Xbox and Microsoft Was Microsoft's Decision to Essay

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XBOX and Microsoft

Was Microsoft's decision to enter the game console business a good decision? Based on: Microsoft Xbox Online. University of Michigan Business School Case Study.

The XBOX is now a 6th generation video game console that is manufactured by Microsoft. The machine itself was released in November of 2001, just in time for the 2001 Holiday Season in the United States, then subsequently worldwide. The decision to manufacture and release the system was Microsoft's first plunge into the gaming console market and designed to compete with the Sony PlayStation 2, Nintendo's GameCUbe, and Sega's Dreamcast. By November of 2002, Microsoft launched the Xbox Live service that allowed players to play interactive games online (Gamer's Catch, 2006). Looking at the evolution of the system, however, we now know that the Xbox began to be discontinued in late 2005 (in Japan) and then in early 2007 in North America. The last game was released in August 2007, and even support for out-of-warranty consoles was discontinued in 2009, with all new faulty consoles replaced with Xbox 360. Xbox Live support was discontinued in April 2010 (Whitten, 2010).

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The Video-Gaming industry, though, is both fickle and highly competitive. Each season the major manufacturers reinvent the system in some way; modernize it in pieces, likely even though they could actually go from version 2 to 6 in one year. Stretching it out, though, makes it more fiscally competitive in the long run. When faced with a decision about whether it was appropriate to launch into this competition with Nintendo and Sony, who now, with the Xbox 360, continues to dominate the market, certainly Microsoft's longevity has proven the decision to be correct. The gaming market, which started with younger people, has proved to be quite robust and diverse. In fact, 82% of the gamers are now over 37 years of age and have been actively playing for over a decade. This of course means that as the demographics of the market shift (more expendable income) more money can be spent on gaming (Game Player Data, 2011).

Fiscally, Microsoft knew it was leaving money on the table. By 2004, just in the United States, console and.....

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