http://www.bloggingstocks.com/2009/05/29/microsoft-does-well-with-xbox-360-but-needs-to-try-harder/
"Microsoft does well with Xbox 360, but needs to try harder
The news flow is abuzz this week with stats about Microsoft Corporation (NASDAQ: MSFT) and its Xbox 360 console. According to reports, the company has sold 30 million units of the gaming hardware around the world. Nintendo Co., Ltd. (OTC: NTDOY) is still in first place with 50 million Wii consoles sold. And Sony Corporation (NYSE: SNE)? Well, the PlayStation 3 is decidedly third with roughly 22 million systems moved through retail channels. And don't give me that Xbox-360-had-a-year-over-Sony excuse. Doesn't matter. Microsoft has so far played it well.
But I'd like to see Microsoft do even better when it comes to the Xbox 360. I think, out of all the investments Microsoft makes that are outside of the core operating system asset, the Xbox 360 is the one with the most potential promise.
Of course, it's up to Microsoft to fulfill that promise. And I'd argue that worrying about things that might not matter does not bode well for the Xbox franchise.
What do I mean by that? Well, I was looking at Brian White's recent opinion on Microsoft's search-engine aspirations. He essentially said what I've been thinking lately: Microsoft may never really succeed in search.
And then there's the whole Zune thing. Can Microsoft really topple Apple, Inc. (NASDAQ: AAPL) when it comes to the iPod? Should Microsoft be trying? Okay, you can argue it was a worthwhile experiment. Shareholders deserve to have their company explore different business models.
At some point, however, there comes a time when you must focus on assets with the greatest likelihood of success. And by success I mean initiatives that can help generate cash over the long-term.
The Xbox 360 still has problems when it comes to hardware failure. That's the one thing that stops a lot of people (myself included) from buying one of the systems. There's still room for improvement in this area. Again, this is where the focus comes in.
So, Microsoft can celebrate its current victory over Sony. But don't celebrate too hard, Microsoft. I may buy your stock again soon (I've been looking at it closely for a trade and/or long-term investment), but it certainly won't be for the Xbox 360. I hope someday I can say that the Xbox 360 division is the big driver. That will never precisely happen, of course, but Microsoft should nevertheless work to improve the gaming system's contribution to shareholder value. To do that, it must forget about other stuff."
