The big news this week in the tech world is Microsoft’s unveiling of its Surface line of tablets. For those who missed it, Microsoft had a major press event on Monday in which where it unveiled the 10-inch Surface tablets. The first tablet will launch this fall with an ARM-based processor and featuring Windows RT. It will be followed, about 90 days later, with a third-generation Intel Core processor running Windows 8. I am not the person to be reviewing new gadgets so if you are looking for more details on the Surface, please just Google Microsoft Surface and you will have great options.
Surface and social gaming
My interest is more about what the Surface will mean for social and mobile game companies. The short answer is it is too early to tell but it does point to the imminent fragmentation of the tablet market (my comments from MWC about how the tablet market will evolve from iPad-centric to a more fragmented market).
Will the Surface succeed?
Regardless of whether the Surface is ultimately a success, it will have an impact for the next couple of years. When Microsoft is committed to a market—and the tablet market is obviously important to them—they are willing to make a long-term investment (whether it will be successful is another story). It is in their roots, from the days that Word had minute market share compared to WordPerfect and when IE was being blown away by Netscape. I was in the game industry when Microsoft launched the Xbox, and although it got great reviews, it was hemorrhaging cash for years trying to acquire significant market share. For this reason alone I am confident Microsoft will be a major player in the tablet market for the next few years, and thus a potential platform for social games. History suggests, though, that it will not be an immediate success.
Industry leaders are definitely mixed on the Surface’s potential. John Passfield, an industry veteran and Creative Director at Red Sprite Studios, wrote “Microsoft needs to learn from Apple. Unveil the product, tell everyone the price, then say, ‘It’s available now!’ and watch as ravenous fans rush out and buy it. Don’t announce it and not mention price or release date or not show off any software and hope there will be interest sometime in the future when iPad 4 rumors are swirling around the internet.”
Whether it will succeed long-term is another question. A lot of people doubt Microsoft can be successful in a hardware business. They point to the Zune as a large investment in hardware that turned into a debacle. I would point to the Xbox as an example of Microsoft’s hardware success. As I mentioned, the company had difficulty on launch (especially outside the US) but has been able to build the Xbox into what is arguably the strongest current videogame console. The company did this by continually investing in improving the hardware, accepting losses early and spending a lot on developing a content ecosystem around the hardware.
More interestingly, Microsoft proved to be very innovative. The Xbox Live Arcade (XBLA) system really brought online gaming to the big time, before Facebook games, before Steam … really before everything. Kinect also took controllers to the next generation. I’m not making an official prediction with Surface, but the Xbox project shows that Microsoft can create a hardware success in a market that people feel is impenetrable (remember Sony’s dominance with the PlayStation and PlayStation2?).
Another common criticism of the Surface that I feel is overstated is that Microsoft will now be competing against tablet manufacturers it is trying to woo over to Windows 8. Although this may be true, look at who Microsoft is competing with to get hardware manufacturers’ support. Apple does not make their operating system available to third parties and Google owns Motorola, a much larger mobile hardware manufacturer than Microsoft’s internal efforts. While other manufacturers might not like competing with their OS provider, they just do not have a cleaner option.
All this said, there are still lots of reasons why the Surface may not be a hit. Many people have written about the consumer confusion with two operating system options. It does not have retina display; will that kill it, especially with those who love games? Will consumers respond to a new tablet that is priced “comparably”? Will the actual launch coincide with the iPad 4 and make it old tech on day one? With any big new product, there always questions until we see how it actually performs in the market.
What it means for social gaming
I would not bet your company one way or the other just on the Microsoft Surface; nobody knows if it will be huge. I am pretty sure it will not be a huge success on day one (unlike Apple, almost all of Microsoft’s successes have been built over time, including Windows, Office and the Xbox).
What I am completely confident in is that the tablet market will continue to fragment and game developers need to build that into their strategies. In a year or two, Apple will probably still be the market leader but they will not be nearly as dominant. There will be multiple tablets out there that fit specific niches and are viable outlets for mobile social games. It may be the Surface, it may be the Galaxy Note, it may be the Nook Tablet (which Microsoft also controls now), it may be the Amazon Fire, or it will probably be a combination. With these options, tablet growth will continue to accelerate, making it a great social gaming platform, but one much more complicated than today.
The Business of Social Games and Casino 