SmartGlass to Boost Tablet Sales
David is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
With the major press conferences at E3 behind us, it is time to start looking for general themes in electronic entertainment. My major take away from this year's event is the growing role of tablets in gaming and in the living room.
On Monday, Microsoft (NASDAQ: MSFT) debuted its SmartGlass technology. SmartGlass is an application that will work with Windows 8 to link smart phones and tablets to the Xbox. The app will work with iOS and Android devices, giving it a broader appeal than a Windows-only release would have. During their press conference, Microsoft demonstrated SmartGlass's ability to resume Xbox content on a tablet or phone and vice versa, to recognize content playing on the Xbox and automatically beam supplementary content to the phone/tablet (a map of the “Game of Thrones” world was beamed to the tablet while the show streamed), and to enhance game play (by drawing custom plays for Madden '12). With SmartGlass, Microsoft showed that the tablet will not only be an important portable device, it will also be essential to the way we consume content within our own living rooms.
While Microsoft scratched the surface with tablet/video game integration, Nintendo (NASDAQOTH: NTDOY.PK), with its Wii U Gamepad, dug much deeper. The highlight feature of Nintendo's Wii U is the Gamepad, a game controller with a built in tablet. Although the Gamepad is not a traditional tablet (it cannot operate apart from the Wii U), it is sufficient in demonstrating the potential of tablets in gaming. Specifically, the dual screen provided by the Gamepad allows for asymmetric gaming, a gaming paradigm where one or more players interacts with the game differently than the other participants. For example, in one Nintendo demonstration, the game was designed so that four non-Gamepad players (ghost hunters) searched for the Gamepad player (the ghost). The extra Gamepad screen allowed for the ghost to operate without necessary giving away its location to the other gamers. The allowance for asymmetric gaming that a second screen provides opens many new doors to game developers.
Capitalizing on the Trend
I believe that Microsoft and Apple (NASDAQ: AAPL) will benefit most from this trend, which should motivate many gamers to buy tablets they might otherwise would not. Obviously, Microsoft's decision to open its SmartGlass application to iOS and Android devices benefits those tablet makers, allowing more functionality for their products with no additional costs. Moreover, since Apple is the dominant player in the space (and I see nothing on the horizon to change that), I believe Apple will benefit the most from any additional gaming-related tablet sales.
Additionally, Microsoft has positioned itself well to capitalize on a major possible gaming trend, asymmetric gaming. Ironically, I believe the area best demonstrated by Nintendo at E3 will ultimately be their undoing. The gaming dynamics Nintendo displayed, while interesting, are easily copied by Microsoft using SmartGlass. Since Nintendo's Gamepad will be far less functional than any tablet, I see customers choosing the Xbox/SmartGlass/tablet bundle over the Wii U/Gamepad bundle.
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