Microsoft needs to shed its image as the world’s biggest purveyor of workplace software and draw on its success selling the Xbox gaming console if it wants a shot at introducing a tablet to challenge Apple’s iPad.
Microsoft has sold 67 million Xbox 360s in seven years on the market, making it the most popular game platform, even appearing in rocker Liz Phair’s song lyrics.
Sales surged as Microsoft transformed Xbox from a video- game player into a full-fledged entertainment center, starting in 2008 with the addition of Netflix Inc.’s video streaming and the music service Last.fm. Earlier this month, Microsoft unveiled Xbox SmartGlass, an app that will work on Windows 8 to let smartphones, tablets and computers stream media to a screen controlled by the console.
The problem for Steve Ballmer’s company: The Xbox brand isn’t that much better than the stodgy Windows and Office brands that Microsoft feels are holding its tablet efforts back. While 67 million sales in seven years is an OK number (Don’t forget the console’s notorious reliability issues mean a lot of those are in landfills), the Xbox brand doesn’t have a universal appeal. Apple sold 40 million iPads in 2011 alone. Yes, Xbox does help a Microsoft tablet reach gamers, but it doesn’t do a thing to attract anyone else. In fact the Xbox brand may scare off more people than it attracts.
Microsoft’s tablet problem isn’t branding. It’s the products and strategy. Afraid of hurting sales of current products, they’re letting the future pass them by.