Would be possible for Microsoft to totally screw up Xbox BU?

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About two years ago we signed up for Verizon FIOS at our home. Last month, we noticed our bill had jumped from $140 or so per month to almost $200. Silly us, we forgot our contract had expired and they just jacked the price. So we cancel the TV and landline and kept Internet only and that caused a new habit of using Netflix more. Our primary device to watch Netflix is Xbox. It works well, but it feels wrong.
I mostly stopped playing games on Xbox after my kids were born. When I had one kid I could still snick in some Halo between here and there, but after the second kid it became too hard. The Xbox became most for casual games (Kinect stuff) and for music and videos. Now the machine is our primary way for the TV entertainment of the house, it’s clearly showing its weaknesses, among them:
  • The device gets super hot if you leave it on for too long.
  • It takes too long to start.
  • There is this constant disk spinning background noise.
  • The remote control, wait, the game controller, turns itself off after a while.
  • The controller is incredibly hard for a kid to use to control Netflix and it’s too easy to click a button and take the Xbox to a whole new world.
  • The UX is atrocious! Yes, I said it. There are so many clicks and scrolls to get to what you want that’s ridiculous. The bad UX is hidden behind amazing graphics and graphic effects. It’s like going to a bad movie in theaters with amazing 3D special effects. It’s still a bad movie, but pretty.

That made me think how Microsoft is vulnerable on the Xbox business unit. If they don’t launch a new Xbox primarily designed to be the control center of your TV, it will be similar to the Windows Mobile vs. iPhone story. It becomes a catch up game and Microsoft is not the fast-follower it used to be (well, actually they continue to be fast-followers, but the world is moving faster).
The Xbox is incredibly lucky that Apple has not launched a serious iTV contender. Maybe it’s harder than Apple originally predicted, but Apple is revolutionizing software and hardware so much that it wouldn’t surprise me if they launch either a full TV or a set-top-box for an incredible affordable price and take the world by storm with a fully integrated experience. iCloud is the most strong signal this is coming. The existing Apple TV was just an experiment, right now and it shouldn’t be taken seriously.
I have two advices to Microsoft. 1) Ship faster the next generation Xbox. 2) Make this new Xbox optimized for Hulu, Netflix, YouTube, listening to music, viewing pictures and playing casual games. Yes, you can still support hard-core gamers, but that should be secondary.

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