That was a nice read Final Fan. I especially enjoyed this question. Q: Do you see much of a long term future for Microsoft?s Entertainment & Devices Division? I saw that they just got a new campus and troubled projects rarely get new expensive buildings. Do you see that division ever turning a profit? So what do you think their overall hardware strategy is? Do you think that they will still be selling videogame systems and music players in five years? That new H&E campus says that MS is getting into consumer electronics in a big way, and you can bet they are working to refine a strategy of integrating their offerings into a digital lifestyle universe, with most everything covered that we could want to stay productive, connected and entertained. Not piece meal, like some companies seem to be approaching electronics. Look at Apple. They are doing great, keep rolling out innovative stuff, but what's their vision and strategy to implement? What's their roadmap and timeline? How does it all go together, work together? I can't tell from what they say or do. But I can see what MS is trying to do. They are just getting started I think. So yes, they will still be doing this in 5 years. But they really need to mature their business and change some blood in there. Hire some key people who have experience running large hardware companies who can put the right organization, process and infrastructure in place. If they don't, they may continue to have quality and operational issues that will really dampen their progress. And with all of the external challenges in consumer markets, even MS can't afford to be it's own enemy for too much longer. The bolded part is probably the most important thing to do. The people at M$ had no experience at producing hardware and it caused problems.
Xbox's mission statement is to preserve the Windows monopoly and extend it into the living room, as a media extender for a Media Center PC, along with a host of other MS and other company's hardware devices that fit into a digital entertainment lifestyle. MS has the bucks to keep losing money on Xbox for a long time, maybe forever. They've already lost around 6 billion dollars. How are they ever going to make that back on Xbox? They can't. Maybe they don't think they have to. That amount might be just 1 or 2 quarters of profit for an integrated hw/sw portfolio, with windows, PC Hardware, Xbox, Zune, TV, Movies, ads, etc., all providing some revenue stream to MS. You should check out their jobs site sometime. You can learn a lot about what they are doing. And their patent applications. They have a team working on making PCs now. That voice activated thing they did for Ford? Where do you think you will see that next? MS devices and sw is my guess.
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