’ve never spotted one in a store. Perhaps the reason for this is that I was hunting to buy yet another Nintendo DS Lite and not looking for an MP3 player as a stocking stuffer.

In fact the only time that I’ve seen a Zune in the wild was while I was running through Kmart. Now think about that for a second: The biggest market for this device would be those hungry for music — tweens, teens and young adults. This market is very style conscience to say the least, and the one place they might encounter this device is in-between the linens and pantry items. Also the few times that I’ve seen representatives of the youth market at Kmart they were hunting for dorm room necessities rather than objects of entertainment.

The first problem with the Zune is it’s price point, which ranges from $150 to $200. This is a disaster as the iPod, which is seen as more high end, sells the shuffle for $50. Zune needs to be Pepsi to Apple’s Coke in this department and have their main product on the lower end of the cost spectrum. In fact, the best thing for Zune to do is to have a $25 model if they want to thrive in a recession based economy. On the low end, the iPod shuffle doesn’t even feature a screen, however, what makes it work so well is that it acts as a fashion accessory more than anything else. Zune needs to focus more on the form factor rather than the technology inside the device.

After having a low priced base model, the next for Zune to do would be to offer limited edition versions of the device aimed at specific niche audiences. These limited edition Zunes should feature co-branding and creative collaborations with both well known trademarks and fashion forward artists. For example, there should be a Hello Kitty Zune, or on the high end a limited edition Takashi Murakami Zune. Microsoft should also go after unfashionable males with both sports and comic book themed Zunes. And then instead of having a generic display at Kmart, these limited edition Zunes should be available at targeted retail locations and high profile events. So for example, you’d be able to buy a Iron Man Zune at the Sand Diego Comic Book Con much in the same way you’d buy a Star Wars Mimobot Designer USB Flash Drive.

Zunes should always come pre-loaded with music, in fact this would be a natural direction as the White Stripes and Nine Inch Nails have already released pre-loaded USB drives in the past. This could be taken to the next step by including music videos and exculsive audio interviews. In fact, Microsoft should collaborate with services that sell audio recordings to an audience after a concert. So instead of people owning just one iPod, a fanboy or fangirl might own several special edition Zunes that they’ve collected over the years like a beloved set of Swatch watches.

Also see: Zune 2: five things Microsoft did right

The one thing that Microsoft has done well with the Zune is with their creative online branding efforts. In fact their website is much more innovative than anything that Apple has done so far (just look at their wonderful use of commissioned animation). However, they need to push this to the next level by addressing social media — this is a bit of an irony as their initial tagline was “welcome to the social”. Microsoft needs to have an interactive presence on MySpace, Facebook and Twitter in association with well known musicians. HP for example has an engaging website in which they collaborated with Gwen Stefani to sell printers, if anything this sort of strategy would be much more natural to sell an MP3 player.

About the Author

Michael Pinto is the Creative Director of Very Memorable, Inc. a design firm that specializes in the youth market and interactive media. He is also the Publisher of Anime.com and Fanboy.com.

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