Microsoft as the Quiet Disrupter?
By: Herb Greenberg | CNBC Senior Stocks Commentator
Isn't this press releasefrom Microsoft the one we expected from Apple?
In a nutshell, the company rolled out the latest update to Xbox and Kinect—a new voice-activated set-top box that pulls together cable and streaming providers.
“Xbox is no longer your mama’s game console,” says Silicon Valley insider Eghosa Omoigui, founding partner, EchoVC, a seed venture capital firm.
“And Kinect is a real 'experience' breakthrough. The latest 'update' clearly shows that Microsoft is realizing that they are sitting on (1) pure data and (2) experience gold—keeping a foot in 'social' by coming thru the back door.”
Omoigui adds that while Apple also sees the TV as the gateway into the living room, “there's no near term dislodging of Microsoft and Xbox. And if Microsoft gets the Windows Phone right, with the right always-on 'presence extension' experience connected with the Xbox and Windows PC—they’ll have a real shot against Apple.”
Yet, based on Microsoft’s stock move Monday, the news is being greeted by Wall Street as yet another yawner.
That’s because as of last year (and through the most recent quarters) Microsoft’s entertainment segment (comprised mostly of Xbox) comprises around 13 percent of revenue and 4 percent of operating profits; four years ago it was around 12 percent and 1 percent, respectively.
In other words, for all it’s whiz bang, Xbox and Kinect are still barely moving the needle.
If Microsoft is truly the “quiet disrupter,” as my colleague Brian Sullivan puts it, then its emerging role in the living room is the loudest opportunity nobody cares about or believes.
Yet.
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