Xbox father blames Zune failure on blinkered music industry

Ex-Microsoft exec and shepherd of both Xbox and Zune, Robbie Bach, has admitted that the Zune PMP was a cavalcade of mistakes, though argues his entertainment division team did try to replicate its successful gaming strategy with its iPod rival. Speaking at a Northwest Entrepreneur Network event in Seattle, Geekwire reports, Bach described the Zune project as "probably universally viewed as less of a success" than Xbox, though denied that either had succeeded or failed because they were part of the Microsoft behemoth.

With Xbox, Bach explained, the team had capitalized on Sony's mismanagement of the PlayStation project, particularly in how it evolved from the PS2 to the PS3. Microsoft took the decision – not universally understood within the firm – to differentiate the original Xbox in two key ways, including a hard-drive and skipping an integrated dial-up modem in favor of an ethernet port.

"In 2001, this is not a joke, we were in a meeting with Bill (Gates) and a bunch of the rest of the senior staff, and we said, we made a decision to take the modem out of Xbox. Bill said to us, that's the craziest thing I've ever heard. So we had a three-week email debate, and had to go back and have a meeting and convince Bill that taking the modem out was the right thing. Today, some people in the room probably don't even know what a modem is" Robbie Bach

That disruptive strategy struggled, however, when Bach's team attempted to use it against Apple and the iPod. The exec, who left Microsoft in 2010, argues that Apple had left few loopholes in its own media player strategy, unlike Sony, and suggests that while the gaming industry was keen to see a big-name rival to the PlayStation, the music industry was less cognizant of the risks of putting all its eggs into one basket.

"It's not like we didn't try but — I don't know how to say this politely — the music industry just didn't get it. They just didn't figure out that being dependent on Apple was bad for them. And they were so hooked on the drug of what Apple was supplying them that they couldn't see past that to realize that they needed something else to actually drive their business. The label business, the music industry, has never recovered from that" Robbie Bach

In the end, Bach says, those differences in the broader marketplace had far more impact than Microsoft itself. "The reason one succeeded and one failed had nothing to do with them being part of Microsoft" he concluded. "It had to do with the fact that the batting average at startups is actually not that high. The bar is high to be successful."

Bach was instrumental in setting up Pioneer Studios at Microsoft, a so-called skunkworks department which operated with the startup ethos and was the force behind innovative projects such as Courier. Microsoft shuttered the studio a year ago.