In the last few weeks there has been notable activity in the 2nd Screen space. Watchwith raised $5 million and ConnecTV raised $1.4 million. In the Discovery space, Matcha closed its operations while Squrl and Vidora launched consumer-oriented services. Yahoo bought Qwiki (for creating user generated 2nd Screen content) and Samsung acquired Boxee (presumably to attack the digital video end of the living room). And then over the weekend, billionaire Carlos Slim announced he was investing $40 million into Shazam to accelerate their pivot from a music service to a second screen TV advertising service. So while we have predicting that the space would consolidate (with some evidence that consolidation is taking place), there is enough market interest in the growth potential of the space to attract new investment and new services.
It’s getting harder and harder to pull apart “Second Screen as a Companion Experience” and “Second Screen as the First Screen Viewing Experience”. The living room and the tablet are converging so quickly.
- UltraViolet has 7m subscribers, but only carries 59% of the Top 100 titles and 50% of currently popular video titles
- Best Buy / CinemaNow launched a Disc-to-Digital beta last week
- Flixster’s iPad experience now has download capability–giving UV consumers the opportunity to travel (without a laptop)
- While HBO Go, Hulu, and Amazon Prime are garnering press, the traffic shows that Netflix out streams them nearly 30 to 1
- Netflix has now tied HBO in total subscribers (albeit with some international ones)
- Xbox is the underestimated player in the digital living room with 30m subscribers and a recent commitment to launch 40 new content channels
- The Wii U deployed multi-screen services for its platform and promises to combine it with its second screen controller and then “TV will never be the same”
While everyone know Netflix, Hulu, HBO Go, and Amazon Instant Video (as an app), have you tried Matcha, NextGuide, Flixster, or Plizy? Interested in case studies on great apps that help consumers discover and watch content on their tablet? Click here
Join us at the www.2ndscreensummit.com today at the Wynn (1-6pm, cocktails to follow).
- Contextual advertising. The holy grail for interactive advertising, allowing for placement of appropriate brand messaging not only based on demographics of the viewer, but based on what is happening on the first screen, reinforcing brands in immediate fashion.
- Contextual commerce. The opportunity to finally deliver the “Jennifer Anniston’s Sweater” use case by making buy (or want) clicks presentable with immediacy for the consumer.
- Enhanced contextual content experiences. Delivering relevant information to the consumer when it is happening (the background music, explanation of that geeky joke in Bing Bang Theory, links to actor bios and director’s notes, etc) creating a more compelling super-fan experience.
- Contextual and spoiler-proof social feeds. Imagine being on the West Coast and not knowing the ending to your favorite show just because you are following it on Twitter, and then taking that to the next level and allowing for asynchronous connected experiences where social comments are available at the right time during the programming instead of only working well when the programming is live.
- Advertisers. They need scale. Today that means a technology which can span across multiple second screen apps to pool enough potential consumers to have scale.
- Device makers and OTT content distributors. Would prefer to have a proprietary ACR capability, allowing them to create enough value for themselves in the chain to insert some level of control and attract a fee.
- Operators. Would prefer to continue to use the same scale systems they use today to manage their subscribers, but are unlikely to reach out to 3rd party apps and experiences.
- Broadcasters. Would prefer to team up with their advertising partners and find a way to create scale, focusing on the interactivity and data reporting this technology provides.
- Content creators. Would prefer to have the best experiences for their content, focusing on fail over techniques when preferred methods are not available and to develop a system that allows them to publish to many ACR systems with as little cost as possible.
- Audio driven ACR will continue to remain the most prevalent. It is relatively cheap and easy to deploy, even though it is perhaps the least effective at the consumer level.
- Stream capture (NOC) ACR will begin to deploy in the industry. Advertisers and broadcasters will team up with a few 3rd party technology and service providers that can create a triggering system that multiple apps can easily adopt and deploy.
- Video driven ACR will begin to deploy, with systems in the devices working to using video finger printing to create event triggers—but this will face the same scale problems in 2013 that multiple second screen apps present today—lack of a large install base.
- “OS level” ACR will create a digital video ecosystem arms race. The industry will quickly realize that Xbox already has 40m+ active installs in the U.S. and that its SmartGlass platform gives it an immediate capability to deploy “OS level” ACR to any and all content (video, music, games). Netflix, iTunes, and Google Android will not sit idly by to watch this unfold and will deploy systems of their own in early- to mid-2013. The majority of Pay TV operators will be caught flat footed, with Comcast and DirecTV leveraging their currently very capable second screen apps to respond by late 2013 or early 2014. However, the challenge this leg of the ecosystem war presents is that is requires and ability for the platform to work with multitudes of developers through a well-structured SDK and publishing system. iTunes is already set up for this, as is the Google Android system. Microsoft has already deployed an SDK and already has a publishing platform for Windows 8 phones, but Netflix will be the most challenged to respond in this fashion. Additionally, the Pay TV operators will struggle to engage in this manner, preferring to attempt to develop solutions internally and to closely guard APIs as the gatekeepers rather than the marketplace operators they could become.
- To Control. While perhaps the hardest to monetize, this is the most important feature for device makers and those hoping to win the digital video ecosystem war (see 9 and 10 below). Recurring app usage starts with utility.
- To Discover. Trying to find content to watch, with many in the ecosystem seeking to influence that decision through some form of advertising.
- To Enhance. This will come in the form of a) searching for or receiving additional (perhaps synchronized) related information to the program and b) second screen-based commerce (a subset of M-Commerce). Just a few weeks ago, Nielsen reported that of consumers using a tablet while watching TV, roughly 40% are using them to check information related to the program and 29% of 25-34 year olds are shopping while watching TV.
- To Share. Already hyped in the press to the nth degree, expect to start to see attempts to measure how impression affect viewership across demographics and how they influence others decisions to view content.
Last week, the Dark Knight Rises finally entered the Blu-ray/DVD and digital download window for consumers. While I am warming-up to the concept of “owning” a digital title on Xbox (portability issues still remain), I was very interested in digging into a premium experience on their new SmartGlass second screen platform. It delivered premium and then some, offering what I think is currently the best UX to date for a movie companion second screen experience.
When you play the movie after purchasing on Xbox Video marketplace, SmartGlass (on your tablet or smartphone) automatically recognizes the feature that is playing and looks for an enhanced SmartGlass experience (no need to install a movie-specific app on your device). Similar to Blu-ray experiences for other movies, SmartGlass lets you perform all of the obvious remote control use cases (skipping chapters, pausing, syncing the movie to your point in the SmartGlass or syncing SmartGlass to where the movie is, etc) and has all of the great Stimulating rich, related metadata you would expect (character bios, director interviews, behind the scene videos, etc), but where it really out shines other movie companion experiences is in the UX behind the Enhanced Stimulating experience. To this point in the industry development, most well-designed experiences have been smart enough not to inundate the consumer with too many synchronous events, usually waiting at least 45-60 seconds in between events, often broken up by scenes. But the Dark Knight Rises experience took this to the next level, grouping 6 potentially engaging experiences together in a chapter UI, giving the consumer the option of where to explore during the chapter, and then opening 6 new experiences when the next chapter begins (synchronously). This allows for a few improvements from the consumer’s point of view:
- The consumer gets to choose when and what to explore (within the chapter). This means he can disengage at different points then potentially anticipated by the experience developers and can choose what interests him.
- There is not an overwhelming choice of possibilities (6 choices is thought to be potentially optimal in the decision making process for a UX).
- Simple. Great remote control features and synchronization capabilities with the feature. High.
- Seamless. While SmartGlass itself offers the Xbox Video market place, Vudu and CinemaNow for this feature, the in-movie experience doesn’t need to offer other content locations (you already own it on Xbox by then). None.
- Social. The ability to share in the Xbox world is still there, but it is much less obvious how to share to Twitter or Facebook or gain access to their previous comments. Low.
- Stimulating. In spades with a great UI.
- Discovery. The app offers related content suggestions before you hit play (which makes sense).
Last week I had the opportunity to moderate a second screen panel and attend several other panels and presentations at the Variety Entertainment App Summit in LA. While I greatly enjoyed the panel on second screen monetization with YuMe, Magic Ruby, Cinram/1K and MTV, I thought the most eye-opening session was the presentation of Microsoft Xbox SmartGlass by Mark Turner. While I had seen Ron Pessner present something similar back at a 2nd Screen Society in NY last June and I had been playing with the platform at home for the past 2 weeks (and even ), somehow the epiphany of just how big this could be for the entire second screen ecosystem had escaped me. Let me talk you through the key points they get me excited and explain why I spent this weekend re-exploring the platform at home.
- Nearly 60m Xbox consoles have sold worldwide, nearly 40m of them believed to be in the U.S. Half of those Xbox consoles subscribe to Xbox online services–even if we use the same ratio as installs to be conservative (the U.S. rate is likely much higher), that gives Xbox more than 20m homes in the U.S.–roughly as many as Comcast or Netflix.
- Microsoft’s stated goals with the second screen platform are to enable 1) Discovery and Control, 2) Immersive Entertainment, 3) better Gaming.
- Principles as stated in a slide by Mark:
- 1) Connect via People and Content, not devices. There are only 5 different versions of the platforms in terms of UI: Android, Microsoft Windows 8 PC/Tablet, Microsoft Phone, iPhone, iPad
- 2) Each screen magically tunes to me. This is a REALLY BIG deal and we will talk about this most of the blog.
- 3) Each screen as a “superpower” and the 2 screens cooperate together.
- 4) There is a clear focus at any given time between the screen.
- 5) Every second screen experience provides and end-to-end consumer experience.
- Control (Simple). Tuning required (esp on iPad version). Better feature control of the Xbox (editing playlists for music, for example), dropping music into a upcoming queue, etc.
- Enhanced or immersive experience (Stimulating). The basic experience could be readily improved in breadth and depth just by implementing a scene-level metadata solution (see Digitalsmiths) for every title, and the metadata set for the scene level objects need to be extended (too cursory when compared to Fanhattan or IMDB).
- Discovery. Currently, this is very rudimentary (a collaborative filtering approach). There are 3rd party discovery engines out there that could quickly improve the feature set, but they also need to import my existing effort in the social world (my Facebook likes) and leverage the concept of multiple sources for their partners Netflix and Hulu. I realize it may be counter-intuitive for Microsoft to launched you to Netflix for a title where they make no money vs. their own version of the same title, but they are not trying to make $0.30 on a rental, they are trying to gain a subscriber who becomes loyal to their ecosystem.
- Social. Mark did spend a significant amount of time on the concept, but I left it out up top because it is a closed, Xbox only approach. There is still nothing that allows me to leverage my other social networks in the “real” world. This, similar to my comments on leveraging other sources of content, is counter-intuitive, but if you want me to switch to Xbox for the majority of my needs, you need to solve this.
- Content. The only major drawback in both the music and video content for Xbox–I cannot take it with me. I like to purchase/own TV and Film and Music in my Apple ecosystem because I can watch it on a plane, use it while traveling, etc. This is a must have for the Xbox ecosystem to take on Apple.
- Cable/Telco – MVPD / Pay TV Operators. So far, DirecTV and Xfinity lead the way, but are a generation behind this “OS-level” concept of ACR for all content in the ecosystem.
- Apple. Obviously we will never know what they are working on until it is out, but so far, it looks like Microsoft has them flatfooted.
- Android. Has a long, long ways to go to create a living room ecosystem, though GoogleTV offers them that chance, but they need tighter integration with various players in the chain (the CE players).
- Amazon. Has announced “X-ray” for their Kindle Fire HD titles (gives some enhanced experience with related metadata), but this has yet to progress to titles delivered to other non-Amazon devices and into the living room.
- Sony. Seemingly asleep, though they own all the right tools for this (Gracenote, Playstation, portable devices, phones, etc).
Microsoft has continued to develop the Xbox platform into an entertainment convergence powerhouse that has migrated from the family teenager’s bedroom or basement into the living room. They made a significant leap with Kinnect in the gaming world in early 2010, and then earlier this year launched a video and menu navigation system that leverages voice and Kinnect and even leverages their search engine Bing.
Then this spring they announced with a ton of fanfare, lead by Balmer himself and in LA of all places. While they have continued to follow-up on that with Windows 8 phones and tablets, a formidable device and ecosystem approach in its own right, their greatest weapon for winning the living room battle may be their second screen development platform SmartGlass.
Ron Pessner did a great presenting Smartglass at our 2nd Screen Summit in June in NYC. He covered some great gaming demos and a demo for Game of Thrones for HBO that showcased some of the high profile uses cases for the technology.
The platform itself launched to iOS app store on November 7th, 2012, giving iPhone and iPad users a chance to try out the app. When you launch the app, there are some introductory videos on how to use SmartGlass which were in fact very helpful and well-placed for first time usage.
I tried out the SmartGlass platform on both my phone and my tablet. I felt like the phone experience was better for quick navigation (much faster access to recent applications like the Amazon Video app or Hulu than the motion, voice, or even game controller-based remote system), but I thought that the tablet experience was better for the companion experiences and for attempting to use as a navigation aid (swiping with control was harder with the phone UI).
The actual swiping itself and touch responsiveness of the app requires some tuning. In some places, it was too sensitive and would literally fly across multiple screen when I was trying just to move right or left by one tile. In other places, I could not get it to swipe or move one tile left or right. I also found the swiping itself counter-intuitive to the typical tablet control where you use your finger to drag the content across the screen (same with Xbox motion controls by the way), but in the first version of SmartGlass, to move right you drags your finger right like the old mouse pointing devices. I am betting they will reverse that soon to match their motion control system soon.
While using to navigate the menu had its positive and negatives, the companion viewing experience while watching a movie was a good indication of what was to come in the future. It was not exactly clear which titles in the Video store carried this feature, but I got lucky with my pick of the Amazing Spider-Man and got to test drive it. It behaved for control similarly to many Blu-ray-based second screen apps today, showing me chapter pictures and letting me use it for control (skip to chapters, trick play, etc). It also had a Stimulating feature allowing me to see which actors were currently in the scene with brief bio links (this could be much better). While the experience was a good start, they could certainly improve both the depth and breadth of the companion viewing approach, but they are headed in the right direction.
In conclusion, I would say this is actually a pretty strong delivery for a company that announced something in May, has bootstrapped a second screen development platform and SDK, and has revision 1 capabilities in the marketplace by early November (when I recorded the experience). There is much to be improved upon, but I think they should be applauded for the distance they have already covered in such a short time.
Ironically, the day before this is set to publish, there is an article about an update to the Xbox the changes some functionality in Smartglass…will get back to you soon.
Covering the 5 major feature sets:
– Simple. High. Great control of the 1st screen, giving me the ability no only to choose content and manage playback in multiple ways, but allowing me to quickly and easily launch other video apps and control those as well.
– Seamless. Low. The search is only Microsoft’s video search or Bing, but there is no integration across Hulu, Netflix, etc, allowing you to launch directly to a title app (one of the better features of GoogleTV for example).
– Discovery. Low. The hooks are all there, but currently there is only rudimentary recommendation based on some lists and some level of collaborative filtering.
– Stimulating. Medium to High. Well on their way to creating a great enhanced viewing experience–can’t wait to see how they manage this in the gaming world.
– Social. Low. They have their native chat/friends system, but no integration outside of that, no way to view other social network activity.
Rick Liebling of Y&R moderated a great panel of second screen industry experts yesterday in the NASDAQ Market Site in Times Square, largely focused on the impact second screen potentially has on the advertising space.
His able-bodied panel was represented by David Pugh of Magic Ruby, Joe Inzerillo of MLB Advanced Media, Jordan Berkowitz of Ogilvy & Mather, Sue Kaufman of Group M and Brody O’Harran of Microsoft Xbox–a great cross section of the burgeoning industry.
Rick waded into the session with a question about the longevity and reach of this second screen phenomena. The panel pointed out all the current salient points: great content on the first screen, a great user experience, the challenge of passive viewing (engrossed in the first screen) and interactive viewing (perhaps the next generation), and the importance of the context of the experience (from the consumer’s point of view). Sue pointed out that while some content creators struggle with the concept of purposely distracting their viewers, many advertisers view this as a means of stealing back the viewer’s attention from Angry Birds and other casual games and getting them engaged into the show and the advertising.
Brody gave some interesting perspectives on how seconds screen will play in the Microsoft world, with SmartGlass and Windows 8 just around the corner (late October). Expect the interactive capabilities to be built into the experience, all the way down to the 1st screen capabilities and into the games (allowing you to choose your NFL Madden play in a manner that for the first time prevents your living room opponent from seeing your choices, for example).
When the discussion turned to how the various players in the segment want to engage with advertising agencies, the conversation quickly got interesting. Dave pointed out that his firm doesn’t seek to replace the first screen advertising, but rather to enhance it and help it be both more targeted and contextual (giving examples of how that might with in their Fox Sons of Anarchy app). Joe had some great insight for the room, describing the “check box mentality” of many players in the industry as the real enemy of the future of second screen (where app developers/sponsors rush to have an example from major feature sets like Social just to have them)–and with 6m app downloads and the highest Apple grossing app ever, Joe and the MLB certainly have taken the pains to get the At Bat experience right for their consumers (in multiple user experience scenarios). Sue brought the discussion upstream towards integrated brand management and presentation, tying multiple engagement approaches together.
When asked what it will take to truly drive these opportunities forward for clients, Jordan had perhaps the most prescient quote of the day, “Second screen isn’t a channel, it is a behavior.” And while Dave and Joe exalted the value of simple, clean technology capability to propel the space forward, Sue reminded everyone of the holy grail of the advertising community–the opportunity to create engagement with the consumer on the sponsoring brands in discrete, actionable and measurable experiences. And then Joe brought us back to full circle in the way only someone from such a successful second screen franchise can, reminding all of us not to lose sight of just how hard it is to creating meaningful, engaging experiences for consumers and that experimentation will be required along the way.
A power-packed session if there ever was one.
If you are in NYC, there is another panel this afternoon sponsored by the 2nd Screen Society at 3pm at the NASDAQ Market Site (4 Times Square, NYC). Should be another engaging session.
And while everything demonstrated was admittedly demo-code, Ron Pressner did an excellent job delivering an eye-opening view of the potential of the platform that they are building for developers. Imagine being immersed in a complex role-playing game (RPG) and using your smart phone or tablet to look at the map or get more details on the kinds of characters and adversaries you face. Imagine singing karaoke and being able to search for songs and queue them up while someone else is singing (seems so obvious that you wonder we ever lived without it). How about a homerun game where the pitcher traces the path of the pitch on their smartphone that then becomes the pitch for the player on the Kinnect-driven console or watching your favorite movie and having a constantly updating set of actors bios on your smart phone or tablet–or better yet, a fly over map that updates based on where the scene for the Game of Thrones currently is, with all the lore and mystique of the location tied in for you in real time. More exciting for the industry–Microsoft is building a platform with an SDK to facilitate 3rd party development.
So stay tuned for more sessions similar to last week’s NYC show with our engagement planned in September at IBC. And if you haven’t seen our twice weekly news summary, shoot me an email chuck@MESAlliance.org and I will ensure you get added to the list.
Apple with its iPad, Apple TV and iCloud for movies and TV shows has delivered a seamless ecosystem to the consumer’s digital living room for owning and watching content from multiple devices in the home. The rest of the industry (SmartTVs, connected devices, Android tablets) struggles to create a similar experience when they are a single-brand ecosystem and fail miserably when there are devices from multiple manufacturers in the household.
How can the industry work to solve this problem? Part of that solution is UltraViolet. As discussed in previous blogs, the concept is that someday I will have the same experience as the Apple ecosystem (buy a movie with the UltraViolet feature and have access to it from every device I own). The reality today is that none of my SmartTVs or connected devices (except my iPads and PCs/Macs) can stream content from Flixster, some have access to Vudu, but if I purchase on Blu-ray I can use “sneaker net” to carry the disc from room to room.
But perhaps more important than UV is a better connectivity approach to the digital living room itself. The challenge here is that DLNA is not enough. Assuming I have a pre-sorted directory on my PC where I can access that I am looking for is a bad assumption. The majority of SmartTV companies have been busy building their own proprietary approaches to solving this problem (with and without partners). Boxee is trying to solve this problem, but I think its focus on a 10-foot remote experience limits its capability to do so.
I think the best way for the consumer and for the device manufacturers to move forward is for the device manufacturers to focus (similar to LG) on exposing their devices via APIs to applications on tablets (second screens) and local (home movies) and over-the-top video services (Netflix, Hulu, Vudu, Amazon, VDIO, M-GO, etc). This allows Second Screen apps (think BuddyTV, Dijit) to deliver the “Simple” capability to control the large TV (1st screen) and deliver the selected TV show or movie to that 1st screen (or tune the channel), but also provides a more natural interface (2-foot remote, touch screen, virtual keyboard) for “Social” interaction, review of “Stimulating” content and “Discovery” of new content, and providing the “Seamless” delivery of the source of that content across services so that it can be delivered directly to the viewing screen. This then gives the consumer the capability to buy devices (Boxee, PS3, Xbox, Blu-ray players) and Smart TVs from different manufacturers and still have a robust alternative ecosystem that is similar in capability to Apple’s.
And this approach is an urgent requirement for the industry because the consumer will not wait much longer to improve their own digital living rooms.
Let’s face the facts. If the iPad tablet market share holds in the 90%+ range, consumers are going to start buying Apple TVs (Tim Cook described them as iPad accessories), which will obviate the need for SmartTVs and other devices almost entirely:
- removes the need for Blu-ray players since the Ultraviolet experience is built-in to iCloud for the Apple ecosystem
- removes the need for SmartTVs as Apple TV connects to HDMI
- removes the need for other devices for streaming services with Netflix, MLB.tv, etc, on the AppleTV product
- leaving only the home movie challenge which Apple then solves with their iMovie and iPhoto products.
If you don’t believe this is urgent, check out my recent experience at home below:
I have had a frustrating last few weeks with my Apple Ecosystem at home (AppleTV, iTunes on a Windows PC as my main library, 4 iPads & 4 iPhones for a family of 4–by no means ordinary in penetration). Apple’s latest 10.5x change to the iTunes software has a bug in it that requires you to turn off IPv6 in your network adapter of your Windows 64-bit PC (guess how long it took me to figure that out?).
So for those few weeks, I was forced to deal with the “average” digital living room in my attempts to share and watch content in my home. I am sure most Americans have 3-4 TVs in the house (so say the statistics) of different brands plus a gaming console or two and various connected Blu-ray players. In my house, we have a Boxee Box, an Xbox 360, a PS3, 3 “SmartTVs” (a Samsung TV, an LG TV, and Panasonic) and another connected LG Blu-ray player. We typically use Vudu to rent movies (better experience than Apple in Discovery and delivery in real-time) on the PS3 or Boxee, we watch “high end” TV on the Apple TV (series not yet available on Netflix or Hulu), and watch all other content either live or DVR’d from our AT&T U-verse or from iPads/other connected TVs/devices via Netflix or Hulu+.
What a mess.
Our digital living room experience at home a few weeks ago (and going forward since I fixed the IPv6 problem) was that for special movies and TV series, we would buy them, and they would download automatically into the main library where everyone in the family had access to them forever more from iPads or the Apple TV (using local delivery or the iCloud). Home movies that were already in .mp4 were also available to those devices.
During the “time of digital failure”, I tried using the DLNA capabilities of the various devices including Boxee, PS3, and my TV-connected PC to watch home videos or non-DRM’d content (outside of Netflix and Hulu+). I think all of you probably already know how painful this was. Boxee is probably the best at being able to decode multiple formats of personal home video (Canon camcorder, Canon DSLR, iPhones, etc), but is difficult to use to browse and find content (as we shoot and store video). The PC which houses everything is just not built for a 10-foot remote experience (yes I have tried to font changes, I have a Logitech mini-keyboard, and even occasionally us LogMeIn from a laptop instead to control it).
The experience was so painful, that we actually purchased a few movies on Vudu as an experiment (can’t download to the iPad, but you can stream) and had another push on Boxee for home movies. Ultimately, it was the “stick” that drove me to fix the Home Sharing bug Apple created.
Highlights from videogame console makers’ press events at the E3 Expo in Los Angeles:
Sony: In welcome news for 3D home entertainment developers, Sony Computer Entertainment said it planned to “break the mold on 3D pricing this year” with a $499 bundle that includes a 24-inch, PlayStation-branded 3D display, along with a pair of active-shutter glasses, an HDMI cable, and a copy of the upcoming “Resistance 3” videogame (via PC Magazine).
In related news, analysts are anticipating that Sony’s forthcoming “Uncharted 3” could be the videogame industry’s watershed 3D title (via The Hollywood Reporter). The game, developed by Sony-owned studio Naughty Dog, is set for a Nov. 1 release.
Sony Computer’s Jack Tretton also took time during the company’s press conference to reiterate his apology for the data compromises that the PlayStation Network suffered from hackers in May.
Nintendo: The company’s “Wii U” system, set for release in 2012, will employ a motion controller that itself houses a 6.2-inch touchscreen. Nintendo thus looks to add new second-screen functionality to game developers, while incorporating some tablet-to-TV tricks for sharing photos and online videos.
Wii U games will ship on high-density, 12cm optical discs, but the disc format will be proprietary and not based on Blu-ray, according to reports.
Microsoft: The Xbox 360 maker has offered few details of its promised live TV integration later this year. The company also plans to offer YouTube video playback via the system, along with voice-activated Bing searches for TV shows and other entertainment content (via Variety).
Making the announcement today that it would acquire Internet communications company Skype for $8.5 billion in cash, said that Skype would support a range of products, including Kinect video game sensors and Xbox consoles connected to the Xbox Live service. Skype currently counts 170 million monthly users worldwide, although The Wall Street Journal points out that not all users make video phone calls with the company’s voice-over-Internet-protocol technology.
With the standard edition of Microsoft’s “Halo: Reach” selling for $60 and a premium version selling for $150, the total number of copies sold likely ranges between 2 million and 3 million, estimates the LA Times.
Microsoft had expected that the new videogame, released Sept. 14 exclusively for the company’s Xbox 360 console, would best the first-day performance of 2007’s “Halo 3.” But it’s unclear whether it did so.
The $200 million figure — announced by Microsoft Game Studios VP Phil Spencer at a Tokyo videogame conference (via ) — includes European sales. Following the launch of “Halo 3,” Microsoft said that game had done $170 million in sales on its first day in the U.S. alone.
“Halo: Reach” developer Bungie tweeted yesterday afternoon that the new videogame had already surpassed the previous franchise installment’s record for concurrent unique users on Xbox Live (via ). The company did not disclose a specific number. Publisher Microsoft expects “Reach” to surpass disc sales of the previous game in the series, “Halo 3,” which moved some 5 million units during its first week of availability in 2007.
Microsoft it will offer some 60 Xbox videogames on mobile phones running its Windows Phone 7 operating system, as part of a holiday-season push for mobile content. Wedbush Securities analyst Michael Pachter tells the that games are the “killer app” for smartphones in general, and are driving user upgrades; in terms of the number of game titles offered and downloaded (including free titles), the overall mobile games market is on par with the packaged videogame market, Pachter says.
Windows Phone 7 users will be able to connect to their Xbox Live profiles and play games against friends on the cell network. has a hands-on preview of the service.
Microsoft it will market the Kinect motion/voice sensor in November as a $149.99 accessory for the Xbox 360 console. The company also will sell a new version of the Xbox 360 system bundles with Kinect for $299.99.
The pricing matches pre-announcement reporting by game blog – which earlier this month quoted analysts as stating that a price point over $100 has potential to “severely limit sales.” But the price might be OK, Wedbush analysts Michael Pachter and Edward Woo said, if Microsoft expects constrained supply during launch.
Sony’s rival motion control platform for PlayStation, the Move, arrives in September with a price point of $99. That price includes a camera, controller, and Move-enabled videogame.
Microsoft and other videogame publishers are expected to unveil more than a dozen titles this week for Kinect, the hands-free motion-control platform for the Xbox (formerly known as Project Natal). On Sunday, Microsoft revealed the Kinect brand name, promising more details at its e# press briefing today. In the meantime, PC World has a roundup of Kinect news tidbits — including a report that the platform will launch in November.
The current generation of videogame console hardware has outsold the last by more than nine million units to date, according to the NPD Group.
Overall console hardware revenues declined 13% during 2009, a year that saw significant price drops on Sony’s PlayStation 3, the Nintendo Wii, and Microsoft’s Xbox 360. The price cuts have spurred unit sales growth, however: overall hardware sales for the month of December increased 16% year-over-year.
The month was the first in which Sony — which reduced the price of the PS3 by $100 in September, to $299 — sold more than one million PS3 consoles. The Wii, whose price fell to $199 ahead of the holidays, also experienced its biggest-ever sales month in December, with 3.8 million consoles sold. NPD
The synchronization of videogame hardware and software supply chains has become a unique operational challenge, considering the high costs and long lead times of game development, along with increasingly shorter product life cycles and shifting retail marketing strategies.
Owen Roberts oversees North American Operations of Microsoft’s Entertainment and Devices Division as General Manager. During his 11-year tenure with Mircosoft, Roberts has spearheaded the European launch of the Xbox console, and bridged gaps between the company’s various business units and worldwide retail teams as head of the Redmond-based “WW Retail Go to Market” initiative.
MESA: How did the economic crisis impact supply chains in 2009, and how did you meet these challenges?
Roberts: The number one challenge was inventory management, as retailers shrank their open to buy and managed inventory down. Clearly we did not want to lose sales, so we had to engage with the retailers to ensure we had sufficient inventory on shelves. Intense collaboration between the supply chain team, sales and category marketing, and the retail buyers themselves resulted in high in stock percentages while turns increased.
Obviously this could have had a negative impact on our fulfillment costs, as we were essentially doing smaller deliveries more frequently. However by planning with our warehouses and logistics each week we were able to adjust picking patterns that ensured no cost increases.
How do you synchronize the supply chains of the consoles with games from product development to delivery to retail?
We have a function within our Supply Chain team called Launch Management. This team has a critical role for all our significant launches as they act as the one central point where all of our various functional teams — Manufacturing, Planning, Sales, Retail Ops, Distribution, Trade, etc. — come together as frequently as necessary to ensure the flawless launch of both software and hardware across the channel.
The key is frequent good communication and the ability of our launch team to have a 360-degree view of having the right product on shelf at the appointed date. Some of the volumes we are moving are staggering at times, thus tight coordination is critical across all elements of our supply chain.
We of course also avail of Microsoft Project a great deal, as there is no better tool to ensure we have identified the correct critical path of every launch.
How do you integrate retail distribution with online and digital delivery of videogames?
Right now I would say we are at the beginning of this journey. Clearly the conundrum we all face is how to optimize for our customers in such a way that enables all channels to be effective and efficient. Microsoft’s stated objective is to be the leader in connected entertainment – another way of thinking about this is three screens connected in the cloud. With that as our guiding star we need to collectively figure out how we deliver content, services and subscriptions wherever and however the consumer would like to consume it.
We need to be able to offer choice to our customers – where they buy and how they buy. My biggest focus right now is ensuring we have the correct infrastructure to identify and recognize a customer no matter what channel they elect to buy through. At the end of the day they are a Microsoft customer and we need to ensure their buying and consumption experience is best in class, thus ensuring a loyal and valuable long-term relationship.
Tell us a real-life story from your own enterprise about how the supply chain performed well (or poorly) and what lessons you learned.
This year we made some significant adjustments to our supply chain supporting the Americas. At the same time, we had some very large launches including Windows 7 and the opening of our own Microsoft Stores. The ’09 calendar year saw us migrate our entire Distribution and Logistics network to a new partner, CEVA Logistics. As part of this we brought up a green-field site in California that coincided with the Windows 7 launch, the peak sell in month for our Xbox business, and the MSFT stores opening on October 22nd. With perfect hindsight, it was not the smartest decision I ever made as the potential for something going wrong was probably pretty high!
That said I was blown away with how well the team performed. The key to our success was great planning and great collaboration across our supply chain teams and our IT team. We have of course planned before and collaborated before, but this time it went a level deeper.
For the first time, I saw a complete blurring of the lines between our outsource partners and MSFT. I have long strived for getting the entire supply chain team to act as one. This is hard when you outsource every aspect of the business, but I was happy to see with the right partners, the right leaders on both sides, and a common customer view just what we were able to achieve. Was it easy? No. Was it perfect? No. Was it transparent to our customers? YES, and that was really all that mattered.
We certainly over-communicated throughout the process and our senior management team worked hard to lead the huge amount of change that was necessary to ensure the successful launches.
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