Xbox One and the Set-Top Box

On May 21, 2013, Microsoft unveiled the Xbox One, the successor to the somewhat long-on-the-tooth, but still awesome, Xbox 360. I watched the reveal and was pleasantly surprised. I really didn’t know what to expect, and hadn’t given any thought as to what I might wish for from the Xbox “720/Infinity”, as it was being called prior to release, but what Microsoft demonstrated was pretty spectacular and I think represents a watershed moment in home entertainment.

The biggest change is how the Xbox One will bring together all of your entertainment content and push it through an integrated user interface (UI), providing a cohesive interaction experience. The 360 sort of does that now, but not nearly as well as the One. “Xbox, watch TV. Xbox, play game. Xbox, watch movie. Xbox, what’s on ESPN? Xbox, show guide.” Yep, that’s all you’ll need to do to switch between the content you want to watch/play, including games, movies, and television. And there are hand gestures to go along with the voice stuff.

Wait, what? Television? Yes, television. The details haven’t yet been released, but the Xbox One will integrate with your current set-top box (STB) from your favorite satellite/cable provider (SCP). Likely you’ll plug your STB into the Xbox and then the Xbox into the TV, so the Xbox will intercept the signal from the STB and do whatever it needs to do with the data and then pass the results to your TV. It would be nice if the Xbox could completely replace the STB, and ideally that’s what should happen, as I’ll explain, but it’s complex technically and there are lots of business and economic reasons it’s likely not going to happen this time around.

Since the beginning of subscription television, the SCPs have proven time and again that they have no idea how to make quality, well-designed STBs with attractive interfaces. Most of what we’ve had over the years should be used in design school as examples of how NOT to design a product. The latest STBs are certainly much better, but even still they leave a lot to be desired. The SCPs are good at negotiating content distribution contracts with content makers, building out networks (questionable), and charging you a lot of money. They should stick to that. Leave STB design to companies that can do something meaningful with them, like Microsoft with the Xbox One.

The benefits of outsourcing STB design and production include:

  • Lower cost to the SCPs because they no longer have to design crappy hardware and user interfaces
  • Lower cost to subscribers because they no longer have to pay for crappy STBs with crappy user interfaces
  • Better production economies of scale because you might have a handful of competing STBs rather than 36 for each provider
  • A better designed, better looking, STB
  • A better designed UI, which would provide a better user experience and should improve user satisfaction
  • The inclusion of a cohesive entertainment ecosystem rather than a stand-alone content service
  • Some assurance that you’ll get timely software updates rather than be stuck with the same old thing year after year until your box “randomly” breaks

And branding isn’t an issue. The SCPs use the set-top box as part of their marketing effort. That’s why their program guides are heavily branded. When you pull up the guide you know exactly who your provider is. But this can be accomplished by branding the program guide in the Xbox One. Since the UI is just an overlay on the data, there is no reason the program guide couldn’t be branded to the provider. If I pull up the guide, there’s a big Verizon FIOS, or Comcast Cable, or DirecTV logo, with their colors and everything.

Perhaps this is wishful thinking at this point, but in my perfect world the satellite and cable companies would get out of the set-top box business and leave it to companies like Microsoft that can doing something amazing with them.