Will Microsoft control the seventh generation?

This last week was an important week in the Seventh Generation video system wars.

Sony's new PS3 got a bit of a rocky launch, due to the typical problems of availability of launch titles, kinks in the online play system, and so forth.

Nintendo's new Wii released with better availability (although I'm still waiting for the one I preordered), but apparently no online games whatsoever. A friend of mine who picked one up was disappointed with the initial set of games - the new controllers are apparently not instantly intuitive (more on that in a future post).

Meanwhile, what's Microsoft up to? Well, the last week saw the release of the Zune, which is both an MP3 player and an online store (kind of like that other company). Ok, the Zune is no iPod killer, but it's not a bad little device, and it does have a relatively large screen. And like other MP3 players, you can plug it into your 360 to supply custom playlists for your games, or just media to watch on your TV. Just a couple of days after Zune launched, the 360 added on-demand movie rentals/downloads for Xbox360, with TV shows, etc. The holy grail of digital distribution is continuing its painful birth, but having a networked box that's already connected to your TV and supports the growing HD market is a big plus.

It's hard not to look at the picture and think that Microsoft's got a good head start on the home entertainment market. Sony and Nintendo will need to play catch up for at least a year to come close to Microsoft's online gaming community, which has had a lot more time to mature. And Apple's new iTV will have an existing install base of all Xbox360's as a preexisting competitor, possibly one of the reasons Apple chose to announce it so far in advance of the actual release (although it's too soon to overstate this).

Still, I wouldn't call this one yet, not by a long shot. Here's my quick opinion on Microsoft's highs and lows, strategy-wise.

Pros

First to market - 360 wins this easily, although I personally believe the 6th generation gamers got short changed when Microsoft artificially accelerated the 7th generation.

Best online support - although 360 is the only service charging a fee for online play, they also have the only service actually worth paying for. See my Gamertag over to the right? That shows what games I'm playing, and how much I've accomplished in different games. Clearly I don't play as much as I might like to, busy guy, you know? But it's been a blast. The Xbox Live Arcade is a great way to spend time and money, media downloads are cool, lots of fun stuff.

Cons

There are a few biggies here, which is where I think Microsoft's positioning is going to not net as big an eventual market share as possible. I suspect this is intentional on Microsoft's part, as they'd rather have an ecosystem they control.

DRM - Both Zune and 360 have some ugly DRM issues. Zune abandoned the existing Microsoft customer base of DRM users for a whole new platform. Their cool new feature of sharing music wirelessly? Not so cool when any such transfer is automatically locked to three days or three plays, especially if it's your own track which you want to give away. And the new download system? Buggy, apparently - I get all sorts of errors on my 360 today trying to watch free previews. I assume this particular glitch will sort out after a few days. Still, I want to see my iTunes videos on my Xbox, my Xbox movie rentals wirelessly broadcast through my TiVo upstairs, or on-the-go with my PSP or Zune. (Nope, don't want to watch movies of my lovely iPod - the screen's just too small.)

More almost, but not quite there - Microsoft's announced the new XNA project, which lets users write their own games to play on Windows and 360. Fantastic right? Almost. First off, you have to pay extra to Microsoft to play games someone else wrote. And, you can't sell those games yourself. So Microsoft gets the benefit, but isn't really fostering the indie game market. Presumably the better XNA games will get offered sweet spots inside Xbox Live, but XNA will never go mainstream in the current form.

Limited/locked content - on demand movies (especially hi-def) rock. Unfortunately, the selection is still quite limited. And you only have 14 days to watch. That's not bad for a rental, but is it really essential to timebomb after 14 days? So what if it occupies my disk for a month - as long as the viewing time is restricted to 24 hours from when the movie starts, they know the movie hasn't been watched, and it's not sucking up their resources. This is just a blatant paranoid feature, totally unnecessary (but probably won't keep me from renting movies online).

My greatest hope is that Microsoft will open up their new ecosystems a little, and let more people play in their playground. (MusicIP Mixer on the 360 anyone?) If not, we're going to continue getting stuck in locked down entertainment silos, and that sucks.