Microsoft's entertainment gap - Is a Roku acquisition the solution?

With the announcement that the Xbox team is redesigning it's Xbox One UI my initial reaction was this isn't for me anymore. You see, I'm not a massive gamer. Sure I enjoy the occasional RPG but I mostly play solo campaigns. I do use my Xbox a lot though... it just all media.

But with the announcement of the new dashboard it's clear to me that this is part of the march towards re-positioning Xbox for the hard core gamers and undoing the "mistakes" of trying to go too broad with the original Xbox One introduction. Gone are the Live Tiles and the three screen hub, (Pinned Content, Home and Marketplace) and in it's place is the activity feed focused on your most recent games with quick links to friends, clips you've shared and any updates from the developer. Your Pinned apps are now at the bottom of this list. This update was all about getting into your games more quickly and interacting with friends around that content more easily. And for gamers this is going to be a welcome change. But here's the thing... that's not me.

While Microsoft has always treated Xbox Music and Video (now just Music and Video) as a necessary feature for completeness, rather than services they were going to compete with... I liked them. They worked across screens and even my iPhone (well Music at least). But they were never first class services designed to compete with Pandora or Netflix. While that may have been the intention under the old guard (Don Mattrik and Marc Whitten) who set up studios in Santa Monica; it sure isn't under Phil Spencer. But that's okay because the team worked hard to bring on 3rd party content providers such as Netflix, Hulu, NFL, comedy central, etc. And while the teams have refreshed the Video and Music apps for Windows 10 - and they do look good - there really isn't the investment needed to make it a users first choice.

So let's call the Xbox One what it is... a dedicated Windows 10 gaming PC. And that does make sense when you take a step back and think of Microsoft's overall hardware strategy:
Surface: Productivity PC
Xbox: Gaming PC
Lumia: Mobility

But, it does leave a gap. Where is the dedicated Windows 10 entertainment experience? It used to be the Windows Media Edition but with that no longer being supported, there is a clear gap for a dedicated experience/hardware. I'm sure the team could develop a low cost PC, with a similar configuration to the HP Stream Mini, where the Xbox activity feed is stripped out and 3rd party entertainment apps are promoted to the home screen. This way you have an entry level device that allows you to compete with Apple TV, Fire TV, etc. and provides another option to get Windows 10 into the living room. It also extends the appeal/reach of Windows 10 for developers to create Universal Apps, and reinforces the fact that Windows 10 should be a consideration for every content publisher.

But rather than build this low end media PC itself, I'd rather see Microsoft buy it in the form of Roku. In one manageable acquisition, Microsoft would have a credible solution for the entertainment segment. Over time, move the Roku devices to be Windows 10 machines and work with the publishers to port any missing apps to the Universal framework. And by pre-installing the Xbox app, you build in the purchase reason for every household to own at least one Xbox One - game streaming.



This would help position Windows as the platform to build on... but in this era its not OEMs Microsoft is targeting but developers, content publishers, and extensible experiences (thing Virtual Reality).

What do you think?