Microsoft: we will finish 2nd

[Final-Fan]

astrosmash said:
Coming from the Senior VP, this clearly wasn't just an off the cuff remark or a slip of the tongue; this statement is a sign of something. Keep in mind that MS has shown time and time again, in most industries it is a big player in that to them market share is king; to admit they can't reach first is very un-MS.

The simpliest, and least ground shaking would be if this is just softening up investors for the real bad news that could be coming when they end up in third. Yet that doesn't sound like MS. MS almost always (in all its business units), make predictions that are absurdly optimistic. For that reason, I feel it must be more than just this.

The next most obvious, as others in this thread have already predicted, is that MS may be giving up on gen 7 and already making plans for gen 8. With all the admiration they have been showing for Wii of late, if this is their plan bet on it being a wii clone (with HD and Live)

But I am going to put my money on the less obvious option (one I have floated before, and been critisized for); MS is openning the door to getting out of the console business after this gen. They will be resigned to second for a little while, then a year or so after PS3 overtakes them they will stop producing 360 and not make a replacement. MS has thrown billions into consoles, and in the process achieved their goal (knocking Sony down far enough that Sony can't own the living room). But what MS hasn't acheived is the kind of domination of the industry that works best with their business philosophy. So I think they will chalk those billions up as money well spent, then get out before it costs them any more.

I think the most obvious option is that it's clear to even the blindest fanboy that the 360 is not going to beat Wii sales in this universe.  So MS is just being absurdly optimistic but not insanely optimistic. 

As for your theory:  aside from the likelihood of MS dropping out of consoles next generation (which I judge to be low), there is no reason that MS would abandon the 360 until it stops being profitable -- and "1 year after the PS3 overtakes it" would be way too soon for that.