Originally Posted by TNSF
Depends on your definition of doing well. Sure the Xbox is a popular gaming system, but they've never made any money off it. Not a penny. If they could leverage the Xbox to make money in other ways that might okay, but they haven't done that yet either.
Maybe this will change with WM7 though since Xbox will have some integration with WM7. Maybe finally things will start to come together... maybe.
In order for Microsoft to survive, they have to keep people using the software that they own licences on. Thats how they make their money. When people use other platforms, that really hurts Microsoft more than anything, because it pokes holes in their market coverage. Imagine if people stopped using DirectX. What would that do to Window's market share?
The purpose of the Xbox was to boost Microsoft's share of the gaming industry (the DIrectX API). The insanely successful Playstation brand started gobbling up the PC gaming market. Microsoft invested a lot of money keeping DirectX dominant.
It's in the name! The Xbox was originally called the "DirectX box" because it was originally developed by the DirectX team. They simply clipped "Direct" off the name. The Xbox was a very logical step because it was a superior machine to the Playstation 2 and it could run x86 DirectX based games, programmed with Microsoft's own tools. For this purpose, it was very successful with PC developers because a lot of games could be easily developed to run on both Xbox and PC. 2 birds, one stone.
Really, it was a very smart move because the PC gaming market was heading into a huge decline back then. Microsoft could have lost their share of the gaming market to Sony or someone else.
Now Microsoft is loosing a huge share of the smartphone market to Apple and Google, but there is more to it than that. They are loosing a huge share in the OS market. It's very bad for Microsoft when so many people are developing on other platforms.
The biggest danger of all is when these platforms start to scale up. This is the true genius of what Apple has been trying to do. First, they made sure everything they ever developed was cross-platform. They took all the best tech they developed for the Mac, chopped off the rest, and stuck it on a phone, then on an iPod. They sold a bunch of those, then they scaled up this new platform, specifically targeting the demands of developers and users, generation by generation until we arrive at the iOS 4. Now we go from iPhone to iPad, and from iPad to iTV, and so on and so on.
Instead of targeting a specific markets like Microsoft, Apple grew a small, well designed platform into a monster, and that monster is slowly starting to eat up everything around it. Now they are competing with everybody: Sony, Nintendo, Microsoft, Google, RIM, etc...