Maybe, but let's figure out if they're going to even enter it, first.
The rumor's been out there before, but well-thought-out connectivity of the Xbox 360 raised the possibility again -- but not as much as a recent Business Week article, with Xbox boss Peter Moore.
Though not confirming anything, Moore talked about the device needing to be more than "our version of the iPod." He also mentioned it could logically leverage the Xbox brand for gaming (in addition to audio and video) to push itself into consumers' hands.
Makes sense, since the digital media market is an exponentially larger opportunity than the handheld gaming market. And, with the recent Microsoft re-org that created the "Entertainment & Devices Division" (under Xbox boss Robbie Bach, and combined the "Home and Entertainment Division" with the current "Mobile and Embedded Devices Division"), this seems to be a no-brainer.
But there's some huge risk.
Though last year's launch of Sony's PSP significantly eroded Nintendo's stranglehold of the industry, that vertical market is littered with the bodies of other early competitors (Atari Lynx, Sega Game Gear, NEC TurboExpress, Neo-Geo Pocket/Color, Wonderswan Color), and recent competitors (Gamepark 32, Nokia N-Gage, Tapwave Zodiac, and arguably the Gamepark Holdings GP2X and Tiger Telematics Gizmondo). In addition, marketing a handheld just as a "gaming" handheld could limit the appeal to gadget junkies.
Also, Microsoft is in its second iteration of an uphill battle against Sony's PlayStation, which absolutely dominates the console market. That said, Microsoft wasn't supposed to even be a contender, and they're a solid #2 now, with Nintendo's a distant third (and likely to remain so in the next round. And now, with the launch of the Xbox 360, Microsoft has upped it's industry smack talk from "aggressively increasing market share", to "becoming #1" (though, to be honest, who trumpets 'We're #2!' as a battle cry?).
What Microsoft should not do if they enter the market is make an "everything device" that sucks at one or more of those things. Look at the Treo 600, with the 650 not much better, and the 700 looking to take a step backwards in at least screen technology, the only real benefit of the 650 over the 600. Microsoft could make an amazing handheld gaming machine, with sucky (or only proprietary-supported) video handling, and it could kill the system. Or, they could make an amazing audio/video device to compete with the video iPod, but but an Xbox 360 connectivity effort similar to their first-gen Xbox/Windows MCE connectivity, and kill the device there. Do one thing well versus a bunch of things half-assed. The iPod is so successful exactly because it does very limited things extremely well.
What Microsoft should do is pick discreet functions and do them incredibly well. Given the above, that may seem obvious. But what would set them apart is picking one or more small, discreet functions that neither Sony's PSP nor Nintendo's DS has -- so rule out VoIP, Web browsing, Wi-Fi, or touch screen (though except maybe for this last one, a Microsoft portable should have these features). They should think more along the lines of GPS, gyroscopic motors, and motion capture.
So, going back to the list of recent failures, what should Microsoft do (besides learn from their demise)?
They should buy, rebrand, and market the Gizmondo.
We'll get to the technical features and needed opportunities in a second, but from a business opportunity perspective, it makes sense:
- Just after Gizmondo released in America, a newspaper printed a story linking Europe Executive Officer Stefan Eriksson with the "Uppsala Mafia" (named for their city of operation), and Eriksson resigned (along with at two other resignations in connection with this case)
- One of the resignees, Carl Freer (Chairman of the board and a director), co-owned with Eriksson Northern Lights Software Limited, which was paid a chunk of change to create Chicane and Colors, two original and innovative IP Gizmondo games actually developed by Gizmondo Europe
- On the January 23rd of 2006, the UK based arm, Gizmondo Europe (GE) entered administration (the Brits' version of bankruptcy)
So, the acquisition pickings may be good (and I hope the Austin guys are OK), but the technical match is really good, too.
I've been thinking about this match since reading a preview article about the Gizmondo in the UK's Edge Magazine last year, where they played up many of the Gizmondo's features, and made an allusion to it being a "handheld Xbox".
To summarize some of it's features:
- Windows CE OS
- High-rez TFT screen
- 400Mhz processor, and Nvidia 3D co-processor
- Downloadable games
- 8-way D-Pad, left and right triggers, 4 face buttons.
- SD card support
- Integrated camera
- "Built-in Windows multimedia MP3 facility" (interesting ...)
- Windows Media Player 9 (again, interesting ...)
- SMS/MMS support
- Unique features
- Built-in GPS technology (good for gaming, location-based services, and probably directions)
- "Smart Adds" system lets advertisers deliver customized feature-rich content through MMS, and could arguably be extended with GPS ("don't you feel like going to the PF Chang's you're passing?")
- GPRS worldwide gaming
- Cool features realated to the camera. For example, in one demo, they took picture of stacked notebooks, and animated characters danced up and down the stairsteps. Talk about taking mod'ing into a new, handheld direction!
- Design -- Design has got to be damn sexy; think a version of the Xbox 360 controller with a screen
- Media -- At least Play4Sure compatible, but the more formats, the better (MPEG2/4, MP3, WMA, etc.)
- Connectivity -- If my Xbox 360 can recognize an iPod and a PSP, it damn well better recognize the Microsoft handheld
- Games -- Exclusive IP, and handheld-playable versions, and make the dilineating factors of the handheld matter to the games (GPS, GPRS, etc.)
- Partnerships -- Extend the relationships that have made Xbox 360 Live and Xblox Live Marketplace so successful, and extend the new DIRECTV/Microsoft partnership for content
- Controls -- Move the D-Pad down, add an analog stick above, and add an analog stick to the right side of the screen, below the face buttons
- Screen -- widescreen, and touch screen
- Sound -- Stereo sound
- Camera -- Megapixel or better camera
- Network -- Wi-Fi at least; I'm mixed on GPRS, because it seems kind of limiting with upcoming Wideband broadband ...
- OS -- A real OS (probably a bastardized version of the Xbox 360 OS, which is a bastardized versionof the Xbox OS, which is bastardized version of the WinXp kernel, which someone adamantly told me is a bastardized version of the Apple OS)