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xbox 36011111 -

Microsoft originally got into the console business to "stop Sony", a former Microsoft executive has claimed, before suggesting that, even to this day, Xbox is "not a big money-making machine for Microsoft".

Speaking to IGN, Joachim Kempin, who worked as the VP of Windows Sales at Microsoft between 1983 and 2002, said that "the main reason [Microsoft entered the console space] was to stop Sony.

"You see, Sony and Microsoft… they never had a very friendly relationship, okay? And this wasn't because Microsoft didn't want that.

"Sony was always very arm's length with Microsoft. Yeah, they bought Windows for their PCs but when you really take a hard look at that, they were never Microsoft’s friend. And Microsoft in a way wanted them to be a friend because they knew they had a lot of things we could have co-operated on because they are, in a way, an entertainment company, you know?

"I mean, at least a portion of Sony is and they had some really good things going there, but as soon as they came out with a video console, Microsoft just looked at that and said 'well, we have to beat them, so let's do our own.'"

According to IGN, Kempin claims that Microsoft felt threatened by Sony's presence in the living room, and concerned that its 'dominance of the traditional [PC] market' could be rattled by the ongoing convergence of computers and consoles.

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Kempin also revealed that he visited "several PC manufacturers" in the hope of convincing them to develop a console and prevent Microsoft from making a loss on manufacturing hardware - something the company failed to achieve.

"I went out to several PC manufacturers and tried to beg them to do the Xbox thing and keep the device manufacturing out of Microsoft," Kempin continued.

"The guys were smart enough not to bite, because they studied the Sony model and saw that Sony could not make money on that hardware model, ever. So they supplemented it with software royalties, and Microsoft copied that model."

The original Xbox and Xbox 360 were initially sold at a loss, of course. But despite the hardware now expected to be turning a profit, Kempin claims that Xbox is still "not a big money-making machine for Microsoft".

"There are actually two things," he added. "First, every developer who now has an Xbox game pays a small royalty to Microsoft for the honour of having it on that system.

"The other way they make money is that they finally got their act together on the services and actually that’s where the money is being made. So they’re just maybe a little bit above breakeven, that’s all there is. This is not a big money-making machine for Microsoft."

Microsoft is expected to announce its next-generation Xbox around March, with the latest rumours suggesting that the console may require an always-on internet connection.

Source: IGN

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pblive's Avatar

pblive

Hah.
Posted 18:02 on 06 February 2013
rbevanx's Avatar

rbevanx

Ahhh didn't read the source part at the bottom.

Quote:
Source: IGN

Explains why this is a non-story.
Posted 17:48 on 06 February 2013
Clockpunk's Avatar

Clockpunk

I note that two 'stories' that portay MS in a negative light come out just before the PS4 reveal, and immediately after they hire a new PR firm...

...

:p
Posted 17:23 on 06 February 2013
EverTheOptimist's Avatar

EverTheOptimist

"And then, like, Sandra wanted to hook up with Toby and it was totally crazy. They weren't even friends, so, like, where did that come from? You know?"
Posted 16:30 on 06 February 2013
rbevanx's Avatar

rbevanx@ altaranga

Took my exact thoughts out of my head Inception style Jon :P
Posted 16:30 on 06 February 2013
DancingRhino's Avatar

DancingRhino@ pblive

It doesn't seem that unbelievable to me, given how Microsoft has operated in the past. And it wouldn't be a case of "getting back" at a company, more of blocking them from future success in a certain area. It seems exactly what they have done, as they've had the money to throw at it, at a loss.
Posted 16:25 on 06 February 2013
altaranga's Avatar

altaranga

What the hell is this tripe?

"You see, Sony and Microsoft… they never had a very friendly relationship, okay? And this wasn't because Microsoft didn't want that."

So you wanted to be friends, but they said no.

"Sony was always very arm's length with Microsoft. Yeah, they bought Windows for their PCs but when you really take a hard look at that, they were never Microsoft’s friend. And Microsoft in a way wanted them to be a friend because they knew they had a lot of things we could have co-operated on because they are, in a way, an entertainment company, you know?"

Cry me a river.

"I mean, at least a portion of Sony is and they had some really good things going there, but as soon as they came out with a video console, Microsoft just looked at that and said 'well, we have to beat them, so let's do our own.'"

Wow, you guys must have been really cut up. Clearly not thinking straight what with all the QQing going on.

"This is not a big money-making machine for Microsoft."

But ultimately it IS a money-making machine, that's what you're saying, right? It's just not a BIG one. And in truth when you say not big to the rest of us living in the real world you're still making a tidy profit.

I can't believe someone actually came out and said this nonsense. It's awful PR. They sound like a whiny ex-girlfriend who was dumped and now wants some sort of punitive revenge.
Posted 15:53 on 06 February 2013
pblive's Avatar

pblive

It isn't really believable. No company would enter into a market spending a multi-million dollar sum just to 'get back' at another company. It smacks of the sort of silly story that came about during the Sega/Nintendo console wars of the 90's.
Posted 15:35 on 06 February 2013
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