Microsoft: Xbox Success Hinges On Capturing Casual Market

Key Xbox 360 execs, from vice president Peter Moore on down, have made some revealing statements to Bloomberg today about the company's newfound desire to capture the casual market with price cuts and family-oriented innovative software.

If we don't make that move, make it early and expand our demographic, we will wind up in the same place as with Xbox 1, a solid business with 25 million people. What I need is a solid business with 90 million people. -- Peter Moore (emphasis mine)

When mom walks into the store and sees she can get a [Wii] with a game for $250, she sees it as a $300 value.
They've done a good job. -- David Hufford, director of Xbox product management

If you don't start building that content and reputation it never comes. I don't want to be pigeonholed as a hard-core machine. -- Albert Penello, director of Xbox global platform marketing

This message coming from these three men is fascinating, considering that if Microsoft wanted to be pigeonholed as a hard-core machine they would have done exactly what they did over the last few years. Selling a game console to mom because it's a good deal is one thing. Selling game consoles to mom because she wants to play it is a new one, and it's because of the Wii's strategy, which was a concerted effort from all sides to attract new players. Xbox 360 is an expensive, complicated, high-end piece of machinery aimed at technophiles and people who like shooting things.

It wasn't a bad plan, really, until Wii came along.

That's why one of the things emphasized in this piece (and it's what's getting mentioned as this piece gets linked about today) is the possibility of a price cut. In the article, Hufford mentions that $199 is the "sweet spot." But even at the "sweet spot," what are you going to do when the content's not there? Viva Pinata tanked. The more time goes by without a family-friendly lineup, the less likely it seems -- especially with Nintendo absolutely gobbling up that market while Microsoft sleeps.

Roger Ehrenberg of Monitor 110 has some solid analysis on this piece this morning, pointing out that in his opinion, Microsoft has just woken up to the realization that they have been wrong, and that it should be very interesting to watch what they do now:

When you've got your Head of Interactive Entertainment, the Director of
Xbox Global Platform Marketing and a Director of Xbox Product
Management all publicly saying that they've got to crack the mass market and that lower price points are attractive, does this indicate a seismic strategic shift? I'd say so.

Only question is, is it too late? For all the talk about how the console wars are a "marathon, not a sprint" (this is usually gasped by the tired guy in last place with a bum knee), a whole heck of a lot gets decided in the first year. After building their HD Era, M-rated, Live-enabled strategy around the hardest of the hardcore, can they take that same machine and sell it to Grandma?

Microsoft Adds Xbox Games, May Cut Price To Woo Moms [Bloomberg]