Attacking the TV

Smith and Whitten first began talking about the greater potential of the Xbox in 2007, just as Microsoft began work on adding Netflix to the 360. "The very specific conversation we had then was, ‘this is the kind of thing that will be key to getting us out of the basement or second bedroom and into the living room,’" says Smith. But five years later, the Xbox has become a mainstream entertainment device and the challenge is breaking through to the next level. "If you want to be the soul of the living room, you really have to have a great TV experience," Smith says. "Otherwise people will just be switching you out on inputs."

But TV isn’t just something you can just add to a platform, like Netflix or Angry Birds. The heart of the TV industry beats with the blood shed from fierce negotiations between networks and cable companies, each of which have developed decades of expertise in raising prices, locking out competition, and forcing virtually all consumer-friendly innovation to go elsewhere. Just consider all the things happening around TV that have nothing to do with your cable box: secondary media players like the Xbox, Roku, PS3, and Apple TV have all exploded in use. Services like Netflix and Hulu have rethought the basic experience of watching TV with binge watching and automated recommendation-engines. Twitter is building a business around shared TV experiences. Movie rentals now happen entirely over the internet; Blockbuster just announced that it’s closing its last 300 stores.

"I want people to continue to have a relationship with their cable provider."

And yet, your cable box is still a piece of junk. If you want to get really depressed, think about the phone you had five years ago compared to the one you have today, and then think about how little the cable box under your TV has changed in that amount of time.

As long as Time Warner Cable keeps delivering new episodes of Mad Men and Homeland to people, though, there’s no incentive to change the system. And if Comcast decides to do a revolutionary deal to offer TV on a device like the Xbox, there are still hundreds of other cable companies with local monopolies in the US, and thousands more across the world. Even a company with Microsoft’s reach and influence can’t immediately disrupt the status quo at the scale of a product like the Xbox One.

"TV is still a very complicated technological roadmap for consumers, for companies, for regions and all that kind of stuff," says Whitten. "I actually don’t believe that there is one silver-bullet solution." Building a full-on DVR using the troubled CableCard standard in the US was quickly rejected, according to Smith; it wouldn’t work with satellite providers or in any of the other Xbox launch markets around the world.

So the entire Xbox One is designed around what you might call a bold compromise: instead of directly integrating TV, the system hijacks it. Rather than plugging your cable box and Xbox into the TV separately, you first plug the cable box into the Xbox, and then the Xbox into the TV. Your cable box is still there, and still doing all the heavy lifting of providing TV, but now it’s doing it in service of the overall Xbox One experience. Smith describes it as "augmenting" the cable box experience in an effort to eliminate the friction of switching between games, apps, and TV.

The biggest piece of the puzzle is the Xbox’s One Guide program guide, which lists "app channels" with listings for Hulu and Netflix alongside shows from networks like NBC and HBO, and which lets you browse and change channels by speaking to the Kinect. "We really built One Guide for the rest of the family," says Smith, "so the secondary users in the house start to use the console primarily for entertainment activities and increasingly for other things like Skype."

It’s a clever idea, but it’s also fundamentally a hack: your cable box doesn’t know anything about the Xbox One, so you’ll still see your cable interface everywhere even as you use the fancy new One Guide — during my visit Comcast’s UI popped up with every channel change. And the Xbox doesn’t have any way of directly controlling the cable box, so it has to simulate the IR commands of a remote control by cannon-blasting them out of the Kinect — in other words, you can change the channel and adjust the volume, but little else. "One of the things we can’t do is record shows," says Smith. If you want to use your DVR, it’s back to the cable remote. If you want to watch On Demand, it’s the same thing. The Xbox One might sit on top of your cable box, but it’s nowhere close to replacing it.

Jeff Henshaw It’s a clever idea, but it’s also fundamentally a hack

If this sounds familiar, it’s because it is exactly the same system implemented by Google’s ill-fated Google TV project, which launched to great fanfare in 2010 and has been slowly dying ever since. It’s also the same trick used by Microsoft’s own WebTV platform, which launched to similarly great fanfare in 1996 and painfully lingered on until finally being killed earlier this year. Hacking your own interface on top of the cable box is a great idea in theory, but history suggests different results in practice. I am not shy about expressing my doubts that the Xbox One will fare any better while I’m in Redmond:

Henshaw: We’ve built a really cool technology into Kinect itself, where it is emitting the IR codes… Nilay: It’s not a really cool technology. Henshaw: It’s a super cool technology. Nilay: It’s a super old technology.

Yet my persistent criticism doesn’t seem to faze the Xbox team. If a somewhat clunky TV integration is the price of being the primary interface in people’s living rooms, they’re surprisingly enthusiastic about paying it. "Our goal is to work with what people have today," says Henshaw. "We love Comcast, we love DirecTV, we love Time Warner, we love them all." Whitten agrees. "I actually think those guys do a good job," he says. "I want people to continue to have a relationship with their cable provider. I think that’s a great thing."

Whitten’s also not worried that people will be confused by the appearance of the cable interface while watching TV through the Xbox One — in fact, he thinks people will find it comforting. "I think it’s pretty awesome that if you plug your set-top box in, suddenly it gets these cool new features it hasn’t had before, like the ability to get a Skype call," he says. "That box, the one I’m super comfortable with and familiar with, just got a lot better for me."

And I am reminded again and again that the Xbox One platform is being designed to be around for a decade, and that it will change over time — with the implied promise that eventually you might not need a cable box at all. "As time goes forward, that integration goes deeper and deeper," says Henshaw. Smith agrees. "You get the most reach" by hijacking the cable box right now, he says. "Over time that will evolve."

And getting reach is critical — because if the Xbox One is big enough, Microsoft will have succeeded in putting Windows 8 and a Kinect under millions of TVs worldwide.