With over 80 million units sold you could say that the XBOX 360 was a runaway success, you could say that by offering living room apps such as Netflix, HBO Go, ESPN, Facebook and similar, Microsoft started to change the way that consumers interact with their living rooms. You could say these things, but you’d be missing an altogether larger opportunity that Microsoft disregarded, and from the looks of it, is doing so again with the XBOX one.

What I speak of is lowering the barriers to entry for XBOX application development. As it stands now, the platform is more or less locked up to established players and a handful of digital agencies who service these clients (you need an invite from Microsoft to develop on it). Whereas if Microsoft were to lower barriers to entry – i.e. $100 annual developers licence – it would allow for a massive influx of innovation on a living room entertainment center. Something to this day unheard of.

Consider this, the Kinect was embraced by hackers and developers – so much so that Microsoft publish a SDK (Software development kit) for it, making Max/MSP no longer a requirement to do amazing things with the hardware.

So begs the question, why not XBOX? And now why not XBOX ONE? With the release of this new hardware why not release a SDK for it, why not offer developers an API to XBOX live as well?

Time and again, fortune 500’s miss innovation opportunities by looking inward and keeping systems closed. However, in the case of XBOX/XBOX ONE and Microsoft the missed opportunity isn’t only in scope of living room innovation if you will – Redmond is missing out on potential revenues in the billions of dollars. ITunes anyone?

But what types of apps could exist on a home console? XBOX one allows for multitasking, so aside from the obvious indie games, you’ve now got a whole world of opportunity in front of you. Game specific social networking applications, game walkthrough applications, news applications (i.e. flipboard), music applications that integrate with the games you’re playing (Listen to actual internet radio while diving around in Grand Theft Auto – you betcha). In short, we would be limited by the crowd.

Microsoft sits on a choice that can impact the way we interact with our living rooms, and with the recent release of XBOX ONE the time could not be better, but the question is, will they seize it? At SWARM we for one sure hope so.