Here's why Xbox's success in the consumer market doesn't matter

Xbox is great, but just because Microsoft knows how to sell that doesn't mean they know how to sell smartphones to consumers... And can Nokia help?
Written by Matt Baxter-Reynolds, Contributor
Xbox One
Fancy an Xbox? It's a niche product in the context of smartphones.

I've always fancied having a computing industry law named after me. A good one, you know like Moore's Law, or Brook's Law. I'd even take an adage, like Hanlon's razor. (Easily my favourite razor.)

If I had a chance to create one, I'd like to create "MBR's Law" as being something like this:

Every discussion about Microsoft's inability to deliver in the consumer market will be met with the rebuttal, 'Yeah, but what about Xbox?'"

Of course, today we have to regard this in the context of Microsoft buying out Nokia's phone unit. Nokia do know how to sell to consumers, but let's look at Xbox first.


The Xbox is good. I've owned a few in my time and, when I've had the bandwidth to actually play with it, I've enjoyed it. It fits and suits the market well -- it's well executed.

As we know, it's a consumer device and it's trounced the competition. Sega is no more, Nintendo is floundering, and Sony's only chance with PlayStation 4 is if Microsoft fatally mucks up Xbox One.

Xbox is one of Microsoft's sixteen billion-dollar businesses, with $10 billion in revenues. It's not slow handclap time by any means.

It's no wonder that when I tweet comments like "Waiting for Microsoft to come up with a good consumer product is like waiting for IBM to come up with good sportswear", you immediately get back a response like, "Dude, have you forgotten the Xbox?"

No. I haven't forgotten the Xbox. It just doesn't count.

Neither does the fact that they make rather good webcams, mice, keyboards, etc. Yes, Microsoft so make consumer products, and some of them are very good.

Why none of this counts is that it totally ignores the terrifyingly vast scale that the computing industry is now operating at.


In the last financial year, Microsoft shipped 9.8 million Xbox 360 consoles. The year before that, they shipped 13 million. (Don't forget the impending Xbox One would likely have been pushing down performance over the last year.)

Apple sold 19.5 million iPads in the last quarter alone. That 9.8 million Xbox consoles is trounced entirely by 70-odd million iPad sales in that same year.

And the iPad is a high-end product. Look at smartphones and you get 723 million odd of those being sold (225 million). How does that sound against 9.8 million Xbox units?

For context, the last twelve months saw around 20 million Lumias sold. Worth remembering that from both perspectives -- just how tiny Windows Phone's success is, and just how irrelevent Xbox is.

What's happening to our industry right now is the biggest shift that we have seen since 1995 and the tipping-point that brought the internet to mainstream awareness. The shift before that was 1981 and the introduction of the PC.

The Xbox is just not a relevant product within that context, and by extension Microsoft's success at shifting those proves nothing.


Today of course we have to regard all this from the perspective that Nokia is (effectively) no more, and that 32,000 Nokia employees will soon become Microsoft employees.

Nokia has always been able to sell to consumers. Yes, they sold to businesses -- back in the day they made some superb business workhorse phones, like the 6310i -- but they've always been there in Consumerland.

One has to assume that all the marketing skills that made Nokia able to sell to consumers is transferring over with those 32,000 staff. Those Nokia marketeers have their finger on the pulse much more than their Microsoft counterparts.

The danger of course is that Microsoft -- already in the middle of an extraordinary upheaval -- fails to learn the lessons that it can from those people within Nokia who do know how to sell to consumers.

Perhaps we can one day get to a point where when I say "Microsoft are hopeless at selling to consumers!" the response I get back will be "Dude, what about Lumia! It's the number one phone in the world!"


What do you think? Post a comment, or talk to me on Twitter: @mbrit.

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