Post E3 Keynote thoughts: Has Microsoft become victim to its own company culture?

Keynotes....sometimes all you can do is slump in your seat in disbelief.  We all suspected that the upcoming Microsoft E3 keynote was going to be a bit of a dog.  After all, Bungie is gone (to Activision of all places - but that's another story), Fable 3 has shown that Peter Molyneux is now officially fit for euthanasia and everywhere you look it's 'Kinect, Kinect, Kinect'...

However, there's always that small part of you (based on history) that Microsoft is actually just playing its cards close to the chest and is waiting for the opportune moment to shout 'SURPRISE!' with something good.  Well, that time has come and gone and it's looking increasingly clear that Microsoft has come to E3 (for the most part) empty handed.  Or rather, what they came with is camp, awful and full of children shouting 'yippee.'  

Watching Xbox conferences nowadays is nothing like the edgy, blockbuster music-driven extravaganzas of the launch days.  Instead, I find it reminiscent of waiting in line expecting 'Star Wars Episode 1' and ending up with 'Jar Jar Binks and friends.'  So why does Microsoft continue to pursue this mediocre path of diaper-laden living rooms smothered in motion-controlled fantasies of fluffy baby tigers and ecstatic toddlers full of blue Smarties?  Because that's what Microsoft is:  A company staffed by families.  In my line of work, I have known a few Microsoft people over the years (all good people, by the way) and even a few of them work in Redmond including some old high-school buddies.  

Funny thing about that is Redmond itself; it's a bit of a 'Disneyworld' of the tech industry where Microsoft employees live and work together in a giant, self-contained community of techno-nerds who spend their days punching keys for big 'M', drinking 'mochachinos' while attempting to beat yesterday's elliptical trainer record, attending organised 'social gatherings' and utlimately, falling in love with another Microsoft employee, getting married, having kids and enlisting their children into the R&D programme to earn a 20% discount on Mochachinos.  There was a great book written by Douglas Coupland inspired by one of these former Redmondnites called 'Microserfs' - in case you're interested.  Even more funny is when you mention Redmond to Microsoft staffers who work outwith (particularly in Europe); the very mention of the name provokes this weird facial expression; like they want to say 'Eewww Redmond' but don't want to put their own company down.  It's quite amusing to see actually and everyone, including Microsoft employees, will admit that Redmond is that one place that's reserved only for the most 'Ra-Ra' of Microsoft cronies.  (think Simpsons:'Scorpio/Globex Corp' meets 'PeeWee's Playhouse')

The majority of what Microsoft does is ultimately baptised in Redmond.  Whether it be the tech itself, the research, the marketing, the beta-testing or <gulp> keynote scripting, anything of note that happens out of Microsoft has done its time in Redmond first.  Therein lies the problem.  While I have much respect for the great minds that live and work in Redmond, (bear in mind that a lot of these 'employees' are millionaires in their own right) their lives are very predictable and safe.  Their peers are of the same breed and cloth and most of them will work together, hang out together, go to each other's baby showers and attend each other's birthdays including the birthdays of respective 2,3,4,5,6,7-year-old kids, etc.  I'd imagine that most of what they deem 'cool' and 'fun' is in the context of this lifestyle...and that can put a very weird skew on the world.  It shows in recent years, anyway.

My point in all of this is that Redmond itself is making Microsoft irrelevant in the market.  Of course, I could be WAY off base here, but I have a sneaking suspicion that, possibly as a direct result of Steve Balmer's 'go-company-go' directives, Microsoft is no longer paying attention to the opinions or fountain of research available in the outside world.  Once a powerhouse in exhaustive R&D, Microsoft has definitely changed gears since Gates left and I suspect that Balmer has stepped away from third-party research initiatives thinking that suitable representation of their target markets are accessible by consulting with the 'willing and able' in Redmond campus.  The problem with this is that even if you run the numbers, you end up forming a very narrow and skewed result set for your research.  Not an issue provided that you only intend to appeal to the people who actually work in Redmond along with the millions of middle-class American families that graft onto their lifestyle.  In fact, you'll sell quite a bit - but is it enough to focus on one key market any more?  No.  I don't think so.  Microsoft could be at risk of destroying itself with the very thing it built to make it a contender in the first place.  Can they turn it around?  Difficult to say.  They certainly don't seem to be listening to anyone outside of Redmond.