E3 Notes: Gaming Isn't Just About Gaming Anymore

The future is here, folks, and the gaming industry is the first to get us there. Today I leave E3, the gaming industry's biggest US convention. When all is said and done, roughly 45,000 people will have come through LA's convention center -- most of them as nerdy as you're imagining right now -- to play the newest games, demo the latest hardware, and collectively drool over hyper-realistic zombies, aliens, robots, and other baddies game designers have placed in our digital sights.

At this E3 we have witnessed more advances in living room technology than the cable, consumer electronics, or the computer industry (yes, that includes Apple) have managed to pull off in many years of trying. Let me summarize:

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I Have Seen The Future, And The Future Is Xbox Kinect

It's late, this is just a short note to let you know that today I saw the future and what I saw was so stunning I couldn't go to sleep without telling you about it first. The future is the new Xbox 360 that debuted at Microsoft's E3 press conference today -- not just the improved hardware which ships to stores today and costs the same as the previous hardware -- but Xbox Kinect. This is Microsoft's long-awaited full-body natural user interface (NUI) for the Xbox 360, previously codenamed Project Natal and now branded as Kinect.

Kinect is everything. Kinect is the future of everything. Kinect is to the next decade what the operating system was to the 1980s, what the mouse was to the 1990s, and what the Internet has been ever since. It is the thing that will change everything. Once we've all been Kinected, we will never go back. You'll shop, communicate, chill out, engage, and debate using technology that can see you, image you in three dimensions, and interact with you in ways that are cooler than the most far-out science fiction, yet completely natural. 

I could explain it, I could try, but I won't. Instead, I'll just encourage you to watch the last hour or so of the press conference yourself (though if you follow my link, you may also want to watch the first few minutes just to catch the pre-game interview with Felicia Day -- isn't she adorably nerdy?).

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Google TV Is A Bigger Deal Than You Think

It has only been a few weeks since Google announced it would create a brave, new world with its Google TV platform. In all the reactions and the commentary, I have been amazed at how little people understand what's really going on here. Let me summarize: Google TV is a bigger deal than you think. In fact, it is so big that I scrapped the blog post I drafted about it because only a full-length report (with supporting survey data) could adequately explain what Google TV has done and will do to the TV market. That report went live this week. Allow me to explain why the report was necessary.

Some have expressed surprise that Google would even care about TV in the first place. After all, Google takes nearly $7 billion dollars into its coffers each quarter from that little old search engine it sports, a run-rate of $27 billion a year. In fact, this has long been a problem Google faces -- its core business is so terribly profitable that it's hard to justify investing in its acquisitions and side projects which have zero hope of ever contributing meaningfully to the business (not unlike the problem at Microsoft where Windows 7 is Microsoft). So why would Google bother with the old TV in our living rooms?

Because TV matters in a way that nothing else does. Each year, the TV drives roughly $70 billion in advertising and an equal amount in cable and satellite fees, and another $25 billion in consumer electronics sales. Plus, viewers spend 4.5 hours a day with it -- which is, mind you, the equivalent of a full-time job in some socialist-leaning countries (I'll refrain from naming names). 

Google's goal is to get into that marketplace, eventually appropriating a healthy chunk of the billions in advertising that flow to and through the TV today with such painful inefficiency.

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How To Get People To Pay For Content

It's the most common question I get in my travels: Will people ever pay for content again? See what I had to say about that in a recent interview below (as posted on Paidcontent.org)

Implied in the question is a belief in some yesteryear in which people did pay for content. But the good news is, they never have and never will. That's the good news? Yes, because once we stop imagining that people will someday pay for content again, we can focus on giving them what they will pay for -- access to content.

It's what people have always paid for and it's clearly what they pay for now. Look deeper into the past and you find that people did not underwrite all the pages of content in their daily newspapers. Yes, they paid for the newspaper, but that's just because the newspaper was the only way to get efficient access to that much news and information. Today, instead of paying for newspapers, they pay for high-speed data plans to their homes and on their mobile devices as well as subscriptions to content from Netflix and their cable companies, accounting for 77% of their monthly spend on content. And they will pay even more for that in the future as 4G becomes a reality. 

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