It would appear that in the eyes of the film industry, purchasing a DVD legally equates to being of sound moral character, regardless of whether you may actually also be a serial cannibal or war criminal in your spare time.
Friday, 19 June 2009
Could you be any more patronizing?
It would appear that in the eyes of the film industry, purchasing a DVD legally equates to being of sound moral character, regardless of whether you may actually also be a serial cannibal or war criminal in your spare time.
Thursday, 18 June 2009
All Change
Who plays video games, and where do they play them. These are two facets of a traditionally unimaginative industry that have been undergoing significant, disruptive change over the last three years. The disruption has come in part from one company’s decision to gamble all by choosing innovation over convention, and in another part from general advances in technology that have organically thrown up a whole new class of competitor.
The first of these two disruptions is the Nintendo Wii, which during its development was already considered in many quarters to be dead on arrival. And yet it succeeded magnificently. Though some of that success can be attributed to its innovative interface, the bulk of it was due to the creation of a new customer segment normally excluded by the games industry. Nintendo shifted the rules of competition by selling video games to a previously untapped customer base (the general population), and thereby wrong footed both Sony and Microsoft. For a long time these latter two companies treated the Wii with derision, even as Nintendo first caught, and then surpassed its’ rivals sales figures. Both Sony and Microsoft recently unveiled their own motion sensitive systems of control, and in doing so finally acknowledged the fact that they had been out thought.
For Nintendo, nothing less than a market-changing concept was going to prevent their demise in this round of the console wars; the momentum amongst the last generation of consoles was very much with the PS2 and XBOX. Common wisdom had always been that it was processor power first and foremost that fuelled sales; this is the strategy that Microsoft and Sony followed, centred on the needs and wants of ‘hard core gamers’ (who I always imagine to be thirty somethings still living in their parent’s basements, though that may be a little unkind). Nintendo bucked these conventions by doing a number of things in complete contrast. It released a relatively underpowered, cheap console, with an interface not moulded around the fist person shooter (the staple diet of the hard core gamer), and complemented by games that appealed across the ages and sexes. Microsoft and Sony sneered; the hard-core gamers decried the Wii to be a toy. But suddenly people with a previously fleeting interest in gaming (i.e. most people), began picking up the Wii wand and playing tennis or going bowling. The game changed, and Nintendo soared ahead (though whether they stay ahead is an entirely different matter).
The second disruption has gone one-step further than the Wii, as it impacts not only who plays, but also where they play. Gaming on mobile phones has really come of its own recently, and is suddenly looking like an increasingly interesting and lucrative market. A few years ago the proposition of playing video games on a mobile telephone was fairly ludicrous (space invaders at best). But since then there have been substantial advances both in processor power and screen size, making this a very viable gaming platform. I have both a Wii and an XBOX, but it has been a while since either has seen any use; the simple reason is that I do not have time to tether myself to the television anymore. And yet I have been able to snatch several minutes every day to play on my iPhone, an experience that has been more than adequate for a casual gamer such as myself. There are now a number of mobile phone games out there that are perfectly acceptable substitutes for their console equivalents; this should start to ring alarm bells for console makers and traditional gaming houses. The same customer satisfaction for a quarter of the price, at a place and time of my choosing; this is the value proposition of mobile gaming.
There is almost little point in owning a dedicated portable console anymore; why spend extra on hardware, and then also spend further on over priced games that are already available on a device that is always in your pocket? Clearly Sony agrees with this; their recent release of the PSP Go is a defensive move aimed squarely at the iPod Touch/iPhone platform. Even the traditional software houses appear to be finally taking note of the mobile market, though at this time it is the newer, smaller companies such as Gameloft and Firemint that are firing the imagination.
It is an exciting time to be a player in this industry, and it is an even more exciting time to be a consumer. Upcoming technologies such as Microsoft’s project Natal are giving a glimpse of the future, and it looks compelling.
The first of these two disruptions is the Nintendo Wii, which during its development was already considered in many quarters to be dead on arrival. And yet it succeeded magnificently. Though some of that success can be attributed to its innovative interface, the bulk of it was due to the creation of a new customer segment normally excluded by the games industry. Nintendo shifted the rules of competition by selling video games to a previously untapped customer base (the general population), and thereby wrong footed both Sony and Microsoft. For a long time these latter two companies treated the Wii with derision, even as Nintendo first caught, and then surpassed its’ rivals sales figures. Both Sony and Microsoft recently unveiled their own motion sensitive systems of control, and in doing so finally acknowledged the fact that they had been out thought.
For Nintendo, nothing less than a market-changing concept was going to prevent their demise in this round of the console wars; the momentum amongst the last generation of consoles was very much with the PS2 and XBOX. Common wisdom had always been that it was processor power first and foremost that fuelled sales; this is the strategy that Microsoft and Sony followed, centred on the needs and wants of ‘hard core gamers’ (who I always imagine to be thirty somethings still living in their parent’s basements, though that may be a little unkind). Nintendo bucked these conventions by doing a number of things in complete contrast. It released a relatively underpowered, cheap console, with an interface not moulded around the fist person shooter (the staple diet of the hard core gamer), and complemented by games that appealed across the ages and sexes. Microsoft and Sony sneered; the hard-core gamers decried the Wii to be a toy. But suddenly people with a previously fleeting interest in gaming (i.e. most people), began picking up the Wii wand and playing tennis or going bowling. The game changed, and Nintendo soared ahead (though whether they stay ahead is an entirely different matter).
The second disruption has gone one-step further than the Wii, as it impacts not only who plays, but also where they play. Gaming on mobile phones has really come of its own recently, and is suddenly looking like an increasingly interesting and lucrative market. A few years ago the proposition of playing video games on a mobile telephone was fairly ludicrous (space invaders at best). But since then there have been substantial advances both in processor power and screen size, making this a very viable gaming platform. I have both a Wii and an XBOX, but it has been a while since either has seen any use; the simple reason is that I do not have time to tether myself to the television anymore. And yet I have been able to snatch several minutes every day to play on my iPhone, an experience that has been more than adequate for a casual gamer such as myself. There are now a number of mobile phone games out there that are perfectly acceptable substitutes for their console equivalents; this should start to ring alarm bells for console makers and traditional gaming houses. The same customer satisfaction for a quarter of the price, at a place and time of my choosing; this is the value proposition of mobile gaming.
There is almost little point in owning a dedicated portable console anymore; why spend extra on hardware, and then also spend further on over priced games that are already available on a device that is always in your pocket? Clearly Sony agrees with this; their recent release of the PSP Go is a defensive move aimed squarely at the iPod Touch/iPhone platform. Even the traditional software houses appear to be finally taking note of the mobile market, though at this time it is the newer, smaller companies such as Gameloft and Firemint that are firing the imagination.
It is an exciting time to be a player in this industry, and it is an even more exciting time to be a consumer. Upcoming technologies such as Microsoft’s project Natal are giving a glimpse of the future, and it looks compelling.
Monday, 15 June 2009
Facebook's Future?
Some of the more interesting stuff actually came later in the interview, concerning Facebook's approach to privacy and data sharing - would call it almost enlightened. Still not sure where they are going with their business model though, and am not half as enthused as the interviewer was. Even if Facebook comes up with some type of Paypal system for example (as is rumoured), there is no guarantee that Facebook users will embrace it simply on account of the branding. It will have to have some value added, and this is what is going to test the level of talent currently employed at Facebook.
Thursday, 11 June 2009
An Uncertain Future
There is no gentle way to put this. Microsoft is a company that has been in trouble ever since the day it tied up its Windows monopoly. Unless there is a fundamental shift in how it thinks and where it competes, the next 10-15 years will see it fade into irrelevance.
The core of the problem is that after thirty years, there is nothing more to Microsoft than Windows. What established Windows’ dominance was a monopoly, and ever since that time, Microsoft has approached potential new revenue streams with that same monopoly mindset. Throw enough money at it, proprietize it, muscle out the competition, and you’re in. But Windows was a special case, and the environment in which it achieved dominance will likely never exist again. The pace of change and innovation that came with the Internet means that unless an imitator such as Microsoft can immediately enter the market with a quality product, it is already too late. Innovation is the only game now, and it is one that Microsoft in its long history has never played. Recently Steve Balmer (current Microsoft CEO and in it from the beginning) was quoted as allaying fears about his company’s inability to make any head way with Search, by saying that it had taken almost 12 years for them to get Windows right. If I were an institutional investor in Microsoft, I would be very worried to hear this.
Funnily enough there is one sector Microsoft entered long before anyone else. But once they were out there on their own, it was as if they didn’t know what to do next. There was no one to emulate, no one to lead the innovation, and so they just sat there with a stripped down, and wholly inadequate version of their operating system. Three years ago the iPhone came from nowhere and completely jump-started the smart phone market. That market now belongs to Apple and RIM (I say that with a full appreciation of the fact that Nokia are the market leaders in terms of sales), and three years on Microsoft are still working on their reply. It is too late.
With the exception of the XBOX, Microsoft does not have any core competencies outside Windows. It has adopted a reactionary posture to its environment; hence the launches and then subsequent re-launches. The Zune, their search offerings over the years, even the new incarnation of Hotmail; all knee jerk reactions to products that are way ahead on the curve. This is a problem.
And then there is Windows; in its current form, its days are numbered. What do the majority of people do with a computer? They interact with the Web; they perform simple word processing and possibly spreadsheet tasks. Do I need to be tied to an expensive, clunky operating system for that? Not for much longer. Once products such as Google Docs mature, they will provide real (and free) alternatives to Microsoft Office; then why will I need a computer with Windows on it? Ten years ago I was using Windows XP, Office, Hotmail, and Internet Explorer. With the exception of Office (running on my Mac), I do not use any of those Microsoft products anymore. And the reason is that the Internet has given me choice; suddenly there are better alternatives, and I can move freely between them. Competing in an environment such as this is not natural for Microsoft; not having full control is a state of mind that is beyond them.
The XBOX has been one success story, though part of that has to be attributed to Sony’s completely inept handling of the PS3. Recent announcements by Microsoft indicate they understand the importance of positioning the device as an entertainment hub. But because it is Microsoft, I fear they will not be able to translate that understanding into a functional, consumer friendly and therefore ultimately successful strategy. And there is competition in this market coming from unexpected quarters. I was looking at TVs today (time to kill); this is an area where with the exception of the transition to flat screens, there has traditionally been very little innovation. And yet there it was, a networked TV that serves as a media hub, able to handle all the popular open formats. The networking part was still a little raw, but it was only a couple of steps away from being the finished article (kudos Samsung).
There are no doubt a lot of talented, capable people at Microsoft. But time is running out. The billions made in net income last year ($17.681 billion apparently – thank you Wikipedia) guarantee nothing. GMs recent tribulations are an apt demonstration of what happens when you are unable to adapt. Microsoft is walking that path even now.
The core of the problem is that after thirty years, there is nothing more to Microsoft than Windows. What established Windows’ dominance was a monopoly, and ever since that time, Microsoft has approached potential new revenue streams with that same monopoly mindset. Throw enough money at it, proprietize it, muscle out the competition, and you’re in. But Windows was a special case, and the environment in which it achieved dominance will likely never exist again. The pace of change and innovation that came with the Internet means that unless an imitator such as Microsoft can immediately enter the market with a quality product, it is already too late. Innovation is the only game now, and it is one that Microsoft in its long history has never played. Recently Steve Balmer (current Microsoft CEO and in it from the beginning) was quoted as allaying fears about his company’s inability to make any head way with Search, by saying that it had taken almost 12 years for them to get Windows right. If I were an institutional investor in Microsoft, I would be very worried to hear this.
Funnily enough there is one sector Microsoft entered long before anyone else. But once they were out there on their own, it was as if they didn’t know what to do next. There was no one to emulate, no one to lead the innovation, and so they just sat there with a stripped down, and wholly inadequate version of their operating system. Three years ago the iPhone came from nowhere and completely jump-started the smart phone market. That market now belongs to Apple and RIM (I say that with a full appreciation of the fact that Nokia are the market leaders in terms of sales), and three years on Microsoft are still working on their reply. It is too late.
With the exception of the XBOX, Microsoft does not have any core competencies outside Windows. It has adopted a reactionary posture to its environment; hence the launches and then subsequent re-launches. The Zune, their search offerings over the years, even the new incarnation of Hotmail; all knee jerk reactions to products that are way ahead on the curve. This is a problem.
And then there is Windows; in its current form, its days are numbered. What do the majority of people do with a computer? They interact with the Web; they perform simple word processing and possibly spreadsheet tasks. Do I need to be tied to an expensive, clunky operating system for that? Not for much longer. Once products such as Google Docs mature, they will provide real (and free) alternatives to Microsoft Office; then why will I need a computer with Windows on it? Ten years ago I was using Windows XP, Office, Hotmail, and Internet Explorer. With the exception of Office (running on my Mac), I do not use any of those Microsoft products anymore. And the reason is that the Internet has given me choice; suddenly there are better alternatives, and I can move freely between them. Competing in an environment such as this is not natural for Microsoft; not having full control is a state of mind that is beyond them.
The XBOX has been one success story, though part of that has to be attributed to Sony’s completely inept handling of the PS3. Recent announcements by Microsoft indicate they understand the importance of positioning the device as an entertainment hub. But because it is Microsoft, I fear they will not be able to translate that understanding into a functional, consumer friendly and therefore ultimately successful strategy. And there is competition in this market coming from unexpected quarters. I was looking at TVs today (time to kill); this is an area where with the exception of the transition to flat screens, there has traditionally been very little innovation. And yet there it was, a networked TV that serves as a media hub, able to handle all the popular open formats. The networking part was still a little raw, but it was only a couple of steps away from being the finished article (kudos Samsung).
There are no doubt a lot of talented, capable people at Microsoft. But time is running out. The billions made in net income last year ($17.681 billion apparently – thank you Wikipedia) guarantee nothing. GMs recent tribulations are an apt demonstration of what happens when you are unable to adapt. Microsoft is walking that path even now.
Sunday, 7 June 2009
The Nature of Innovation
Though the title of this following article is not grounded in any current reality, it is nonetheless a very interesting read:
http://www.time.com/time/printout/0,8816,1902604,00.html
http://www.time.com/time/printout/0,8816,1902604,00.html
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