| shams said: What is a better result for MS? 1/ To continue to outsell the PS3 monthly (US), and to beat it for the year 2/ To actually turn a profit in Q3 (Xmas), and to bring the Entertainment division into the black? ... I vote for "2". MS would be happy to show a profit, and for Sony to make a larger loss. |
What's better for MS is to squash Sony. They can continue to take a loss in their entertainment division (also held into the red by the Zune) if it puts Sony into a financial bind that they cannot recover from. If MS pushes Sony's buttons correctly this generation, they can force Sony to do one of two things:
1) End the PS3 early (2010 or so) and start over with the PS4
or
2) Force Sony into a multi-billion loss over this entire generation
The latter is more likely but MS needs to put the screws to Sony for a multitude of reasons. First, it allows them more leeway with developers. They won't have to pay oodles of money to every dev to get them to develop for the system. Second, Sony can't stand the same financial strain that Microsoft can. It forces their hand much more quickly and allows MS to become the initiator instead of the follower. Third, after all of this is done, it puts doubt into the consumer mind about the Playstation brand, once a foothold of the entire industry. There can't be enough said about this emotional impact on Sony. Fourth, it entrenches MS in the living room. This is their entire goal. They'll make money down the road but right now, they need users. And they need them badly.
That's probably the only thing I respect about Microsoft. They're one of the few companies out there (GE can also go in this category) that commits not to a five year run or even a ten year run. They look beyond this generation and see where they can capitalize next.
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