Is the Xbox One Microsoft's future, or a Windows 8-level failure?

The do-everything Xbox One is Microsoft's bet that it can take over the living room and be the center of your entertainment universe. But will it be that, or just a re-run of the Windows 8 fiasco?

In announcing the new Xbox One, Don Mattrick, president of Microsoft's interactive entertainment business, made it clear that the company had much bigger ambitions for the new device than the old Xbox 360 gaming system. He said:

"Our ambition is to become the all-in-one system for every living room. The place where your games, TV and entertainment come alive."

The device's specs and capabilities make clear how far-reaching Microsoft's vision is. It controls your television set, including cable TV, and makes it easy to switch between gaming and TV watching. It comes with a high-definition Skype video client. It runs Hulu, Netflix and other similar streaming video services. It plays CDs (remember those?), DVDs, and Blu-ray Discs. It comes with Kinect and will work with Windows 8 devices such as tablets and smartphones. It also sports a new processor, a Blu-ray Disc drive, 500GB hard-disk drive, and Wi-Fi Direct. And under the hood, its new architecture is a combination of Xbox and the Windows kernel.

Along with all that, it comes with a hefty price tag -- $499 versus $199 for the existing Xbox 360.

Depending on your point of view, all this is either a bold move for making Microsoft services central to your life, or else a re-run of Microsoft's failed gamble on Windows 8.

Tech writer and commentator Paul Thurrot thinks it's the latter. He writes:

"Maybe I'm missing something, but isn't this weird combination of features -- TV! Video games! Online entertainment services! Skype!! -- sort of reminiscent of Windows 8? I mean, after all, you're already paying for cable TV (because if you’re not, this feature doesn't work with Xbox One anyway). And you can already get a box that works with Netflix, Hulu Plus, and every single other entertainment service on earth there is, and it costs just $99 (or even cheaper)."

His point is a good one. With Windows 8, Microsoft built a single operating system for different devices -- touchscreen tablets and traditional PCs -- and ended up satisfying no one. The same could well be true of the do-everything Xbox One. Making matters worse it its hefty price tag.

On the other hand, the battle among tech companies today isn't between discrete pieces of hardware and software. It's between entire ecosystems. And the Xbox One has clearly been designed from the ground up to be an ecosystem platform, not a gaming device.

As a platform the Xbox One has a lot going for it -- but also a major problem, its price tag. At $499, it's just too costly. Expect Microsoft to bring the price down by launching an Xbox One subscription service of some sort, and then subsidizing the hardware for those willing to buy long-term contracts. But people will still be paying a premium price for premium hardware, via the higher-than-needed monthly fees.

Because of that, I don't expect the Xbox One to be the game-changer Microsoft hopes it to be. It's just too costly. And I'm also not convinced that people are ready yet to cede their living room to a single company. Mix-and-match, as chaotic and confusing at that might be, will likely still be the order of the day for several years.

So I don't expect the Xbox One to take over the living room. But I also don't think it will be a Windows 8-level fiasco, either, because there will be plenty of people willing to pay the high prices for what seems to be a solid piece of hardware.

Copyright © 2013 IDG Communications, Inc.

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