Comments
Xbox One Key To 'One Microsoft'
Newest First  |  Oldest First  |  Threaded View
Page 1 / 2   >   >>
melgross
50%
50%
melgross,
User Rank: Ninja
11/26/2013 | 2:04:42 PM
Re: Xbox
I've recently read another article that states that Microsoft has lost at least &2 billion this year in the entertainment portion of the new division it's in. I'm not surprised. Microsoft has lost over $12 billion in their entertainment division since the first XBox, with no clear path to stem those massive losses. No wonder Elop would get rid of it. I've been following this for years. No matter how many times Microsoft attempts to conceal those losses by merging something profitable into that division (first the small Devices division! and now profits from Android licensing), the losses can be separated out. Even Bing may be in trouble. I'm wondering when the Feds and the EU will realize that it's almost impossible, if not actually impossible, to remove bing from the Modern UI, and replace it with, say, Google. Or remove IE. Once that's understood, we could have another few years of lawsuits. I'm surprised that Google and others aren't already on top of this.
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Ninja
11/25/2013 | 8:55:56 AM
Re: AMD is the real winner in TV console wars
If chipsets were the only things that mattered to gamers, the Atari Jaguar and the TurboGrafx 16 would have been far more successful.

Other than the actual technology, gamers also care about the games available (they are not always the same, even today where some games have multiple releases, because of licensing issues; console manufacturers understand that this is where the real money is made), backwards compatibility, controls, networks, and much more.
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Ninja
11/25/2013 | 8:27:04 AM
Re: Xbox
Pursuing consumers has certainly worked for Apple as a way of leveraging the same technology in the enterprise.  One can certainly think of non-consumer applications for the Xbox and its attendant technology if one thinks about it (for instance, long-distance surgery/training).
anon0739723612
50%
50%
anon0739723612,
User Rank: Apprentice
11/24/2013 | 6:37:23 PM
MSFT selling Xbox is stupid, Wall st is greedy/ stupid
All the greedy idiots on Wall st only want short term profits....  

If Apple's (AAPL) customer loyalty  is all about the ecosystem, why not for Microsoft?

When you ask people, analysts, whoever, about why Apple won't lose all their customers to lower cost, and/or better devices, they say its all about the ecosystem.

The Cloud paradigm is about  about providing an ecosystem of services.

Google created and supports a free operating system called Android, so that the default settings drive people to their cloud services.

Google's business model is providing free services, that are supported by advertising.

It is very difficult to compete against something that is free.

As Google slowly improves their software offerings, there will be constant pressure on Microsoft's model of charging for software.

Microsoft's Board of Directors understood this situation a number of years ago, and began an aggressive long term investment program.

 

Microsoft had 2 distinct  choices

They could greatly reduce R & D,  increase dividends, and  shrink away into a company like CA technologies, a provider of legacy software.

Or, they could continue to use their world class R & D operation to  create and grow a cloud ecosystem, which would throw off cash flow for eternity.

 

The Xbox live subscriber base is a cash flow machine

Microsoft now has 50 million Xbox live subscribers, and that number will grow dramatically with the release of  the new Xbox One.

The Xbox live 50 million subscribers is similar in size to Wall street darling Netflix's (NFLX) current subscriber base.

How is it that Wall Street loves the Netflix business model, but does not like the Xbox business model?

Netflix does not have the large costs of supporting a hardware infrastructure, but they have the large costs of continually purchasing content.  

The large base of Xbox live subscribers,  attracts independent software companies to create content for the platform, similar to the Android and Apple App ecosystems.

If the Xbox business was owned by Apple or  Google,  Wall street would be singing its praises, in my opinion.

 

Search is key to devices

Microsoft has invested Billions $$  into its search service called Bing, but it is still losing money.  It is losing money because of the low volume of users.

Google did such a good job of equating its name with search, and driving the vast majority of searches to its site, that it commands massive advertising revenues and profits.




If Apple's (AAPL) customer loyalty  is all about the ecosystem, why not for Microsoft?

When you ask people, analysts, whoever, about why Apple won't lose all their customers to lower cost, and/or better devices, they say its all about the ecosystem.

The Cloud paradigm is about  about providing an ecosystem of services.

Google created and supports a free operating system called Android, so that the default settings drive people to their cloud services.

Google's business model is providing free services, that are supported by advertising.

It is very difficult to compete against something that is free.

As Google slowly improves their software offerings, there will be constant pressure on Microsoft's model of charging for software.

Microsoft's Board of Directors understood this situation a number of years ago, and began an aggressive long term investment program.

 

Microsoft had 2 distinct  choices a few years ago

They could greatly reduce R & D,  increase dividends, and  shrink away into a company like CA technologies, a provider of legacy software.

Or, they could continue to use their world class R & D operation to  create and grow a cloud ecosystem, which would throw off cash flow for eternity.

 

The Xbox live subscriber base is a cash flow machine

Microsoft now has 50 million Xbox live subscribers, and that number will grow dramatically with the release of  the new Xbox One.

The Xbox live 50 million subscribers is similar in size to Wall street darling Netflix's (NFLX) current subscriber base.

How is it that Wall Street loves the Netflix business model, but does not like the Xbox business model?

Netflix does not have the large costs of supporting a hardware infrastructure, but they have the large costs of continually purchasing content.  

The large base of Xbox live subscribers,  attracts independent software companies to create content for the platform, similar to the Android and Apple App ecosystems.

If the Xbox business was owned by Apple or  Google,  Wall street would be singing its praises, in my opinion.

 

Search is key to devices

Microsoft has invested Billions $$  into its search service called Bing, but it is still losing money.  It is losing money because of the low volume of users.

Google did such a good job of equating its name with search, and driving the vast majority of searches to its site, that it commands massive advertising revenues and profits.

Microsoft has proved that their search results are equal to or better than Google's, but  that does not immediately result in people changing the default on their computers and other devices.

For  Microsoft to evolve into a cloud services provider,  they must have a robust search capability, which is key to advertising revenues and profits.

 

SKYPE+ BING+ GAMING CONTENT+ OFFICE= A ROBUST  CLOUD ECOSYSTEM!

Since buying music on iTunes has been replaced by successful free music services,  Microsoft has more attractive cloud services than Apple, in my opinion.

 

Microsoft gaining market share in mobile

While Google's Android appears to have a lock on mobile OS,  because of their superior App offerings,  Microsoft has key strengths.

Since Microsoft is already earning decent royalties from all the major mobile phone manufacturers,  it is not hard to imagine them offering more windows based models.

Most top reviewers give windows phone OS a thumbs up, with many finding the "tile" structure superior to either Android or Apple's iOS.

 

Microsoft has all the key ingredients for success in mobile and the consumer cloud

While Microsoft's execution and reaction to the new cloud paradigm has been slow,  they now have all the pieces in place for a dramatic surge in market share.

Nobody else owns all the key pieces for success in the consumer cloud.

Microsoft will be able to leverage its key properties into a robust ecosystem that will attract more outside application developers, in my opinion.

 

Bottom line,  Wall Street is myopic as usual

Wall Street will almost always choose a quick today, over many bucks down the line.

That is why is the bulk of  the financing for  successful technology companies is done far, far, away from Wall Street, in Silicon Valley.

Companies go to Wall Street to cash out,  not for the risk capital to create and  build world leading enterprises.

Wall Street beats a very noisy short term drum, which can drown out the  advice from visionaries  living in quieter more  contemplative  places,  like Omaha, Silicon Valley, and Seattle.




Amazon's Jeff Bezos now looks like a Genius.... but if the same short term minded people (Rich Sherlund) that are calling for a MSFT breakup had their way, Amazon would not exist today!

anon0739723612
50%
50%
anon0739723612,
User Rank: Apprentice
11/24/2013 | 6:32:12 PM
No margins for Apple in the living room
Sony and MSFT are selling their "smart" boxes for cost.

They are able to do so because of the large profits from the software and the 50 million and growing  Xbox live subscribers.

 

Google will bring out a "smart" box that tries to compete at zero profit margin, because they want the advertising $$ from search advertising.

 

Amazon can also bring out a zero profit margin "smart" box, which drives users to their subscription service and online e-commerce site.

 

Apple has their music service and itunes, but will try to price their competitive  console to make a profit, which will be difficult, since there is NO carrier  subsidization model.

 

The gaming handset is relatively inexpensive. 

 

It would seem to make sense that  ALL of the above and others would attempt to repackage a PC into a "smart" TV console.

 

Google can create another USER INTERFACE (UI) to comete with the voice actuated Xbox One.  Google can then license that UI OS to Samsung and other manufacturers.

 

Apple will be forced to create their own voice actuated UI for "smart" TVs.

 

ALL  of them MUST create  voice actuated UIs, because the progression towards more NATURAL user interfaces is clear cut.

 

Voice and vision based UI require heavy GPU horsepower...  which supports the further entenchment of AMD as the leader in "smart" TV boxes.

 

 

 

 

 

 

 
anon0739723612
50%
50%
anon0739723612,
User Rank: Apprentice
11/24/2013 | 6:12:38 PM
Re: AMD is the real winner in TV console wars
@Joe,   What I think you are missing is that BOTH  MSFT and Sony use almost the EXACT same APU chip from AMD.

 

You should try to think about  consoles like you do about PCs

 

There were and still are at least a half dozen main PC manufacturers, that all use the same X86 chips from Intel and AMD.

 

Although the operating system is different between sony and MSFT,  future consoles can have the "GAME" portion OS be very similar to what is presently in PCs.

The number of PC gamers are about the same size as the game consoles.

In other words,  Samsung, Google, Apple, only have to use  the same type chip/PC architecure ,  then porting the game over to a different plaftorm becomes realtively easy.

 

 

 

 

 

 
danielcawrey
50%
50%
danielcawrey,
User Rank: Ninja
11/24/2013 | 5:02:07 PM
Re: iPhone? Really??
I don't agree with Elop's rumored assessment that the Xbox unit should be sold. 

The only reason they would do that would be to raise a ton of cash. Microsoft's Entertainment and Devices division is one of the best performing next to that of Server and Tools. 

Yet the whole thing doesn't make sense; devices are like a gateway into the company's ecosystem. Why would you want to sell that?
Michael Endler
50%
50%
Michael Endler,
User Rank: Author
11/24/2013 | 12:14:12 PM
Re: iPhone? Really??
I think the point about Apple and Google must be unclear.

I didn't intend any direct comparison between the Xbox One and an iPhone. Comparing them in an apples-to-apples way would be silly, as you imply.

The point is that Apple, Microsoft, Google, Sony and others don't just make single products; they each make a range of products that comprise an ecosystem. The ecosystem is what matters in this context, not the individual product. Can the Xbox One be the foundation for an ecosystem that appeals to not only gamers but virtually everyone with a living room? Can iOS/Apple's developer community/Apple TV serve as the foundation for a similar living room play?

Apple has a great ecosystem, and if they try to take over the living room, the ecosystem will be central to doing so. Microsoft is also pitching its living room play around not only the Xbox One, but also itS surrounding ecosystem-- Skype, SkyDrive, IE, etc. Microsoft's ecosystem is different from Apple's in many ways, and each company is taking a different tactic in deploying it. As I mention in the article, Microsoft is charging into the living room via gamers, whereas Apple is taking a different path. This article never makes the argument that an iPhone will take over the living room. Rather, it makes the argument that Microsoft and Sony are entering the living room from a certain angle (i.e. gamers) and that even if Microsoft bests Sony, it might find other formidable challengers coming from other angles (e.g. Google/Apple/Whoever, coming at the living room with a content/UI-centric model, rather than a gaming one).

Put another way, the point isn't whether Microsoft can win over gamers. Gamers are an important part of any "living room domindation" fight-- but winning the gamers doesn't win the larger war. Rather, the point is whether Microsoft can use gamers as a base from which to expand. Likewise, the point isn't that an iPhone can be compared to an Xbox; the point is whether Apple can use its iOS base to build a TV-centric ecosystem that's equally popular and useful.
anon6695251302
50%
50%
anon6695251302,
User Rank: Apprentice
11/24/2013 | 5:48:28 AM
Re: Apple
As has been stated in the article & comments, the console game market is low profit margin & quite limited in growth.  Thus, this is not a market that Apple has any interest in moving on.  Apple did make an attempt to enter this market back in the late 90's & it was a complete failure. Problem is, it requires so many resources, because you have to have a cutting edge hardware, OS & then drive a developer base, it is too costly.  Apple is better off using those resources on their computers & portable devices, where they have a high profit margin as well

 

Cheers !
telle quelle
50%
50%
telle quelle,
User Rank: Strategist
11/24/2013 | 4:37:03 AM
iPhone? Really??
How can you compare the iPhone to the ANY living room console, in terms of "living room domination"?

I honestly fail to see where any handheld device has the power to take over your lviing room, other than perhaps as a universal remote.
Page 1 / 2   >   >>


The Business of Going Digital
The Business of Going Digital
Digital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - July 22, 2014
Sophisticated attacks demand real-time risk management and continuous monitoring. Here's how federal agencies are meeting that challenge.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.