Xbox Product & Services Innovation Assessment

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Product & Services Innovation

Table of Contents

Xbox - Kinect

Table of Contents

Product Background and History Background

Vision/Goals

Product Portfolio

Milestones and Important Events

Scenario Analysis

New Product or Innovative Description

Market Description and Position

Comparison with Competitors

Current Competitive Strategy/Outcomes

Summary

References

Product Background and History Background

Microsoft created and owns Xbox the famous video gaming brand, the brand has a line of different video game consoles. The Xbox brand, also offers applications (games), streaming services, and Xbox Live which is an online service. Microsoft first introduced Xbox on the 15th of November 2001 in the United States.

Microsoft is proud to have the first video gaming console to be offered via an American company After the American company Atari Jaguar stopped it sales in 1996. Xbox sold 24 million units by the end of 10th of May 2006. Xbox 360 was the second console to be developed by Microsoft, and was launched in 2005, and sold more than 77.1 million units all over the world, by the end of 18th of April 2013. Xbox One, Microsoft latest console was released on 21st of May 2013. The Xbox One was launched into 21 markets, and was released in China on 29th of September 2014. Phil Spencer is the new head of Xbox after succeeding Marc Whitten by the end of March 2014.

Kinect is a motion sensing controller free device developed and distributed by Microsoft. This device works in connection with Microsoft's gaming console, Xbox one to heighten the gaming experience. The device began as a necessary part of Xbox One but later was made an optimal device. Additionally the device is being planned to work with Windows PC’s also. Gamers can connect the Kinect device to their gaming systems and enjoy a controller free experience. Kinect was bunched in July 2010 with a 500 dollar budget. Microsoft sold 10 million devices in the first year which made it the fastest selling consumer device (Stevens 2011).

Kinect has been imbedded with a camera, microphone and depth sensor which enables facial recognition, gesture recognition and voice recognition. The device can track two active players along with four additional people who come in the periphery of the device's vision (Schramm 2010).The device is exposed to direct competition with other motion controllers in the market such as Play Station Eye, PlayStation Camera and Wii Remote Plus (Greenwald 2010).

Kinect Design

Figure 1, source: (http://www.xbox.com/en-IN/Kinect)

Inside Kinect

Figure 2, source: (http://www.xbox.com/en-IN/Kinect)

Vision/Goals

The vision of Microsoft, Kinect's developer, is to enable people and businesses throughout the world to realize their full potential, this is achieved by infusing technology which is accessible to people of all ages and abilities (Microsoft 2014). Microsoft's Kinect is specifically focused on not just gamers but also people with impairments and disabilities

Product Portfolio

Kinect's developer, Microsoft has a very strong product portfolio. The company develops and distributes both hardware and software products. The company's software products includes Microsoft Windows, Microsoft Office suite, Internet Explorer, Microsoft Azure etc. The company's hardware products include Xbox game consoles, Kinect and Microsoft Surface tablet.

Milestones and Important Events

Microsoft began working on its Kinect in 2008 after discussing the possibility of a hands free console with Apple's CEO, Steve Jobs at a conference In 2009, the company officially announced its motion sensing device project as Project Natal at its annual E3 conference. The company showed a small presentation of the project and announced that certain game developers would be getting the development kits for the project to develop games (Lowensohn 2011).

In May 2010, Kinect was launched in North America with an advertising budget of 500 million dollars. The company employed the use of different mediums including print ads, commercials and cereal box advertisements to promote Kinect. The company also organized a midnight bunch event on Times Square where Kinect games and T-shirts were distributed to the audience.

In the coming months, the products was launched across different countries globally including Australia and Japan. The company revealed that it had sold 8 million Kinect products in just one year. In July 2011, the company expressed its intention to launch Kinect on a Windows PC.

Scenario Analysis

New Product or Innovative Description

Usually when an innovative product enters into the market, it is quite difficult to predict the success of the products because the need or want for the product is not created among the customers. The company faces a challenging task to make the customers want the product (Bennet & Cooper. 1981). The success rate of innovative products is only 25% which shows that not all innovative products are readily accepted in the market (Evanschitzky, et al. 2012). In the case of Kinect, Microsoft did not face many challenges. This was mainly because the company has a strong brand image and is considered to be the leading technology provider globally. The company is associated with bunching the most innovative products and this credibility was automatically extended to Kinect.

Kinect was an innovative product. Even though there are other motion sensing devices in the market, they do not quite match with Kinect in terms of their technological advancement. Kinect is a hands free motion sensing device while the rest of the devices that are paired with other gaming consoles require gamers to hold a controller.

Microsoft is also working on the device in order to make it compatible with Windows. This would considerably increase the market for the device and at the same time, position it above the competition. When the device would become compatible with Windows, it would be particularly helpful for people with disabilities since the device transmits gestures and motions onto the television or the computer. Since Windows is still the most popular operating system, the compatibility of Kinect and Windows would considerably increase the reach of the product.

Market Description and Position

In the recent years, the market for technological products has become mature and saturated. This has resulted in increase in products, a wider range of product lines, more frequent up gradations. Companies have also begun to offer differentiated products in order to remain ahead of the competition (Sanchez, 2003). The same is true for Kinect's market. Even though Kinect was an innovative product, it soon began to face competition as similar products began to emerge in the market. Microsoft is also aware that the advantage that it enjoys over Kinect may not remain long as the market is quite volatile. Therefore, the company is working on upgrading the product so that it becomes compatible with Windows operating system.

The market for technological products is growing saturated. The market has now entered its growth stage which is characterized by increased competition and also increased demand for such products. Soon the product will enter the maturity stage where demand was become stable and market saturation would reach the highest level. In such conditions the company has to ensure that it is able to offer differentiated products in the market. With Kinect, Microsoft has the advantage in the market.

Comparison with Competitors

Competitor Analysis is crucial for the success of a product in the market since it allows the company to evaluate the positioning for its products (Bergen & Peteref 2002).

In terms of Kinect. Microsoft is facing competition from two main companies. Sony and Nintendo. The device Kinect is currently compatible with Microsoft's gaming console, Xbox. Both Sony and Nintendo also have their own motion sensing device which is compatible with Microsoft Xbox: Kinect gaming console. Sony's motion sensing device is PlayStation Move while Nintendo sells its device under the brand name of Nintendo Wii.

PlayStation Move

Figure 3, source: (http://asia.playstation.com/move/sg/img/image0.jpg)

The biggest advantage that Kinect has over is competitors is that it is hands free. Using gesture recognition, facial recognition and motion recognition, the motion sensing device senses the players’ actions and sends the required message to the gaming console. In the case of both Wii and Move, they come with hand held devices which players have to hold and move to correspond with the action required.

The biggest disadvantage that Kinect has over its competition is that its space requirement make it difficult for gamers to practically use it. When gamers use Kinect in connection with Xbox, they have to make room in front of their TV screen to enact their motions and gestures. This makes it difficult for gamers living in studio apartment to use the device without any impediment. Nintendo Wii offers the best advantage in this case since gamers only have to hold the sensing device to translate the required motions in the game. PlayStation Move also have a certain disadvantage because it required gamers to install an additional camera in order to use the device (Ackerman & Stein 2010).

Other than this, the devices offer many of the same standard features. Both PlayStation Move and Kinect have a resolution of 1080 pixels but the resolution of Wii is much less, 480 pixels. PlayStation Move and Kinect offer built-in battery chargers, image and head tracking devices, voice recognition feature and microphones.

Current Competitive Strategy/Outcomes

Since Kinect was an innovative product, Microsoft worked on creating demand for the product. They used a 500 million dollar advertising budget to create hype for the product. Along with this Microsoft used its Xbox success to sell the innovative product. They made Kinect compatible with Microsoft's latest Xbox series, Xbox One. Kinect device was necessary in order to use Xbox One and thus consumers were forced to buy Kinect. However, this strategy did not achieve the expected results since gamers began to shift towards competitor product since buying Kinect with Xbox One made the package more expensive and Kinect's space limitation further decreased interest of the consumers (Callahatn 2014). Later, Microsoft realized its mistake and made Kinect optional rather than compulsory (Leadbutter 2014)

Summary

Kinect is a motion sensing device released by Microsoft in 2010. This device offers gaming consumers the advantage of enjoying a game without a controller. Microsoft, a credible name in the technology industry, released the product with an advertising budget of 500 million dollars and to boost sales made it compulsory with Xbox's latest game console, Xbox One. Even though the product offered the advantage of a completely hands free gaming experience, the strategy failed since Xbox One's sales decreased. Despite the failure of strategy, Kinect sold 10 million products in its first year which is quite big for an innovative product. Microsoft is also working on expanding the reach of Kinect by making it compatible with Windows operating system.

References

Ackerman, D. and Stein, S. 2010, Motion control shoot-out: Xbox 360 Kinect vs. PlayStation Move vs. Nintendo Wii Remote Plus, Retrieved from http://www.cnet.com/news/motion-control-shoot-out-xbox-360-kinect-vs-playstation-move-vs-nintendo-wii-remote-plus/

Bennett, R. C., & Cooper, R. G. (1981). The misuse of marketing: an American tragedy.Business Horizons,Vol. 24(6), pp. 51-61.

Bergen, M. and Peterf, M. 2002, Competitor Identification and Competitor Analysis: A Broad-Based Managerial Approach, Managerial And Decision Economics, Vol. 23, pp. 157–169

Callaham, J., 2014, The Xbox One-Kinect strategy didn't work, and now Microsoft (sort of) agrees, Retrieved from http://www.neowin.net/news/the-xbox-one-kinect-strategy-didnt-work-and-now-microsoft-sort-of-agrees

Evanschitzky, H., 2012, Success Factors of Product Innovation: An Updated Meta-Analysis, Journal of Product Innovation Management, Volume 29,Issue Supplement S1,pages 21–37,

Greenwald, W., 2010, Kinect vs. PlayStation Move vs. Wii: Motion-Control Showdown, Retrieved from http://www.pcmag.com/article2/0,2817,2372244,00.asp

Leadbutter, R. 2014, Why Xbox One's ambitious media strategy failed, Retrieved from http://www.eurogamer.net/articles/digitalfoundry-2014-why-xbox-ones-media-strategy-failed

Lowensohen, J. 2011, Timeline: A look back at Kinect's history, Retrieved from http://www.cnet.com/news/timeline-a-look-back-at-kinects-history/

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