Microsoft – All the boxes

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New Xbox hardware enhances cross device strategy.

• Ahead of E3 2015 (June 16-18), Microsoft has released a revision of the Xbox One and hardware that takes further advantage of the cross device opportunity.
• Microsoft has launched a new Xbox One where the storage has been upgraded to 1TB (a major gripe to date) and a new wireless controller.
• The new Xbox One is priced at $399 with the older one with less storage dropping to $349.
• Microsoft has also launched a USB dongle that allows the wireless controller to be used on any device that runs Windows 10.
• To me this is another sign that Microsoft has fully embraced the requirement to provide the ecosystem on as many devices as possible.
• I think that having a consistent ecosystem across all electronic devices is going to be a driver of the user’s ecosystem choice in the near future.
• This means that the user experience has to be consistent and the user has to have access to all his Digital Life services and data on every device.
• All of the major players (Apple, Google, Amazon, Sony & Microsoft) are experimenting with this but I think that Microsoft has an opportunity to get a step ahead.
• This is because it already has a position in many of the devices that are important today and with Windows 10, all of those devices will be based on the same code.
• This means that any app will run on any device and the user experience will be much more consistent than it is today.
• To me, the real value of Windows 10 is its ability to spread a consistent user experience across multiple devices that should be easier and more fun to use than before.
• Furthermore, the fact that many users will be able to upgrade to Windows 10 for free, removes many of the barriers to doing so.
• Consequently, I expect that Windows 10 will very quickly outstrip the penetration of Windows 8 and become the leading version on consumer PCs filtering down to other devices
• Cross device is a key part of the three missions (see here) that Microsoft must successfully execute if it is to succeed in its ambition to become an ecosystem company.
• Fortunately, from an investment perspective, Microsoft shares remain attractive even if it only succeeds in one of these three, making it safe to live in hope for the other two.