If you can get past the irony of someone on Yahoo calling anything else outdated and irrelevant, there was an interesting article up on there recently, where writer Jay Yarrow of Yahoo’s business section painted a doomsday picture of Microsoft’s future in the video game industry. In it, the idea is presented that the PC giant may no longer have the clout and financial stability needed to stay in the video game industry.
His points are numerous, but they all center around the same basic idea that in a world that is constantly adapting more to the idea of smartphone and tablet use, the field of personal computer operations the Redmond based PC royalty once called its kingdom is no longer strong enough to keep them relevant. What’s worse is that they are not only losing ground in the home market, but more and more businesses are turning to using Macs as well. He adds to both these points by noting that Microsoft’s latest attempts to reclaim the tech throne with Windows 8 (and the systems that support it) as well as the surface tablet aren’t exactly making the impact culturally or financially to take a bite of Apple.
It’s hard to argue with any of those claims, as Microsoft’s recent financial shortcomings are well documented. However, the controversial idea presented is that as Microsoft looks to shore up its base operations for the changes of the coming world, the gaming division may be seen as expendable. The exact figure presented is that of Microsoft’s $21 billion income last year, only $364 million of it came from the Xbox division.
How I View $364 Million is, Apparently, Inaccurate
It’s a damning argument with a lot of big numbers behind it, but I find it to be ultimately flawed. For one thing, the biggest problem facing Microsoft right now is that they weren’t able to anticipate the coming changes in the technological world and make the necessary operational adaptions to keep up with them.
The 360 is the exception though. Outside of the notoriously stingy Japanese market, they have managed to make the Xbox name synonymous with mainstream gaming in a way that names like Nintendo and Playstation used to know. It’s sales figures continue to astound each quarter, Xbox Live is by far the most capable and complete of online services, the Kinect is an amazing piece of popular (if flawed) technology, and, even though exclusives aren’t as important as they used to be, the Xbox has some of the best and even more importantly is the most popular destination for major cross platform releases, due in large part to the technical issues inherent in PS3 releases and the limitations and adaptations required for Wii ports. The 360 managed to survive a shaky start that was highlighted by three glowing red rings of failure, to become the most complete system on the market.
While it’s true the Microsoft Xbox division launched in more prosperous financial times, since then in one mere generation it has managed to become a symbol of modern gaming, a household name, and the most consistent and inventive aspect of all of Microsoft’s operations in the last few years in terms of finances and public reception. While Microsoft’s current situation make the next Xbox a tricky prospect that may become more dependent on more gimmicky aspects like Kinect to become a more complete entertainment set piece and not “just” a gaming console in order to take a calculated risk in maintaining its position without breaking the bank, the fact remains that they would be stupid to write off the only part of their company that isn’t seriously lagging behind another major competitor.
Instead the reality is a little more frightening. If Microsoft can’t pick up the slack in every other field but gaming, then, and only then, will the Xbox fall. Even though the Xbox can’t claim responsibility for Microsoft’s current situation, it’s fate is still directly tied into the company overall, and all things considered, that’s not necessarily a brighter future.
The Epitaph of Microsoft?
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