Analyst: Xbox Business a 'Disastrous Endeavor' for Microsoft

[johnlucas]

Joelcool7 said:

I personally don't believe for a second that Microsoft entered the industry to turn a profit!

Everyones going to laugh when they read that but I have many reasons to believe it, first I have an uncle who works in Seattle (M$) and one with IBM. I used to have conversations about the industry alot with them. My uncle in Seattle always said that Sony was becoming a threat. Sony had back when the PlayStation came out begun to talk about it taking oncomputer's and by PlayStation2 was really considering and openly talking about entering the personal computer buisness. Long story short Microsoft views Sony as hostile to their core market and dominant position in the PC industry.

Microsoft lead the fight by supporting Sega in numerous different ways with the DreamCast. Sega and Microsoft grew pretty tight and both companies had vested intrest in seeing DreamCast succeed. Microsoft needed/Wanted to kill Sony off stop it at the source (PlayStation). however DreamCast began to fail, and Sony became increasingly powerfull.

So around 1999/2000 Microsoft began looking at entering the industry likely as a hostile assualt to damage Sony's market shares and profits. Microsoft looked immediatly into a partnership or buyout of Nintendo. This didn't work for many reasons. M$ quickly in matter of a year or so began and finished the X-Box while other companies spend up to half a decade developing a single console Microsoft jumped in as fast as they could.

From day one Microsoft has had a three phase plan this plan consists of three consoles. Right now we have heard it mentioned many times lately. Microsoft has stated various times regardless of the 360's sales out come their will be a third console. Microsoft is determined more then ever to kill Sony off or at least break its ability to become a future threat. Microsoft has reverted to supporting Nintendo's DS which intern could be seen as a hostile move against Sony's PlayStationPortable.

Kutiragi (spelling wrong) said specifically that the PlayStation3 was a cheap computer, a personal computer. A home entertainment system set to replace computers. The PlayStation3 can be seen as a the first real step by Sony to specifically target Microsoft's strong hold the PC.

In the end I believe Microsoft made the X-Box not to really enter the game console wars but to see to it Sony didn't enter the PC wars. Microsoft's more then dominant share in the PC industry could not be compromised and Sony's a growing global threat to companies world wide. We have one more console to go and lets see just how affective this strategy is.

Besides it seems to be working Sony couldn't possibly muster the power to break into the PC market now. Their constant losses and now layoffs show they are in no position to pursue the PC market much further. If everything goes right Sony's PlayStation may even cease to exist which would end this chapter once and for all!

Sounds about right to me. Malstrom touched on similar points.

My only question is how long will the shareholders tolerate Microsoft's "Kill Bill (Sony)" plan?

And also how will this help Microsoft's plans for growth? This would only be a defensive maneuver. Microsoft's straight now but their empire needs some fresh blood or some upstart is gonna one day loosen their grip on this PC monopoly.

John Lucas