Will Microsoft Conquer The Family Room?

The sleeping giant may have been awakened... Apparently Microsoft is looking for engineers to help expand Silverlight on the Xbox 360. (They've already brought Silverlight there to serve as a platform for streaming media and especially advertising.) Or, in other words, they are planning to bring an App market to the Xbox 360, since Silverlight is the primary development platform for Windows Phone 7. Given that they've already said there will be a high level of integration between Windows Phone 7 and Xbox Live, the corollary is obvious: Microsoft wants to bring an App Market to the family room.

Anybody with half a cerebellum knows that Google and Apple are going to be selling Apps in the family room, and that games will be the most popular apps by far (just look at the mobile market). The console makers already have hardware in the family room, by the millions. What they don't have is the business model. It looks like Microsoft is figuring out that they have a head start in the race for control of the family room; all they have to do is start running.

Of course, if Microsoft really wants to compete with Apple with apps, they have to meet or beat Apple's environment. That means no big upfront fees to develop (Apple charges $99); no huge bureaucratic process to wade through for app approval (Apple's process is not transparent, but for the most part you just send in the app, wait a few days, and it's in the store); a reasonable cut of the revenues (Apple takes 30%). Microsoft can certainly improve on what Apple offers, certainly in the realm of helping customers find apps. App markets in general have poor interfaces and limited tools for finding apps you're interested in. And don't neglect the importance of in-app purchasing!

With some work, Microsoft could use this effort to jumpstart interest in the Windows Phone 7 offerings, and perhaps build up some market share worth mentioning. (Unlike Zune.) What's holding Microsoft back? Perhaps the prospect of thousands of low-cost or free apps and how that might hurt the business of selling higher-priced games. Well, as they say in business, sometimes you have to eat your own young, or your competitor will. Better for Microsoft if they're the ones revolutionizing the business model, rather than Apple or Google.

Of course, if Microsoft is just looking to hire someone now, that means they're quite a ways from actually having something. They are late to the party, given that Apple can flip a switch at any time and have an App Store going on Apple TV.

2011 is going to be a very interesting year for game developers and marketers.