Microsoft is the Gaming Business’ New King

Sep 15, 2011
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Microsoft is the Gaming Business’ New King

When I look around the gaming industry right now, it’s tough to find any single company that really “gets” it. Nintendo has the Wii, which was performing well for quite some time, but that device’s popularity has started to wane. And the 3DS has pretty much disappointed everyone from Nintendo’s CEO Satoru Iwata to his company’s most ardent supporters.

On the Sony front, the PlayStation 3 is slowly but surely starting to come out of the hole it dug for itself, but whether or not it will ever be able to catch on in a big way in the U.S. remains to be seen. And the PSP has, for all intents and purposes, been forgotten by the gaming community.

But then there’s Microsoft. The latest entrant to the gaming industry out of the three big players, Microsoft has become, in just two generations, a powerhouse in the space. And if I had to choose any company that should be crowned the new king of the gaming business, it must be Microsoft.

Let’s start with the Xbox 360. That device’s sales have been quite steady over the past several years, easily outstripping the PlayStation 3 and hanging tough against the Wii. But over the last year, it has been especially popular. In fact, Microsoft reported recently that its console has led sales in 14 of the last 15 months in the U.S.

Now, some say that Sony’s real strength is overseas, and eventually, the PlayStation 3 will trump Xbox 360 sales. But by then, assuming that happens, the industry will likely be on to the next device. And most of us won’t even care.

That said, I don’t necessarily know if that will happen. The Xbox 360 is selling exceedingly well, and thanks to the Kinect, I don’t see that changing anytime soon. And once Microsoft responds to Sony’s recent $50 price cut of the PlayStation 3 with one of its own, I think we’ll see higher-than-expected sales of the Xbox 360 this holiday season.

But Microsoft’s crowning as the king of the gaming business must go beyond the Xbox 360. As mentioned, the Kinect has proven to be quite popular among consumers. And for good reason. It’s undoubtedly the most innovative motion-gaming peripheral in the business, and as the hard-core community will tell you, it has the most potential.

The Wii and the PlayStation Move controller are nice and all, but they’re not the Kinect.

Finally, and perhaps most importantly, Microsoft deserves its position as the leading company in the industry because it didn’t follow its competitors and get bogged down in the portable-gaming space.

Right now, companies that are trying their luck in portable gaming need to rethink that strategy. Smartphones and tablets, like the iPhone and iPad, are becoming increasingly popular in the portable-gaming market. And over time, most analysts and industry observers expect that to continue. In other words, the cash cow that was once the portable-gaming space is now not so welcoming to hardware vendors. Just ask Nintendo.

Microsoft was able to see that. And rather than follow the 3DS into the space and see similarly abysmal sales, Microsoft has stayed far away from portable gaming. And its video games business is benefiting because of it.

So, say what you will about Microsoft. But the way I see it, right now, it’s the company that understands the industry better than all others. And it needs to be acknowledged for that.


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