Not So Smart: Microsoft's Heart of Glass

Nintendo's press conference at E3 may have disappointed - after a promising start, it was a poorly scripted, ill-considered and deeply unlikeable mess - but the company's influence over the rest of the games business continues to be strong. A few years ago, in the wake of the success of the Wii and its motion controller, Sony and Microsoft didn't even have the grace to look sheepish as they unveiled their own motion control hardware. This time around, with the Wii U's second screen proposition on the table since last year, they're determined not to be left behind - and lo and behold, second screen ideas were announced by both of Nintendo's rivals this week.

For Sony's part, the hook-up of the Vita to the PS3 is a fairly logical step. It promotes the Vita (and god knows it needs it), while giving the possibility of an interesting new set of controls to PS3 software. In tune with much of Sony's conference, the Vita hook-ups announced so far are entirely games-focused, although I expect that the company will quickly wise up to the media potential of the device. (I tell you what, Sony - turn it into a fully functional remote for Singstar, allowing people to queue up songs while others are singing, and I'll actually even buy one.)

Microsoft's SmartGlass is, on the surface, more ambitious. It proposes to make any mobile or tablet device interact with the Xbox 360, either as a touchscreen controller or as a secondary display showing you extra information from the game you're playing or media you're watching. Confounding the expectations of critics ahead of the show, the company even plans to make this work with iOS and Android devices, not just Windows Phone 7 or Windows 8 devices - so there's a chance that some consumers might even use it.

"All of this is aimed, in part, at being able to shrug expansively and say "hey, we can do that too"

All of this is aimed, in part, at being able to shrug expansively and say "hey, we can do that too" when Nintendo arrives on the market with the Wii U later this year. Of course, it misses the point to a large extent - developers on the Wii U (including, crucially, Nintendo first-parties) can develop in the full confidence that every consumer will have a Gamepad. Sony and Microsoft, however, will have to apply a significant amount of leverage to convince developers to spend time and money supporting an optional link-up to an external device, and no game for the PS3 or Xbox 360 will ever be designed from the outset with that functionality as a core feature.

In Microsoft's case, though, it was hard to escape the feeling that SmartGlass wasn't really designed for games anyway. There are simply too many hurdles to overcome from a gaming point of view - not least of which is the bewildering variety of devices, form factors and screen resolutions SmartGlass functionality would have to work with. The Android platform alone boasts dozens if not hundreds of different screen formats and resolutions (which is something of a constant source of woe for Android developers), and SmartGlass purports to support that as well as iOS, and Windows Phone, and Windows itself. Perhaps there's a clever solution to this device fragmentation, but if you're purporting to use the device as a secondary controller for a videogame, I'm not sure what that might be.

Besides, Microsoft's demo was initially heavily focused not on games, but on media. We saw SmartGlass technology showing us the IMDB entry for a movie that was playing on the Xbox. Then we saw it showing an animated map of Westeros during an episode of Game of Thrones, explaining where the characters we were watching were located. That's a nice demonstration (and it would save me from having to explain that to my flatmate after every episode), and it's the one most frequently cited by commentators after the event. It raised more questions than it answered, though.

Here's a question, for starters - who creates the content? Or rather, who pays for the content to be created? Does HBO? Microsoft? Perhaps Netflix or Hulu or whatever streaming service you happen to be using? If it's anyone other than Microsoft, why should they make Xbox-exclusive content that can't be accessed by users on other devices? If it's Microsoft, what's the justification for the outlay? Is it just to promote the Xbox, or are they expecting users to pay a premium for SmartGlass content alongside what they already pay for their TV shows and movies? In other words, what's the business model?

"The short answer to the business model question, I suspect, is "there isn't one".

The short answer to the business model question, I suspect, is "there isn't one". Or rather, that the business model is extremely simple, and can be summed up like this - "if we don't do this, Nintendo will... And, oh god, so will Apple."

Microsoft, after all, has stopped really looking at Nintendo and Sony when it comes to strategic planning. It's not "won" the console battle, although it's certainly put in a strong showing, but it's won enough for it to have switched focus. From the outset, its reason for being in games was to get a set-top box into your living room which would allow it exert ownership over how you consume media - including games, but also including movies, TV, music and so on. In that battle, Sony is a rival but right now, it's not an important rival. The important rivals? Apple, Google and perhaps even Amazon - and SmartGlass is far more a reaction to those companies, and primarily to Apple, than it is to anything coming from Nintendo.

My first reaction to Microsoft's decision to devote vast swathes of its conference to announcing deals for streaming video services, music services and second-screen media technology was straightforward - "wow, these guys are really terrified of an Apple TV". I voiced that thought on Twitter, and it transpired to be a fairly widely shared one. Apple's WWDC showcase event is one week away. Microsoft's conference wasn't about speaking to the audience at E3 - it was about speaking to the wider audience who'll be at WWDC, and might be learning about Apple's plans in the TV space.

That's "might be". Apple still doesn't officially have anything happening in TV, with the exception of its diminutive AppleTV set top box, which is a nifty piece of hardware (and selling better than it used to, but still only in small volumes) but hardly a threat to Microsoft's business. The world assumes that an Apple TV is coming, but that's far from proven, and it's unlikely that Apple will enter the market without having some way of seriously disrupting its existing business model. Yet the anticipation around an Apple TV product tells you something important - people are sick of existing media solutions (focused as they are around arbitrary and unwelcome barriers to accessing content which are utterly irrelevant in the Internet age) and crave something better, whether that happens to be from Apple or anyone else.

"The world assumes that an Apple TV is coming, but that's far from proven."

So even though the Apple TV doesn't exist yet, and we don't know what it'll be, Microsoft has hopped to do something - anything - to head it off at the pass. SmartGlass, though, isn't remotely sufficient. If anything, it's a bit of a sad effort, a perfect example of running to where the ball is now rather than trying to figure out where it'll be in future and running there instead. Bluntly, the biggest problem with SmartGlass is that it's a feature the majority of people have already worked out how to do by themselves. Remember the picture Iwata Satoru showed in his presentation last Sunday, showing a family all watching TV but simultaneously absorbed in their own "second screen" devices?

That's a scene every bit as common as he describes - and how many of those people have genuine trouble finding the Twitter hashtag for the show they're watching, or looking up the movie they're watching on imdb, or perhaps checking the location in that travel show out on Google Maps? Sure, SmartGlass can theoretically do more than that, but it relies on someone being willing to pay to develop SmartGlass-exclusive content alongside their existing media.

I can't see consumers paying for that. I can't see content creators paying for it, either. So unless Microsoft is proposing to turn this into yet another cash black hole (and I'd argue that Bing already qualifies as quite enough of a black hole, even for a company of Microsoft's size), I don't see where SmartGlass' content will come from. Without content, it's just a glorified tech demo. It looked nice on stage, but it's got a hell of a lot to prove before it's actually useful or relevant in the living room.