With the news that Microsoft was cutting jobs came word that their Xbox Division would also be giving up on an original content strategy, Back in March, I wrote in my blog that I did not think it was in the best interest of either Xbox or the Sony Playstation to create exclusive video content when the primary intent for these devices was gaming. Nadella must agree. Per Re/code, "Microsoft will shut down the Xbox Entertainment Studios, ending an ambitious foray into original video programming." Instead, the focus for Xbox for now will be video gaming. I couldn't agree more. Sorry to see Xbox Entertainment Studios go, but it was not a good fit.
Given the device appeal as gaming, the clear driver is video games that stretch the uses and the imagination of the consumer, interactive, challenging, and fun. It is a unique ecosystem that reaches an important core audience. And while the extension of the product as a distributor of video content adds value to the device, exclusive entertainment content does not. Microsoft is smart to leave that now to Netflix, Amazon and others and be an aggregator of these platforms. Xbox now can create exclusive gaming content instead.
As to video content, I would suggest that Xbox reach out to Apple; given the new direction of each, Apple might just be willing to let Xbox also connect to its iTune library. That type of partnership could deliver terrific entertainment value to both parties. For now, Microsoft is slimming down and focusing on its future. It is the proper means to a stronger company.
