CES: Microsoft Misses Mark with IPTV for Xbox 360

Microsoft’s IPTV software for the popular Xbox 360 gaming system missed its holiday season 2007 commercial availability goal with no new one provided by the software giant.

The innovative software, designed to enable widely deployed Xbox 360 systems to receive IPTV and other content, in addition to its gaming functions, was introduced by Microsoft executives at CES last year amid much fanfare on the consumer electronics’ industry’s largest stage. One goal was to help big telcos gain a differentiating edge on rival cablecos in their IP video services.

Microsoft and industry experts envisioned the product serving essentially as another set-top box (STB) in the home, one designed to expand the audience for IPTV by targeting the vast and broadband-connected masses of online gamers.

“There’s a lot of interest in the product with it in trial with not quite a half-dozen of our top customers,” claimed Christine Heckart, general manager of marketing for Microsoft TV. She did not give a reason for the delay in the commercial availability of the product, and would not say how long the delay would last.

Microsoft’s Bill Gates did mention in his keynote Sunday night that the United Kingdom’s BT would begin a commercial deployment of the offering in the middle of this year.

But in the United States, with large, entrenched cablecos benefiting from decades of delivering TV and related video services, IPTV for the Xbox 360 was seen as a way to help telco TV deployers such as AT&T and Verizon catch up with means to establish differentiation while they raced to expand their service deployments and feature additions.

But in the year since the product announcement, no telcos have confirmed their plans to test or deploy the product, including AT&T, arguably Microsoft’s largest domestic IPTV customer. Season after season passed with little, if any, news on the product, leading experts to question the vendor’s availability date.

While Heckart refused to disclose the nature of the delay, she seemed to downplay its impact on large telcos, saying IPTV deployers are first focused on “deploying the service they’ve already keeping up with deployments and demands.”

One possible reason for the delay could be Microsoft’s reorganization late last summer of three units dealing with entertainment and TV into one division. Another could be extra time and resources needed to strengthen and enrich the TV software, now called MediaRoom, that is critical to its customers’ deployment of TV services.

The software, which serves as much more than IPTV middleware, has faced challenges in the area of scalability, and sources have told xchange that much work was required, at least initially, to get the code to scale for large deployments.

Microsoft Corp. www.microsoft.com 

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