Xbox Gives Microsoft a Head Start in the Battle for Every Screen

Given the relentless battles by tech companies to win new smartphone users, you would think that the tiny screen is the only one that matters.

Those battles are part of a larger war for three screens: smartphones, tablets and televisions. The most important facet of these devices won’t be the sharpness of the display or the sleekness of the design — they will, after all, essentially be the same: flat pieces of glass of varying sizes.

What we will want most from these screens is their ability to communicate with one another like a group of gabbing teenagers in the middle of school recess.

Media you will buy or rent online, like e-books, videos, games and music, should be able to flow flawlessly among these devices. Done correctly, you won’t have to do a thing. If your screens are woven together on the same operating system, they will be able to share media by speaking the same language.

Can we already see a winner? You might say Apple because it has popular smartphones, tablets and computers talking to one another. Google is further behind because while smartphones are using its operating system, that’s where it ends.

But when it comes to the living room, both companies are losing.

Apple each year sells a few million Apple TV boxes that transmit content to a television. Little wonder executives persist in calling Apple TV “a hobby.” Google’s attempts at television are as flat as the TV hanging on my wall at home.

Surprisingly, it’s the company that has been failing with the smartphone that may be the furthest ahead: Microsoft.

Microsoft has something Apple and Google must envy. It has sold 67 million Xbox 360 video game consoles and has more than 40 million Xbox Live members. According to Frank Shaw, Microsoft’s vice president for corporate communications, video consumption has grown by 140 percent each year on the Xbox since 2008.

Earlier this year, Microsoft announced that use of the Xbox for music and video streaming had surpassed online multiplayer game playing. Microsoft might not have set out to take over the living room, but the company seems to have done so by building a game console that morphed into a full streaming video service, with Xbox Live apps like Netflix and Hulu. Its new Windows 8 software for PCs communicates with the Xbox. (And don’t forget Windows PCs are still dominant.) An app on Windows Phone 7 can control and navigate the Xbox.

If only people bought Windows phones or tablets, Microsoft could declare victory.

If only.

Yusuf Mehdi, chief marketing officer for Microsoft’s entertainment business, said the company was now focusing its efforts on making the Xbox service flow even more seamlessly between mobile devices and TV.

“We want to make all your screens work together in a unique and seamless way, including the PC, tablet, phone and television,” Mr. Mehdi said.

“There is a lot of money here, too. With advertising and subscriptions, the TV business is approximately $450 billion, which is expected to soon reach half a trillion dollars.”

Money is why the company that figures out the living room wins the war. “The television is the most unevolved of the three screens in terms of delivering people new media,” said Gary Lauder, a venture capitalist specializing in TV-related investments. Whichever company ends up owning the living room, where most content is consumed, could own the entire sphere, he said.

As companies struggle to make advertising on mobile devices pay off, that little plot of land in your home, the one where everyone gathers around a rectangular screen with popcorn and pillows, remains valuable real estate. It could even end up being the most valuable screen of them all.