Do you see the above? I declare that we call it the Vapor Wand. It is because it doesn’t exist. Journalists might insist that it does exist. But until it ships, it doesn’t exist. It is the Vapor Wand.
Most companies tend to be quiet about their new products. They don’t want the competition to steal their ideas. They also like to surprise consumers. Nintendo does this. Apple does this. Even Sony does this. Microsoft does not do this. Instead, Microsoft has a history of feeding the press information to create clouds of vapor that hide reality.
This is the pattern of Microsoft:
1) Months or years before a launch of a new product, Microsoft begins floating vaporware concepts to the press. These vaporware concepts all suggest great and better capabilities than the standard product at the time.
2) Once the journalists has “leaked” this information, pundits then go wild with speculation about how the new Microsoft product will change the market and how it will affect the non-Microsoft market leader. Editorials are written and message forums catch fire.
3) The vapor will keep shooting out, like bad wind, into the press and into news cycles until the vapor runs out. Then Microsoft comes out with an unfinished, expensive product that imitates its competitors.
This cycle will go on and on. In the 90s, it was successful. Since the 21st century, it has not been. After the delays of Longhorn, when the final product of ‘Vista’ came out, consumers instantly recognized it as an unfinished, expensive product that imitates its competitors. The response was, of course, “Wait until the Service Pack!” Once the vapor cleared and Vista finally came out, people could tell what it really was.
Surface, which is nothing more than a camera, a table, and a computer thrown together, was ‘unveiled’ as ‘Minority Report’ becoming reality. It is not only still vaporware, but remember that Surface was ‘unveiled’ as a response when a slew of hard hitting stories appeared hurting Microsoft. (Surface appears to be used by Microsoft as an ‘innovation trophy’ to prove, since doubters of Microsoft have increased enormously, that Microsoft is ‘innovative’. Look! Surface is appearing in five hotels! It is really mainstream now! *rolls eyes*)
Whatever happened to Microsoft’s Mira? Remember that?
Do you remember Microsoft TV? It’s gone. So is SPOT. And so is HD-DVD (did it really have a ‘chance’ against Blu-Ray?) even though Microsoft did everything it could to show that HD-DVD was ‘winning’ when it never was.
When Microsoft attempted to compete against Google’s Book Search, it made Live Search Books and Live Search Academic. They scanned millions of works. Then Microsoft pulled the plug on it. Why? There was no quick return on it. Active Authoring Format, Surround Video, and DirectShow are more examples of this.
How can a company like Microsoft get away so easily with moving the press around like pawns? It is because journalists love getting scoops. It is hard to resist a story from an ‘insider’ about something Microsoft will do. It is also hard to resist a ‘leak’. Remember when the Xbox ‘leaked’? Or how about the Xbox 360? How about its images? How about the Zune ‘leaking’? Or what about all those ‘reports’ of Microsoft’s new gaming handheld that never emerged? What about the ‘leak’ of the Newton, a Xbox 360 motion controller? What about the ‘leak’ of Avatars?
Cynicism is a healthy habit. It is an assumption that Microsoft wants to keep secrets like other companies. This isn’t true. Remember, Microsoft doesn’t make its money from consumer choice. Windows is bundled with new PCs. You buy a new PC, you get Windows. On a massive volume scale of selling new PCs, as well as Microsoft Office, to corporations and homes, it is clear to see the massive amounts of money pouring into Microsoft’s coffers.
Microsoft’s massive amounts of money gives it an image of ‘business awesomeness’. Battles during the 90s such as the demise of Netscape to Microsoft was able to give Microsoft the aura of ‘Goliath’ stomping on puny little companies. However, that success was also attached to the bundling with the operating system. Internet Explorer was intertwined and shipped with Windows making Netscape unable to compete. When the battle is not connecting to the operating system of Windows, such as Google, such as Sony and Nintendo, such as Apple’s iPod, the results are the same: Microsoft always loses. Or, rather, customers always choose a product other than Microsoft.
But remember the goal of business is not to make money, it is to make customers. And Microsoft has shown that it has big problems doing this.
Ever hear the story of Microsoft getting caught stealing Quicktime code? Microsoft and Intel were attempting to equal the performance of Quicktime on Mac. Eventually, Quicktime was ported over for Windows by a third party. Now instead of attempting to equal the performance, they had to one up it.
Years passed and both Microsoft, and Intel toiled away and were still behind. Microsoft and Intel then hired that third party (who did the Quicktime port) and told them to use the code they still had. With all the money being waved under their nose, the third party did just that.
Microsoft was caught so well that they had to do a public about-face. Microsoft paid an ‘undisclosed’ sum of money to Apple, had to make a public endorsement of the Mac platform, made a $150 million dollar investment in non-voting Apple stock, continue to publish Word on the Mac, and then share certain codebases with Apple.
Bizarrely, this was twisted into Microsoft saving Apple. With how much Apple stock rose since then, Microsoft made out like bandits when they eventually were able to sell.
The point of all this is to show that Microsoft is operating very differently than other companies. It is the ASSUMPTION that Microsoft has closely guarded secrets which, if it went out, would ruin it or spoil a surprise. Apple operates that way. So does Nintendo. But Microsoft does not. It is actually clever corporate strategy. In the nineties, Microsoft would put out ‘vapor’ of what it was ‘working on’, and many companies would not even try to compete. So Microsoft could defeat other companies without even putting out a product! However, this is no longer the 90s. Companies are brazenly competing back. The vapor is no longer working as well.
Aside from putting out imaginary superior products to conquer mindshare, vapor is also used to confuse issues. Why would Microsoft want to make certain issues fuzzy? Well, it would be issues that are not favorable to Microsoft.
For example, take marketshare for computers. Microsoft would like everyone to think that the marketshare for computers is something like 95% Microsoft, 2% Apple, 3% whoever else. But the reality is that computers are two products: hardware and software. Microsoft doesn’t make the hardware for computers. A company like Apple does not compete against Windows so much as they really compete against Dell, HP, and other hardware manufacturers. A better representation of computer marketshare would look like the below chart. Since Microsoft is only on the software side, it gets halved. Since Apple makes both hardware and software, it doubles.
The chart still shows Microsoft as the largest, but this chart doesn’t say ‘invincible behemoth’ as say a chart with 90% Microsoft. Add in the mobile PCs such as cell phones, including Windows Mobile as well as Apple’s iPhone, and computer marketshare twists again. But that is for another subject.
There was a time Microsoft had 100% of the Next Generation console market (Xbox 360 was out a year before PlayStation 3 and Wii). The PS2, which was still outselling Xbox 360, was magically ignored. But we got a parade of press releases on just how awesome the performance of first year Xbox 360 was (when analysts really knew it wasn’t doing too well). We can see how Microsoft stuffed the supply channel in order to say it “sold” 10 million consoles at the end of 2006.
In reports to investors, more and more analysts have expressed their annoyance at Microsoft’s ‘huffing and puffing’ on the trumpeting of the Xbox 360. There is so much fog shot out that makes it less clear to see what is going on. The extent of this can be seen at Microsoft’s Press Conference at E3 2008 by, still, declaring Xbox 360 the most sold system in America when only a few days later everyone knew Wii installed base would surpass Xbox 360’s. Sony would have never said something like that (at least, not days away). Nintendo wouldn’t say that. No sane company would. But Microsoft does because it has the intent to create vapor, not sense.
In a recent event, just as I tease my cat with a ball of catnip, Nintendo toyed with the hardcore of sales figures. Nintendo said, “We sell the most third party software” and showed a graph which showed first and third party software sales. Nintendo said…
There is an assumption out there that just simply isn’t true… We’re setting the record straight. This is fact. We are selling third-party games and they are doing very well, and better than our competitors.
The hardcore had a cow over this chart. “Durrr, Nintendo! Don’t put first and third party software together!”
Bouncing the catnip ball in front of them, Nintendo then smoothly puts up this chart:
Hardcore, never admitting they opened the door into their face, began moving the goal posts around saying, “Yeah, but… what about taking out Guitar Hero 3? What about taking out the casual games? What about taking out the shovelware? Etc. Etc. Etc.” But everyone knew the hardcore were moving the goalposts around.
Nintendo selling the most third party software should be pretty obvious when their installed base became the largest. Obviously, if there are more consoles out there, more software for that console will sell. The software potential for the Wii is even higher than usual because there are more active Wii gamers in the household which means even more potential software to be sold.
Microsoft’s reaction to this is why I call them the Kings of Vapor:
Microsoft has hit back at claims made by Nintendo that the Wii sells the most third party games, saying instead that it’s Xbox 360 sells the most.
Last week, Nintendo of America’s vice president of corporate affairs, Denise Kaigler, defended the Wii’s third party sales saying, “We are selling third party games and they are doing very well, and better than our competitors.”
But according to NPD information obtained from Microsoft by GamesIndustry.biz, that Nintendo claim appears to be wrong:
- Total third party sales for the Xbox 360 since launch is currently 67,929,999 units, followed by the Wii at 33,394,311 units and the PlayStation 3 at 19,976,325 units.
- Third party sales for the Xbox 360 since the launch of the Wii and PS3 is 54,065,728 units, still almost double the Wii’s 33,394,311 units.
- If you take the total number of units sold and divide that by the number of titles released since November 2006, the Xbox 360 and the PS3 are selling more units per title on average than the Wii. This puts the Xbox 360 at 217,252 units per title, the PS3 at 156,065 units and the Wii at 132,517 units.
“No matter how you slice it, the Wii third party game story is not a pretty one,” commented David Dennis, group manager of corporate PR at Microsoft’s Interactive Entertainment Business.
Nintendo’s charts showed sales by having it launch aligned. Microsoft’s Xbox 360, being out a year before, has been selling software for an additional year. It is as absurd as Sony putting out a press release saying PS2 has higher software sales than all consoles because it was out longer. Microsoft then tries to point out software only when Wii and PS3 launched which means by this metric, Microsoft starts counting software sales when Wii and PS3 start with 0 installed base while Xbox 360 already is around 7 million. The third bullet point does the same thing as the second bullet (by starting at 2006 when Xbox 360 had an installed base where other systems didn’t) and divided by software released which harms Wii since Wii has the most software released (creating a larger number to divide with).
Why didn’t Microsoft just say, “Xbox 360 has the largest software attachment rate…” or something else? Why did it put out these crazy bullet points? Nintendo responded yet again saying that launch aligned comparisons are the only way to go (which makes sense especially to the crazy comparisons Microsoft did above).
Microsoft is the King of Vapor. The purpose with these bullet points is to OBSCURE and FOG what is really going on: that most third party software is selling on Wii. When Microsoft can’t trumpet something, it tries to create a mist around the offending fact.
“But Malstrom! They have to know smart people will easily cut through this statistical jelly with the clean knife of facts.”
Yes, they know. But by putting out something that says otherwise to what Nintendo said, Microsoft can put out doubt. They don’t want people to declare, loudly, that Nintendo sells the most third party software. Not only would that hurt Microsoft’s case (for they sure did crow about third party sales on their console since it launched), too much money and marketing has been spent on framing Nintendo as systems where third party doesn’t sell. They can’t let that all go.
Now, if you have read all of the above, the following should illustrate itself. This is from Joystiq’s Xboxfanboy:
Take it for what it’s worth, but we’ve received a tip from a source close to Microsoft’s marketing department who has shed some light on the Xbox 360 price cuts that are rumored to be going down in a few weeks time. More specifically, the $199 Xbox 360 Arcade bundle.
According to the source, Microsoft will be positioning the Arcade bundle to be in direct competition with the Wii, meaning that the marketing push behind it will focus on family friendly entertainment. With family oriented games on the packaging, the Arcade console will come packaged with the traditional Arcade goodies (512MB memory card, etc.), the new Fall update pre-loaded as well as a motion controller and a few motion controlled mini games developed by Rare. That’s right, a motion controller! Supposedly, the motion controller will work with all 360 consoles and will even be sold separately, bundled with an even more expansive list of mini motion controlled games. This new $199 Xbox 360 Arcade bundle is said to release Holiday 2008.
File this all under rumors’ville for now, but don’t totally discredit the information. $199 Arcade’s are sounding very likely and, with Microsoft’s push to undercut the Wii, matching the Wii’s motion controls sounds like a total possibility. We’ll just have to wait and see.
They didn’t push for a tip. It was ‘recieved’ meaning Microsoft sent it to them. Worse, it came from Microsoft’s marketing department. Now how is it possible for Microsoft’s marketing department to send a ‘tip’ to a journalist as if it was a secret? They wanted this out there. Why? For more vapor.
There is no Xbox 360 motion controller. And until it actually ships, it is nothing but vapor. “But Microsoft and Sony are definately working them!” says a reader. That might be true, but they are working on many things as hardware divisions are supposed to. Nintendo is working with all sorts of things as well. But you don’t hear Sony and Nintendo Marketing putting out ‘tips’ about this or that is coming out. These companies don’t try to fog things up. But Microsoft does all the time.
Microsoft’s chance to counterattack was at E3 2008. However, it just fortified itself to attack PlayStation 3. It is over. 360 won’t be going against the Wii this cycle. However, that doesn’t mean Microsoft will stop putting out press releases or ‘inside tips’ to hint that…
…so very soon…
…Microsoft will release…
…the Wii Killer! *dum dum dum*….
…any time now…
…right around the corner…
…so lets all speculate about the rumor.
Such rumors have traction before an E3 where big announcements await, but now they are just nothing but smoke and vapor.
I ask myself, “How does Microsoft get away doing this?” I’ve discovered that people tend to have a habit to apologize for Microsoft, and this apologizing comes from the most surprising places. It comes just as easily to an Apple fanboy as to a PC user. It comes to a PlayStation fan as easy as the Xbox 360 fan. It comes easy to the mainstream business teachers as it does to even the disruption guys at Harvard Business School.
Microsoft was synonymous with the Computer Revolution. It was practically impossible to avoid Microsoft while being into computers with the huge success of DOS and later Windows. In the 80s and 90s, people who loved computers (including myself) wanted Microsoft to succeed because that meant computers to succeed. Everyone wanted a computerized world. This is my guess as to how people seemingly unconsciously cut Microsoft slack even if they are massive Apple fanboys. That and the mistaken belief that making tons of money means one is a business mastermind (whereas it is actually making customers).
Another interesting note is how you can detect a different environment with the handhelds than you can with the home consoles. You don’t hear DS owners hate on PSP owners and vice versa. Things are very civil between the handheld factions. Yet, the home consoles are not civil. There is so much whining about the Wii, PS3, and Xbox 360 that you would think the consoles just launched yesterday.
So why is there a difference? The handheld race has been long decided. Yet, the home console race has been decided as well. The DS has just as much ‘shovelware’ and ‘casual games’ on it as the Wii, yet why are gamers screaming about the Wii? The PSP is following a strategy similiar to the PS3 yet PSP is not yelled at as the PS3 currently is. The main difference between the handhelds and home consoles is Microsoft. I believe we can lay much of the blame of the ‘uncivilness’, the screaming, and the still constant bickering from the deep Microsoft pockets casting tentacles of viral marketers and spitting out inky vapor. If the console race was close, such as in the 16-bit days, the behavior would make sense. But it isn’t close.
On Wii and PS3 only sites, I constantly see comments bashing the system relentlessly. I wonder why people would go to one-console only sites if they despise that console so much. You dont’ see this behavior at the DS and PSP only sites. You don’t see comments at DS sites saying, “Nintendo abandoned the core to casuals,” or “I really wish the DS graphics were better. Man, imagine how awesome that would be.” Much of the continued commotion in the home console, uh, ‘discussion’ strikes me as ‘fueled up’ by outsiders (in the same way discussions of Xbox 360 motion controller and how it will change everything is fueled by mysterious tips to bloggers from Microsoft marketing). Yes, I am cynical, but I am getting tired of these loud PR statements and annoucements (or ‘tips’) about imaginary Microsoft products. I, too, can produce imaginary Malstrom Products which would be superior. I can also put out press releases about my imaginary products. See below:
Malstrom Provides Thrilling First Look at Top Secret Malstrom Product Portfolio for 2008, Hints “Malstrom Box” In Development
INTERNET – Aug. 23, 2008 – Today on the Internet, a super secret rumor emerged that hints that the incredibly handsome and funny, magnet to all women, the one who investors enjoy tossing millions of dollars with no strings attached, the demigod, Sean Malstrom, that a “Malstrom Box” is in development. The rumor suggests that the “Malstrom Box” will destroy the competition once it is released, and that Sony, Microsoft, and Nintendo better pay off Malstrom before he unleashes it upon the world.
Providing a dramatic close to the Console War, Malstrom’s “Malstrom Box” is the epic saga that delves deeper into humanity’s struggle for meaning and amusement and promises to take entertainment to a whole new level as a metaphor for how we live our lives in the 21st century.
In addition, the rumor was followed by another one hinting that the “Malstrom Box” will cost only $10, but supply will be limited so interested users are suggested to send pre-orders to Sean Malstrom personally (price of pre-order was not specificed. However, the larger, the better). In order to make sure you get your “Malstrom Box” on time, send a check to Sean Malstrom at this address…
How do you know my imaginary product is not better than Microsoft’s imaginary product? You don’t! It is all vapor. I can make vapor too.
So I hereby dub the Xbox 360 motion controller to, henceforth, be known as “The Wand of Vapor”. Until we actually see something of it, including software (and the software will not be easy to make), it doesn’t exist. We’ve seen more of Duke Nukem Forever than of Xbox 360’s motion controller.