Microsoft (MSFT) under attack, is it about to go under??? (Part 4 of 6)

By: ispeculatornew
Date posted: 06.17.2009 (10:00 am) | Write a Comment  (5 Comments)

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console_msh_450In this fourth article, we go towards another segment of Microsoft’s business, the gaming business. Seen as a way to enter a critical business, Microsoft built its entire business to compete with Sony’s Playstation and while it has managed to do just that, it has been outlasted it seems by Nintento’s WII. While Playstation and Xbox focused mainly on the market of gamers, usually young men, Nintendo has successfully made it into the general population targetting women and even young children. This has left both Sony and Microsoft in a bad shape.

The problem of course is that both companies were completely off guard and do not seem close to launching a competitor to the Wii. This also seems to be a problem for Microsoft who has been pulling out hoards of cash to be able to compete in the market. But with Nintendo having its unique platform and Sony using the high definition “Blu-Ray” standard to help its Playstation franchise, it is not quite clear what Microsoft’s angle will be in the next years to better compete.

Just two years ago, Microsoft seemed to finally have figured it out and even got over 50% of market share for a short time period. The problem is that is now falling behind again. Of course, it is not all negative as Microsoft finally was able to generate some profits from its gaming division. And perhaps the one thing that it has a slight advantage on is its XBox live platform that enables users the possbility of competing online, against each other. Competitors do have similar plans/set-ups but it does seem like Microsoft does have an advantage.

console_1The real mesure of success of course will be to determine if Microsoft should change its target audience in the future. If it doesn’t, Nintendo will probably continue to dominate the market and it will be difficult to generate growth as Playstation and Microsoft battle it out in a much smaller market than it once was…

Another major problem is that when Microsoft started getting serious about the gaming industry, it was competing with Sony, which had high prices. The problem with Nintendo’s Wii is also that it is very agressive in its pricing policy. It is not clear that Microsoft would have entered this market if it had known it would be competing with sub 200$ systems such as the Wii. What will be Microsoft’s future in the gaming industry? Will it persevere?? What are your thoughts on the subject??

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  1. Comment by Catarina — June 18, 2009 @ 6:57 am

    Great to read you IS! It’s really interesting! Here’s my thoughts:

    I love the WII because it has all these active and non-violent games (Super Mario Bros, Wii sports, Guitar hero, Mario Party, etc.) but I currently don’t own one. I would love to but haven’t the money yet. I do understand the high market share for Nintendo. I totally think that the wii remote/ wii guitar/wii fit have something to do with it! It’s unique and user friendly. And like you said, it’s targeting everyone.

    I do own a PS II, my brother does and I love it because it has all these music games on it like guitar hero and sing star (even though they are available on WII too, or at least guitar hero is).

    I don’t like the XBOX 360 because it has little games I like, to much violent ones and role-playing games ones even though RPG can be nice but not the military/spy ones or such.

  2. […] Intelligent Speculator continues his series on Microsoft being attacked. […]

  3. Comment by IS — June 20, 2009 @ 12:55 pm

    Hello Catarina, thanks for the post, yes I think you fit exactly in the target market of the WII and probably why it is doing so well:) Think you’ll be buying one this year?

  4. […] The Intelligent Speculator has more on Microsoft going under. […]

  5. […] The Intelligent Speculator has more on Microsoft going under. […]

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