When Microsoft came out with the XBOX I think allot of people were thinking (some still do) that they were just attempting to expand their PC monopoly into the living room. Depending on your experience with the company's products this might excite or scare you.

My theory however is that they saw the the home console as a threat to their home computer monopoly. Which would leave their income to the mercy of their buisness computer monopoly which is being threatend by linux.

For many who may be unfamilier with Microsoft's OS monoply on IBM compatible PC's. They have been blocking competition to their OS's with what's called the "applications barrier to entry". New OS's can't gain marketshare because they have little applications made for them, while symultaniously software vendors don't develope for new OS's because they have little marketshare. Another way competiton is blocked is through pressure on Original Equipetment Manufactorers (Compact, Dell, HP, Sony etc.) to only include Microsoft's software (this has included Internet Explorer and MS Office) in their computers and exclude their competiton. Failure to comply with their terms would result in higher license fees (of Windows) and in turn would result in loss of competitive pricing.

How could a home console threaten to break MS's home computer monopoly?

Home consoles are essentially home computers that are dedicated to playing games. But as they've evolved they have taken on many of the features of IBM compatible PC's. Most notably the abillity to connect to the internet. With that evolution it was only inevitable that they gain the ability to browse it. With more Web Applications becoming incresingly capable while more popular than Desktop Applications the applications barrier to entry starts to crumble.

When IBM compatible computers are being made obsolete by set-top-boxes and video game systems in the home computing space so to will the standard PC OS be made irrelevent to home computer users.

"We sees the "game system" (PlayStation 2) as a threat growing upward Into the PC space." - Microsoft's Michael Porter

No offense to you or whoever wrote this, but it's gotta be at least the ....wait.....

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 He's right though, and not everyone has thought about/ knows this stuff. No harm, no foul.

it was well known when the first xbox was launching that microsoft thought PS2 was becoming threat to microsoft's plans for living room dominance.

@liquidninja

Thanks for the insight.

And to the 2 above me, no, most people either don't know this or don't want to believe it. Especially 360 fanboys who want to believe that M$ is such a great company that has the best interests of their customers at heart, LOL.

M$ don't give a shit about console gaming or gamers for that matter. So Sony and Nintendo have consoles that to some degree threaten Windows. If M$ was confident in their OS they would simply work hard to make sure it stays ahead of the curve of anything the consoles have.

Healthy competition is good for consumers and it drives companies to innovate and make quality products. Unfortunately M$ will never see it this way and will waste billions of dollars trying to stomp Sony and Nintendo into the ground instead of spending that money making quality products.

At this rate, M$ is losing 5 billion $ per generation. Maybe after a few generations, they will finally back out of console gaming and let Sony and Nintendo do what they do best:)

Yes, I know. But...He's right though, and not everyone has thought about/ knows this stuff. No harm, no foul.

I thought it was to piss SONY off

I didn't know that. I just thought it was to pull people into buying more PC's so they could connect it to their systems.

i never said he was wrong