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Microsoft has no intentions of giving up on the console market

Dean Takahashi of A+E Interactive recently had the chance to sit down and chat with Microsoft's COO, Kevin Turner. Turner, who has previously worked through the ranks of Wal-Mart and was once the president of Sam's Club, has a lot on his plate as of now at Microsoft and oversees products ranging from Windows Vista to the XBOX 360.

In the interview, Turner discusses a number of issues including Microsoft's broad scope for its "digital lifestyle" initiative which includes products like the XBOX 360 and Zune as well the company's current hemorrhaging of money in the games division:

q: What do you think as a business person. These guys started up the business. They anticipated losing money. They did lose billions in the first round. When you think of those numbers, it's so high stakes. You either come out of it like Sony, or come out of it sinking billions into a crazy business. For a business, that can be very scary.

a: In those four pillars, it's important for us to have multiple pillars for growth. We think we are uniquely positioned to be able to invest what it takes to be successful in areas like entertainment and gaming. People forget. Steve reminds me it to seven, eight, or nine years before Windows was profitable. People forget that. We're in it for the long term. This is a company committed to invest for the long term. We would like to make money quickly. But that's not what changes the world. That's not what innovation allows you to do. Regardless of what you look at, it takes a lot of years. This is a company that is committed to sticking to things that we believe in. Certainly, this is a space we believe in.

Microsoft has a lot invested in the XBOX brand and it has a lot of cash on hand to drag it along for quite some time. The original XBOX was a moderate sales success (despite the large monetary losses for Microsoft), while the current XBOX 360 is coming slower out of the gate than its predecessor. Whether that's because customers are waiting to see what the PlayStation 3 offers or because the XBOX 360 doesn't yet have that "killer app" remains to be seen. Regardless, the next two months should be an interesting time for Microsoft as we should see a number of new peripherals released for the XBOX 360 including the Wireless Racing Wheel and the external HD DVD drive. And there's also that tiny little game that no one's ever heard of: Gears of War or something like that…

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This is a long term competition.
By OxBow on 10/10/2006 1:08:55 PM , Rating: 2
It's obvious that MS is going to keep pushing the XBox, even if it continues to lose money, since the holy grail of convergence will be a cash cow if they can pull it off.

Personally, I own a PS2, Gamecube, 360 and just pre-ordered my PS3 this morning (I can't wait till November 17th!). I think that the PS3 will hold a good portion of the marketshare through this generation given it's edge in technology, game library and blue ray. I've been disappointed by the 360 (if it shudders at running Oblivion, how is it going handle more powerful titles two years from now?) and I'll wait a while to see if the Wii isn't just a brief fad.

By encryptkeeper on 10/10/2006 3:48:21 PM , Rating: 2
I really don't think the Wii is going to be just a 'fad'. Looking at the Wii vs PS3 or 360, it's like looking at the DS vs the PSP two years ago. Sure the DS can't do the graphics that the PSP can, but the avenues that the new control scheme has entered is what keeps the DS going so strong. I really think (and hope) we'll see an even race between the three home consoles all the way through their lifespans. That would be great for us, it means game companies would work harder for our business (i.e. lower prices, better games, better innovation).

RE: This is a long term competition.
By splines on 10/10/2006 8:19:03 PM , Rating: 2
Bethesda starting making Oblivion long before anything was known of the 360. They essentially guessed how much more powerful systems would be, which is why it kills most gaming PC's to a greater extent than the 360. That's not indicative of the hardware.

"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch
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