Kinect - a first step to reconnect Microsoft with youngsters ?

Microsoft has announced a 240M$ writeoff in their last financial announcement due to KIN mobile phone project cancellation. What appears to be a huge amount for any company is just a drop in the ocean of Microsoft revenues.

This week, Global Equities Research analyst have downgraded the note of Microsoft, not for this writeoff but for what sits behind. Microsoft is losing ground on Office battlefield in education, public and call center sectors (which represent 10%). Moreover, companies more and more give the choice to employees to choose a MAC or a PC.

But the tough statement does not sit in immediate market share or price erosion. As outlined in a previous post, it's much more dangerous long term than short term. Analysts outlines the danger : "Microsoft is unable to connect with the new generation of users. This could cause problems down the road." KIN phone cancellation is just an additional proof point. Microsoft software appears as old-fashioned for youngsters.

But Microsoft is not yet dead. Thanks to huge cash and some current projects, Microsoft certainly can recover if they play the right card. This reconciliation card can be found in 3 packs : mobile, Internet and games.

In the area of game console, a commercial name - Kinect - has been assigned to the "Natal research project". Thanks to Kinect XBox add-on (yes, it works with an existing XBox), you can live a kind of Wii gaming experience without the need of a Wimote. First Kinect Games are announced before Christmas.

On the techno side, even if Kinect could be a huge technological step forward for visual movement detection, it lacks the vibration feedback proposed by game console accessories, Wimote and ... mobile phone games.

On the business side, Kinect still applies the old gaming business model - a game console partnering with top game editors. We address within another post the missed opportunity : a "Kinect app store" linked with a decent "Kinect developer program" for any developer to leverage the assets of this technological breakthrough.

Even if the experience is nice and movement detection accurate enough (still to be proven ...), this project can only be a first step. It will certainly not be sufficient to reconcile Microsoft with a generation. Still a long way to go for Steve Ballmer, much more in terms of mindset than in terms of technology, before Microsoft becomes hype within communities of digital natives.

To be continued ...

Benoit Quirynen