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  • According to a former Microsoft exec, Microsoft entered the console market because Sony refused

  • to work with the company.

  • Joachim Kempin, who was VP of Windows Sales at Microsoft for 20 years starting in 1983,

  • made the claim in a recent interview with IGN.

  • When asked why Microsoft decided to enter the console space, he asserted that,

  • "The main reason was to stop Sony. You see, Sony and Microsoftthey never had a very

  • friendly relationship, okay? And this wasn’t because Microsoft didn’t want that.”

  • Sony did license Windows for its PCs, but Kempin says the two companies were never friends.

  • But Microsoft wanted to cooperate because Sony was, in part, an entertainment business

  • -- an area outside of Microsoft’s expertise.

  • According to Kempin, as soon as Sony released the PlayStation, Microsoft said, “We have

  • to beat them.”

  • Bill Gates himself was apparently worried that a “living room PCcould eventually

  • threaten Microsoft’s traditional market. As a result, Gates and Microsoft felt they

  • had to try and tackle Sony head-on.

  • With hindsight we can see this worked out well for Microsoft, but there were many roadblocks

  • encountered along the way. Kempin explained the main problem that still exists today is

  • the huge loss made on hardware manufacturing. This means companies like Microsoft and Sony

  • are reliant upon software sales to make a profit.

  • Having witnessed Sony experience this issue at the time, Kempin went out in pursuit of

  • a PC manufacturer willing to take on the burden of making the Xbox in an effort to spare Microsoft

  • the financial apocalypse that accompanied it, but was unsuccessful.

  • He recounts, "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. 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."

  • Kempin continues: “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 theyre just maybe a little bit above break even, that’s all there is. This

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

  • What’s interesting about this story is that Sony got into the console hardware market

  • for similar reasons. Sony had been working with Nintendo on an attachment for the Super

  • Nintendo that would play games off CD. But when Nintendo canceled the agreement unexpectedly,

  • Sony decided to soldier on alone and released the

  • PlayStation.

  • For all your video game news, stay tuned to IGN.

According to a former Microsoft exec, Microsoft entered the console market because Sony refused

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IGN News - Why Microsoft Got Into The Console Business

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    阿多賓 posted on 2013/04/09
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