Will Microsoft’s Living-Room Quest Finally Pay Off?

Most of the digerati remain skeptical about Microsoft’s (s MSFT) long journey to becoming a key player in the digital home. I can’t really blame them, given that the sheer number of swings and misses the company has undergone over the past decade may only be second to that of its hometown baseball team.

But recently the company has been swinging a hot bat, not only with its Xbox 360, which has been picking up momentum, but also with a legitimate holiday hit in the Kinect.

A few months of resurgence doesn’t excuse a decade of lost opportunity. But the Kinect, the Xbox 360 and Xbox Live do illustrate that, while Apple and Google are often seen as much more innovative and nimble when it comes to the digital home, Microsoft actually does offer compelling innovations that, every once in a while, it actually executes on.

And execution, of course, is key when it comes to staying relevant.

Source: GigaOM Pro

The above table shows some of the major Microsoft digital home initiatives over the past 15 years. I ranked each on a scale of one to five (one being lowest, five being highest) for both innovation and market execution. As you can see, by my rankings at least, where Microsoft generally falls down is on the execution front.

Case in point is Windows Media Center. At the time of launch (2002), MCE was a fairly forward-looking product, exemplified by the living-room-centric, 10-foot UI, not to mention the very idea of a centralized media hub. And while the product itself has found a dedicated following, Microsoft was never able to make Media Center a must-use technology. Part of this was due to lack of compelling content and confused OEM strategies, but also because the company could never build messaging around MCE to make it exciting to the mass market.

Finally, it needs to be noted that much of Microsoft’s vision for the past decade was flawed: The OS King clung to the outdated notion that the PC was the hub of the digital home universe, despite the fact midway last decade even Microsoft’s closest partners were looking towards a post-PC world.

But Microsoft — with its vast resources — had a few hedges on the PC-centric vision, one of which was the Xbox 360. And now, even the king of the PC has probably realized that its hedge has become the centerpiece strategy, one that it will need to leverage if it intends to remain relevant in the living room.

Will it be able to do so? Time will tell. The huge lead others have in mobile devices will continue to hurt, given that multi-screen is the new future for video, but a 42 million installed base of Xbox 360s — and a new hit interface in Kinect — could rejuvenate the company’s efforts just in time as the real battle for the digital living is joined.

To see my strategies for Microsoft to best leverage its competitive weapons for the living room, see my weekly update.

Image courtesy of flickr user Jamie3.org.

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