Will Microsoft target Nintendo in the next generation?

[Millennium]

Under normal circumstances, I wouldn't think so. Microsoft's main purpose with the 360 is to try and recruit so-called "hardcore" gamers into the PC gaming market, while at the same time extending the Windows monopoly to set-top boxes. Nintendo doesn't care about set-top boxes and can survive in a wider market now, so there is no real need to compete.

But the current economic conditions may change things. So-called "hardcore" gamers can't sustain the console market by themselves anymore. Microsoft has no choice but to broaden its focus, and that will inevitably bring it into conflict with Nintendo. At the same time, it would likely also complete the process of converting the "hardcore," who will flee the tide of Other People onto what had been "their" platform, and they will have little choice but to go to the PC.

But if this happens, it'll only last for a generation or two. Microsoft cannot hope to lure anyone else onto their platform in significant numbers -the very things which attract the so-called "hardcore" repel other markets- and so, having failed to capture both markets, the 720 will not do well as a console. But by getting the "hardcore" onto PCs the platform will have completed its mission, and so Microsoft will then bow out of the console market and focus on Games for Windows.