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Microsoft: Winning Isn't About Winning

It's a simple question: is Microsoft poised to win the console wars?

Winning for Microsoft is really just competing, as their focus is still just to keep another industry giant from becoming the home entertainment PC, the box that hooks to your TV without running Microsoft software (just like it was in the days of Xbox the First). In that sense, Microsoft has secured enough of the market-but more importantly, presence in the market-that they will at minimum cockblock other companies from looking like undisputed entertainment leaders. Well, that's assuming Sony never gets their act together. And they are revving up in a major way and own a lot of their own entertainment properties.

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wil4hire3658d ago

They have the $ to blow though. Might as well do it.

Pain703658d ago

the losses in the entertainment division count for tax breaks against $91,000,000,000.00 in revenue. what do they have to lose? $90 billion is alot to pay corporate tax on! if anything, this hobby might just work!! not many corporations, Sony included, can take these kind of chances. and people say the corporate heads of MS are stupid. think again!!!

pukka_p3657d ago

If the intro is a quote, then this is a really badly written piece. If it's not a quote, then it's nonsense flambait lead-in to an article. Either way, it's not worth clicking on - actually I'm annoyed at myself for commenting...

mikeslemonade3658d ago

Oh so I guess for every generation from now on they are willing throw 4 billion dollars just to keep the living room entertainment away from a monopoly. Why would they do that if they are better off not making a xbox? They would have more money without the MS gaming division. If the next xbox the one that comes after the 360 doesn't make money they're out because clearly the xbox is only popular in the North America and it's not making them any money. And MS being afraid of Sony being a monopoly at living room entertainment is stupid because PS2 was as big as a win as any console ever created and that was far from a monopoly. And Sony is notorious for making high end products so no matter not everyone is going to buy Sony products. MS is just bitter because they have zero chance of catching up to the Wii.

BIadestarX3658d ago

"They would have more money without the MS gaming division."

"If the next xbox the one that comes after the 360 doesn't make money they're out because clearly the xbox is only popular in the North America and it's not making them any money" lol... wow!

You are obviously blind and a completely ignorant when it comes to business... I'm not sure if it's worth speind 2 minutes replaying to your trolling..

Ever heard the word "Investment"?

You see.. I don't have to call your comment stupid.. because it seems to be doing that all by itself, "the xbox is only popular in the North America".... last gen.. which console was the most popular? wasn't the PS2? The fact that microsoft will most likely be able to control the american market is better than what most people expected when considering how strong the playstation brand is.

How much did it cost microsoft to make Halo 3? 30-40 Mil? how much did they make so far $300 Mil? uhhh.. ahhh.. uhhh... do the math...

Which console is the primary development environment for most 3rd party developers?

Which consoles have the most games?

Which console got more games this month?

Which one have more AAA titles?

Yeah.. sure Microsoft spent lots of money on the RROD issue and the guarantee that delayed them from making money + the amount of money they are spending on marketting and bringing exclusive titles in Japan...

But it's obviously paying off... The xbox division is bringing so many revenue oportunity it's stupid to think that microsoft will simply drop the xbox that benefit microsoft across multiple divisions...

For example, the number of people registering with MSN.com just so they can use the messenger feature on xbox live? The money companies like Burger king are paying to use Halo 3 on their products...
companies advertising on xbox live... HD DVD drive sells...

Xbox live gold account which are even crossing into the PC world...

Dude... seriously... you Sony fanboy have no business orientation...

SmokeyMcBear3658d ago

ah blade, the more and more i see your posts, the more fanboy you sound, and less of a sound investor. Its quite simple really, and most companies tend to look at the bottom line. Is the xbox brand making any money. You state one game, out of the many. Yes halo has made 300 million, and development (alone) cost 40-50. 5 million sold, at 60 bucks a pop right, thats 300 million. Do you actually think that microsoft sees that 300 million? you gotta be kidding me, take a percentage off for the retailers, the people who actually made the game, its a lot less of a cut than 300 million let me tell you that. Was M$ making any money on the console before? Werent they taking a loss on each console sold? Factor in the $1 billion dollars they are setting away, and to be honest, i don't think that is enough man, the thing keeps breaking and breaking, it just won't end. Now the development of the falcon and jaguar? you think that is free?? no way, more research and development costs for a product that should not need it. If you really are an investor in Microsoft, the xbox brand is hurting your bottom line. It is taking away revenues from your holdings, and you are losing money. But I guess you are happy about that.

harpua3658d ago

Hey bladestar, when the MS gaming division turns a profit let us know. The bottom line is the bottom line, shareholders want increased revenues and higher dividends which the 360 is stealing from. Its not like the xbox was released last week, the investment period is over.

genericname3658d ago (Edited 3658d ago )

bladestar pwned again.....but lets face it, shooting fish in a barrel is harder.

drewdrakes3658d ago

Ill defend bladestar on this one, as i see him being right. You guys are short sighted. Microsoft isnt doing this so that their gaming division makes money, but so all other divisions make money. If they block these devices from becoming the media center, then microsoft's Media Center Edition gets bought more...more money for Microsoft. Microsoft isnt stupid, they have a lot of money, and why do you think that is...from losing money?

Primetimebt3658d ago

Your typical brainwashed M$ fanboy. 300 million still leaves M$ in red about 11.7 billion dollars. There RROD problem is only scaring would be buyer off fearing after 3 years there consoles with may meet it's grave. Also the fact M$ is quick to drop the support of its old console is not helping their cause. Plus There is no way in our lifetime M$ will ever come first in a console race when there selling 1-2K a week in the Japanese market where there nearly giving them away.

Sez 3658d ago

when was MS in he red of 11.7 billion. get you facts straight

BIadestarX3658d ago

@drewdrakes - don't bother with this Sony fanboys.. they can't see past a console... bubbles for you for being smarter then they are!

To them... they only see the xbox 360 as just a console... they are not capable of thinking about the benefit and revenues the xbox 360 can bring when people buy media center to stream video to their xbox 360... or IPTV... or live TV... or xbox live movie market place... or Zune... and all other projects we don't know about... now that microsoft managed to extend their presense into people's living rooms.

@SmokeyMcBlunt - you disapoint me... I really though you are smarter... funny.. how you sudgest microsoft to drop the xbox division.. just because they are actually doing some investing...
You actually think you are smarter than all the people working inside and out microsoft that believe that the xbox 360 is good investement for the greater good of the company. This is why so many people are broke @$$es in this word.. they try to secure $100 which they endup using in crap... instead of investing it and making 10 times more...
It's obvious that microsoft investing into new ventures worked well..

Funny... Microsoft is not complaining about their investment.. you are.. it's not your money... I have some money invested in microsoft stocks... do you see me complaining? what do you care?
Let us.. microsoft and us investors lose money.. don't worry so much about us..

If I were microsoft and have as much money as they have.. I would give the xbox 360 for $99 and invest all we can on now and finish this console war.. just so I can pee on Sony's fanboys head.
Now, that's not worth 4,8,16,.... Billion... it's priceless...

SmokeyMcBear3658d ago (Edited 3658d ago )

haha blade, spin spin spin away, I don't think ive actually said I wish that M$ would drop the xbox brand, If I was an investor, which I am not ( i have google woohoo, well only around 8000, but its a start meh too late, but thought too risky, doh), but I if I was an investor, you better bet that I would be hooting and hollering for M$ to drop the xbox brand. M$ mades its money in personal computer software, they did whatever they could to become the dominant force in that industry.. there is where they made their billions, and If i was an investor during the 90's I would be extremely happy with them. Now begins 2001.. and I see this little blip taking my revenues away. A little piece of the company that is draining money and therefor my profits. It has been doing this FOR 6 FREAKING YEARS. For 6 years it has been taking my money away, money away from the profits of the company and money away from my revenue gains. Now cmon man, if you were actually a shareholder from any company, and last minute add on division of the company, not anywhere close to the comany's core revenue generators, was milking the company of profits for over 6 years??I would be a little peaved. I don't think you too many business classes buddy, cuz if you did, maybe you fell asleep. Something tells me its mommy and daddy that have money invested in the company, and i think they could care less about sony fanboys

IntelligentAj3657d ago

Am I the only one who has seen Microsoft's most recent earnings report? The company isn't going to be hurting anytime soon. The game division will continue to lose money but Bill Gates has shown how devoted he is to staying in the game industry.

+ Show (7) more repliesLast reply 3657d ago
sunnyhours3658d ago

Off-topic, but don't know where else to post.

Wasn't there supposed to be some sort of "Big Bang" announcement by Sony today? Was it a bust?

Marceles3658d ago

That rumor was shut down a week ago by a SCEE exec

On topic...MS basically just pokes at everything so no one can have true dominance in a market. Zune with the Ipod, Xbox with PS and Nintendo, etc. I heard they're working on making TVs and computer monitors too. This guy on Kotaku's site has a pretty good point also...not sure about it "not harming the company" but...looks like they dont care that they haven't made profit from the Xbox yet

BY CRESCENTFRESH AT 02:22 PM

Success = profits. Microsoft is the rare case where they can piss as much money away as they please without making a dime, and it will never harm the company. Not many other companies could do something like that.

fjtorres3658d ago (Edited 3658d ago )

Is that winning a dominant market share is a good thing but winning a dominant market share at *any* cost isn't.

MS has been and remains willing to spend money to get into the game business but the objective has always been to make money. It is a business, after all. Assuming the other guy is not totally incompetent that means that there is going to be an ebb and flow of competition until a balance is reached and you get to a point beyond which it makes no financial sense to push your product.
With the original XBOX, that point was 25 million units.
With the 360, that point is probably somewhere north of 40-50 million.
If MS gets there, the question then becomes; what are the profits like? Enough to push on? Enough to justify a third round of XBOXes? Then you have a success and you "won". If not, then you've won nothing, regardless of how many units the other guy has sold at that point in time. Winning a (matket share) battle and losing the (profit) war achieves nothing.
Thus, there is "winning" and there is winning.

Over in the PDA arena, PALM made a big point of their market share.
Year by year, they bragged about having the largest installed base and the cheapest units and the highest sales rate. Every year they were content to know they were "winning" the sales war. Of course, that did't mean they always made money off those sales. Most times, that share came with snall profits or even big losses.
MS simply focused on growing their share of the market a bit each year and remaining competitive.
Eventually Palm screwed up and MS ended up with the majority share of the market.

Basically, its a stalker tactic; you keep the pressure on the enemy and wait until they make a mistake. If they make a big one, they die and you win. If they don't, you win by not losing.
Whatever anybody else can say about this generation of consoles, MS is not losing. They may or not be winning but they aren't losing.
That's victory enough for now.

mandrake3658d ago

That's a good point you make, but as these comments from MS itself confirm, MS's gaming division does not even have to be rationalized as a self-sustaining unit. I don't believe MS expects gaming to supplant its core business of software services, so while they may want to minimize losses or even make a tiny (relative to total gross revenues) profit, even if that doesn't happen, I don't expect MS to ever drop out of the console business. "Convergence" is the key catchword of MS's long term strategy, and the game division is expected to play a crucial part in this strategy. The Xbox is the beach head in MS general push from the office into the living room. MS will spend whatever it takes to defend it.

THE_JUDGE3658d ago

thats true. MS doesn't want us to have consoles in the future, they want us all to play on PC's. If they buyout and bully the gaming industry just like they have done the software industry then we'll all be play a PC in the future. Makes me sick!

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