By Nicholas Kolakowski  |  Posted 2010-12-23 Print this article Print



Microsoft has suffered some well-publicized missteps in consumer products. Its Zune HD, a portable media player whose design was praised by critics, failed to gain ground against Apple's iPod line. And the ignoble failure of its Kin social networking phones may have led to May's massive shake-up in Microsoft's E&D (Entertainment & Devices) Division.

"This has been a vampire division since its inception. A vampire division is one that lives off the value created by the rest of the company and, from a corporate perspective, does more damage than good," Rob Enderle, principal analyst of Enderle Group, told eWEEK in May. "Its profit, which wasn't much, was massively offset by the economic cost it caused to the corporation and needed to be rethought."

As part of the E&D reorganization, Ballmer appointed Don Mattrick as head of the company's Interactive Entertainment Business and Andy Lees as president of Microsoft's Mobile Communications Business.

Despite those setbacks, Microsoft has enjoyed one bright spot: the Xbox. Thanks in part to games such as the ever-popular Halo series, the console has managed to transition from a revenue loser to a strong seller. The Xbox 360 led the console market in sales midway through 2010, outpacing the Nintendo Wii and Sony's PlayStation 3.

However, the flagship Xbox 360 was also 5 years old, and Microsoft needed a way to increase its lifespan. The answer was Kinect, a hands-free game controller originally known as Project Natal. Kinect uses a three-dimensional camera to track 48 points of movement on the user's body and then translates those movements to a digital avatar.

Released in early November, Kinect proved something of a hit, with 2.5 million units sold within the first 25 days of its release. "We are on pace to reach our forecast of 5 million units sold to consumers this holiday," Mattrick wrote in a Nov. 29 statement posted on Microsoft's corporate Website.

There are indications that Microsoft intends to use that 3D sensing technology for a range of products besides gaming. In recent months, Microsoft acquired Canesta, a maker of 3D-image sensor chips and camera modules that can be embedded into a variety of consumer products, including laptops and vehicle dashboards.

"There is little question that within the next decade we will see natural user interfaces become common for input across all devices," Jim Spare, president and CEO of Canesta, wrote in an Oct. 29 statement posted on the startup's Website. "With Microsoft's breadth of scope from enterprise to consumer products, market presence, and commitment to NUI [natural user interface], we are confident that our technology will see wide adoption across many applications that embody the full potential of the technology."

During a Dec. 1 meeting in New York, Microsoft executives suggested to eWEEK that the company is indeed continuing its push into some of the same user-interface technology powering Kinect. In addition to gesture, spoken commands represent a substantial part of that evolution.

"Speech is a common key ingredient in NUI," said Ilya Bukshteyn, senior director of Microsoft Tellme, while suggesting that it would be "two to three years" before voice commands become a more ubiquitous factor in both the enterprise and consumer spaces.

Within that context, Kinect doubles as an investment in the future, a way for Microsoft to introduce consumers to the idea of gesture control. In the shorter term, Kinect has reinforced the Xbox as an example of Microsoft success in the consumer arena.  

Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.

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