A lot of people seemed worried about Microsoft's future, given less people are buying computers running the Windows OS and their Microsoft Office cash cow could be threatened by free alternatives going forward.
But I have to say in the week I've owned an xbox 360, I can't believe how often I've used it (often for watching movies/shows on Netflix streaming) and how slick and user-friendly the platform is. The new Kinect is pretty amazing, going way past the cool intuitive approach of the Nintendo Wii with the simple controller by getting rid of the controller entirely. I threw the dance party kinect game up yesterday when some friends came over and everyone from age 5 to 50 enjoyed getting down to 70s hits.
Put simply, the xbox 360 is an incredible home entertainment delivery device, one that has already got me to spend $50 on xbox gold and $50 on xbox live points, about $250 on games, and this is in addition to the $300 unit I got as a gift. It's a pleasure to use, super handy for streaming movies, and the games are super fun.
Microsoft has a killer living room appliance and bridge to the internet that easily hooks up to your TV. If their business models around gaming are at all set up correctly, they should have no problem remaining a dominant force in the technology world.
A Whole Lotta Nothing 
Next step: Windows phone 7? Work well with xbox and Win7…
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“If their business models around gaming are at all set up correctly…”
Then this is the bizarro world. Here’s a good article from February of last year- pre-Kinect – that shows that:
a) they’ve never been able to reliably make money from their XBox Division, and
b) they’d need to sell a whole lot of Kinects to make up for what they’d lose if things started to go south for Windows and Office.
http://www.businessinsider.com/chart-of-the-day-microsoft-operating-income-by-division-2010-2
As BoingBoing said when they linked to it: “Practically all of Microsoft’s profits come from selling Windows and Office. Everything else, including Zune, Xbox and all that it does online, either loses money or barely breaks even.”
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Yeah the Xbox is pretty nice, but as noted, it doesn’t make any money. It’s worth noting that Sony barely made money on the PS2 and has lost a ton on the PS3. Nintendo was making bank off the Wii and DS because they sold a lot of consoles at a profit. I’d be surprised if the Xbox console itself does better than break even, even after five years.
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I miss you doing PVRBlog.
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Yeah, I do miss my outlet for outlandish, uninformed commentary like this. I had no idea MS makes no money off xboxes. How in god’s name is that possible given the steady and constant money I have to throw at them when playing?
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Well, you know how it works really well? Great uptime? Lots of features? Very stable? That costs money.
By comparison, please see every release of Windows on which they make a killing.
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I think the profitability problem for the XBOX platform is that MSFT has sunk so much money into it that recouping the investment will take many more years. But they’re headed in the right direction.
Sony’s never been profitable in their VAIO PC line afaik. I know the PS2 was profitable for them but the PS3 was another project, like the XBOX, where the upfront investment was so large, that recouping the investment is contingent on either massive success quickly or slow success over a long time span.
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