Apple is now worth more than Microsoft

[Bodhesatva]

themanwithnoname said:
Don't see how Apple and Microsoft stock prices are related to video game sales at all...

 

I can see why one mgiht think so, but there is a causal link here. Let me take you down it.

Stock prices take in to account the markets expectations of future earnings, i.e. the market now expects Apple's profits to grow significantly more effectively than Microsoft's (or almost anyone else's).

These sorts of profits -- even when they come from outside of the video game industry -- have frequently been used as a blunt weapon  to bludgeon one's way in to the gaming industry.  Both by third party software publishers (Warner Brothers has used its capital from other forms of media to fund its investment in studios like Rock Steady), and in first party investment, most obviously Microsoft.

Put simply: Microsoft's profits from Windows and Office have played an enormous role in their ability to succesfully push the 360. They've spent ~5-6 Billion dollars on the Xbox brand to get it off the ground.

If Apple fulfills its earnings forecasts over the next several years, this will provide them ample ammunition to be as forcefully blunt as Microsoft has been, if they so chose to be. And there is reason to think they may choose to do so, as they have pushed further in to the gaming space over the last several years, both on their iPhone OS platform and on the Macintosh.