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Paul McDougall
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How The Xbox Can Save Microsoft

The software maker controls one of the hottest brands in the tech industry—but it's not getting the most from it.

Microsoft has reportedly decided to kill the Zune franchise. If that's true, the only question is what took it so long. While the failed MP3 player may be the company’s latest flop on a growing list of them, Microsoft does have one consumer brand that's red hot—and it could lead a renaissance throughout Redmond if Steve Ballmer and team would only let it.

The Xbox is the hottest tech brand on the planet right now. If you don't believe me, ask the folks over at Guinness Records. They just named Xbox Kinect the fastest-selling gadget of all time. Indeed, Microsoft moved more than 8 million Kinect units in the eight weeks following its Nov. 4 launch. Take that, iPad.

The success of Xbox 360 and its Kinect hands-free control system stands in hi-def contrast to recent DOA Microsoft entries Vista , the KIN phone, and now Zune. As for Windows Phone 7, rumors of poor sales persist and Microsoft is cagey about shipment numbers for its new mobile operating system.

So what is it about the Xbox, which has been a solid performer throughout its decade on the market, that distinguishes it from Microsoft's more Hindenburgean efforts? And what lessons should the company take from it going forward?

For starters, and this is especially relevant now as Microsoft falls further behind in important markets like tablets and smartphones, it didn’t arrive late to the party. Xbox hit the scene in 2000, the same year Sony launched its next-generation gaming system, PlayStation 2, and a year before Nintendo's GameCube arrived. That was crucial, as it gave the Xbox franchise a chance to catch on with consumers and, as important, software developers before the market was flooded with rival wares. It also meant the Xbox never had to battle the perception of being a "me too" product.

Compare that track record to Microsoft's present day efforts—if you can call them that—in tablets. The company won't have a true tablet OS until late 2012, when it plans to release a version of Windows 8 geared toward the slate form factor. That's far too late in a market where the iPad is already becoming synonymous with tablet computing and Google Android devices are lapping up whatever's left over.

Another key lesson from the Xbox experience is that Microsoft didn’t try to shoehorn it into the Windows brand. Its cool, minimalist name, logo, and look meant that consumers didn't automatically associate it with a product whose very utterance conjures images of crashes, reboots, and inscrutable error messages such as "STOP: 0x0000007E."

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