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Xbox IPTV Announced at CES

I love it when a plan comes together.

I’m here in Vegas and Microsoft (MSFThas announced that the Xbox 360 will be morphed into a set-top box, delivering IPTV like functionality. This is something I predicted almost a year ago, based on the fact it made sense and Microsoft appeared to telegraph this.

I’ve always viewed Cisco’s (CSCO) acquisition of Scientific Atlanta negatively for this exact reason. Cisco bought a stupid, cheap, commodity box with no backing service infrastructure. Microsoft can deliver a hardware product 10x superior to the set top box you and I have today, and tie it into all of the other computing and service products they offer- from Xbox Live to your windows desktop to your Outlook email.

I anticipate that this announcement will continue to bring focus to the Nyquist concept of the Third PC, as consumers begin to expect more from the hardware they connect to their living room televisions.

Microsoft has a raft of other interesting announcements. I predict that 2007 is the year the media stops kicking Microsoft and starts respecting them again as a consumer force.

Aside: As a result of my ceaseless focus on this issue this blog is the #1 search result on Google for Xbox IPTV. Use the search box at the upper right to dig through the archives.

I’m off to CES!

Discussion

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  1. IMHO, adding DVR functionality to the XBox is no different than having DVR on your PC. It’s just another thing you can do with the Xbox 360.
    To me, a 360 won’t replace a set top box given how much a 360 costs. My understanding is that Cisco didn’t just buy a “commodity box” but rather also the head end devices as well as the “video expertise” within SA. Cisco sells SA boxes to cable companies, who in turn provide them to cable customers. A 360 box can’t offer cable content. A person who uses a 360 for DVR probably isnt a cable customer so it won’t affect the number of set top boxes Time Warner, Comcast, etc. purchases from Cisco.

    Posted by quack724 | January 9, 2007, 11:12 PM
  2. Most of the revenue from SA came from the set top box business, and this was the reason Cisco bought them.

    The Xbox360 BOM is comparable to the BOM of a set top box.

    Posted by Andrew Schmitt | January 10, 2007, 1:04 AM
  3. This is one of the most uninformed statements I’ve heard in regards to a CES announcement. The STB business and the gaming console business are distinct. You are not going to see a telco or an MSO ordering millions of X-Box 360s to sit at the edge of their network. The statement that the BOM is similar is just plane wrong.

    Posted by Nitin Gupta | January 10, 2007, 10:16 PM
  4. I’m not sold on these multi-function devices. To me that the Xbox is a games box first and everything else second. If I wanted a cable box for movies, the games aspect would be a negative, because the kids would want to play on it while I want to watch a movie. Likewise as a games box, I don’t want them ordering movies on a games console I bought them.

    Apple’s TV looks better, but the DRM iTune movies are a real turnoff. My one experience of iTunes was when the son of a friend asked if I could rip his CD and load it onto his iPod because he didn’t know how. So I ripped his CD into MP3, plugged in his iPod, which announced it was sync to a different PC and so could not retrieve music, and that I’d need a newer version of iTunes, which in turn needed me to accept an EULA, which I read, which I rejected.
    So he didn’t get his music.

    Sooner or later the DRM bites you in the ass and you avoid DRM’d products.

    There’s also the privacy problem of linking devices, another turn off.

    Posted by Mr I Don't Like It | January 11, 2007, 5:48 AM
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