| Joelcool7 said: Umm I will say this I have an uncle who works in Microsoft's seattle facility. he told me why Microsoft entered the console industry. He stated it was because Sony was eyeing making themselves an OS and making PlayStation into a home computer brand. As PS3 is more like a computer then the last console and Sony is increasingly eyeing the computer industry for its future. So Microsoft took the initiative first by supporting the Sega DreamCast with a Microsoft XP OS as well as helping them get their console online etc...etc... However DreamCast wasn't doing its job in distrupting the industry. So Microsoft jumped in to stop Sony and cut their line of support. Sony's entertainment division at the time was heavily funded by PlayStation which brought in record profits on a yearly basis. Microsoft had to prevent Sony from entering into its own market space, so good old Bill Gates looked into entering the industry. First Mr.Gates looked into buying Nintendo out right and bringing the GameCube out under the Microsoft label. However the deal never saw actual implementation and Microsoft instead quickly hired former Sega execs etc...etc.. to put together the X-Box. The X-Box launched with pretty much no first party support. Microsoft invested over 4-billion dollars in losses during the origional X-Box to ensure it succeeded. it purchased Bungie , Rare and many other studios to bulster its first party capabilities. Microsoft had a three phase plan in terminating Sony. Entering the industry with the X-Box , using the second console to break Sony's grip on the industry and using the third console to decimate and remove Sony as a potential threat. Microsoft is supportive of Nintendo's DS and also of the Nintendo Wii because Nintendo is moving further out of Microsoft market space. Nintendo is sticking to games and only games and not intrested in producing a multimedia center to compete with the PC. But Sony is intent on bringing its PlayStation brand to the computer as has been stated many times. This makes Sony a major threat to Microsoft's stability and marketshare. If Sony entered the computer industry using its movie, music and game properties it could easily deliver a knock out punch to Apple and severly damage Microsoft. So Microsoft is acting in its best interest. My best bet is that after the next console Microsoft will merge its X-Box label onto PC. Switching to an X-Box service on computers rather then an actual X-Box console.
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That's pretty interesting, and I think it confirms what most people think Microsoft's intentions were. But the question is, was it ever a good idea? I mean, suppose MS never brought out the Xbox. Would Sony be any closer to making the PS a home computer brand? I don't think so. The PSX was (I think) meant to be to be the first step in making the PS into an all-purpose media centre which could potentially replace the PC. And it failed, and that failure had nothing to do with Microsoft's efforts. So what would be different if MS hadn't bothered making the Xbox at all?
And if MS seriously thinks that Sony could deliver a knockout blow to Apple if they felt like it, they're mad. Isn't it working out the other way round? Apple is the real threat to MS's marketshare (and they're eating into it right now). It just seems to me like MS were wasting their time when they decided that they had to beat the Playstation - they should have been trying to beat the iPod, as that really has hurt them. Of course, I am writing all this with the benefit of hindsight, but I think it shows that we can't assume that MS really is as farsighted as many people seem to think they are. I mean, take that three point plan mentioned above (enter the industry, break Sony's grip, decimate Sony). How likely is it to work out now? If it really was their plan, that ultimate goal looks to be as far away as ever.
Joelcool7, do you know if MS really planned for that kind of loss on the original Xbox? Because I think it took them by surprise, because they weren't expecting to have to make that early price cut, which in turn would have affected their entire revenue forecast. I'd be grateful if you have any more info.
