A while ago I wrote a spirited piece attempting to merge the best of Brian Arthur's Increasing Returns philosophy with some of Chris Anderson's ubiquitous Long Tail theory. To some extent the merger was also meant to sweep under the rug some weaknesses that I found in both approaches. If you are so inclined, you can read all 8000 words of it or simply let me sum it up for you here: in a platform war, the winner is always the one that delivers the killer app first and then does everything possible to give end users tools to develop and extend the value of their platform (the end of the tail). I called this the Increasing Tail strategy. Microsoft is, of course, the poster child for this. And Apple is the hat-trick contender (Mac, Newton, iPOD) for worst place in this game.
A few days after publishing this I got a great comment from Jim Plamondon which I ended up publishing. Turns out he had worked at Microsoft and was validating that they intentionally used (and funded) this strategy. Ahh 60MM funding or 20/20 hindsight - either one.
Well, the boys (and girls) in Redmond are up to it all over again with the XBox. Two announcements in a row should have Sony investors shaking in their boots. Not so much for what Microsoft can do, but what Sony has historically missed the boat on doing.
Announcement #1: Users can download games to the XBox across the net from a central store. New characters, weapons, demos, games, trailers, oh my! In case you blinked, the XBox in now a video game commerce platform!
Announcement #2: Any one and their first-person-shooting-grandmother can write their own games for the XBox and sell them online. The world of gaming box development, traditionally closed off to all but a few vendors, is now open to everyone.
Hold Increasing Tail batman! For anyone that can't see the correlation with their earlier dominance (Windows, Office, etc..) this is the exact same strategy. Build a platform (XBOX/Online Store), launch killer apps (Hello, Halo anyone) and then give away as many developer tools as possible so everyone can add to the end of the tail for you (XNA). If the folks at Sony and Nintendo miss the cluetrain this time, shame on them!