The console market as it currently exists:
- Retailers do not generally make money on hardware.
- Software from third parties is charged a royalty.
- Online distribution is a growing but limited field.
Microsoft operates as a service/software company:
- Subscriptions.
- Services.
Microsoft does not really care about these in the console business:
- Hardware.
- End user software (Games).
Microsoft does care about these in the console business:
- Developer services in return for royalties.
- Consumer services in return for subscriptions.
So long as it connects through their services and uses their software Microsoft doesn't really care what hardware you use. The full name for the original Xbox 1 was direct X Box which was shortened to Xbox. Direct X or Direct 3d is a standard set down in agreement between ATI, Nvidia and Microsoft. The Xbox was always an extension or derivative of the Windows/Direct X platform for games and media. In fact the current Xbox 360 uses a modified version of the Windows 2000 kernel.
Consoles are dirty and proprietary things if you consider the relatively open world of the internet and computer operating systems in comparison. Its the one of the few markets in computing where dirty tricks are not only accepted, but condoned by end users and governments. One of Microsofts key reasons for entering the market is to protect their Windows empire and to do so they can design their Xbox systems however they like using whatever software they want to and exclude any company/service they want to. This means that if they want the Xbox platform to only connect to Windows mobile cell phones, they can do just that, or only connect using Windows services like messenger and Windows Live, they are doing just that.
The Xbox is merely an extension of the Windows platform and you must think of it that way. Its designed to shore up, and expand the Windows empire through proprietary systems and market expansion into the living room. Microsofts angle on business is in creating standards. The Windows, Office, Direct 3d etc standards. Their angle is always to be number one, but the question for the console market is "What are the standards Microsoft wishes to create?". Given the current developments in interconnectivity from cars to tvs which are all being computerised, the standards they would likely wish to create would likely to be a standard DRM passport for movies and music to be used anywhere, a standard user interface for computing on TVs and a standard specification for games machine.
Tease.
