What Microsoft should do to stay competitive.

[Gettysburg4]

The idea that Xbox will become simply a 'game publisher' I think pays no attention to the corporate needs of Microsoft. Microsoft isn't simply in the games industry to make profit from their games unit, they are in the industry to make profit from the games industry *and* provide synergistic benefits to the rest of the organisation. If they were *just making money from games*, but lost the synergistic benefits, the division would be spun out and no longer have a home at Microsoft, as there'd be no reason to keep the two together.

Ultimately Xbox was released to make sure that a competing vision of computing could not emerge to take over from Windows. It was as much a defensive play as it was offensive. Imagine a Sony Playstation underneath just about every television in the land, with the device being used to wirelessly send a signal to another screen on your desk, where you can do word-processing and spreadsheet activities, on your wireless keyboard, running Sony enterprise software...

These are the sort of futures that can come into being when you let potential competitors play in a related part of the market, and use it to obtain massive profits and dominance. By making sure the fight with Sony took place on consoles and games, they made it an impossibility, or at least much more difficult for Sony to ever come and fight the war on their turf.

Note this is why they launched the Zune as well, and were one of the first trying to take mobile beyond simple talk and text. Music players could be parlayed into getting people within an exclusive Mac environment, same with iPhone, and you can bet at one time Nokia was placed on a board as a potential threat, not just to their mobile efforts but as a future competitor to Windows and so on.

So Microsoft as games publisher has to play in that space, it will never be used to put Microsoft's other prime divisions under the pump. If it is to exist within Microsoft it must be supporting the Windows store, or Windows, or there to be held over consumers.. you can't go "linux/steam" exclusively, as none of our games will be there etc.

...where a *pure* publisher would not have those concerns, and would be more keen to follow the market, and where consumers are going. Microsoft owns game studios to *direct* where consumers go, and to make sure Microsoft's core assets are not displaced by others. Its game studios will never exist *just* to make profit by making games, with no thought as to how much relatively they are boosting competitors that could come after their core services at a future date.