Roger
Ehrenberg spends a good deal of
time
poring over Microsoft's financial statements and doesn't like what he
sees,
particularly when it comes to the software giant's Home & Entertainment
Division, peddler of the XBox game console. Most recently, Ehrenberg has
determined that the company's foray into gaming has been a
disaster:
Sure, the Xbox 360 can be righteous and cool with hard-core gamers,
but this is not a sufficiently large user base to recoup the magnitude of
investment Microsoft has made in its gaming platform. So if this is the
strategy, they've got a problem. And if their strategy is really more
mass-market, then they've got some serious re-positioning to do relative to the
Wii, which is both cheaper and more accessible to Ma and Pa and Timmy and Tammy
gamer. In short, I am at a loss. Correct that: Microsoft is at a loss. $5.4
billion and counting.
A big number. So big Ehrenberg suggests that the company, despite is vast
financial resources, might decide to give up on the market. He asks whether
Microsoft might "have been better served by returning the extra cash to
shareholders rather than investing it in a franchise that seems to have
questionable prospects for turning around?"
Hard to imagine Microsoft conceding such a defeat. After all, it's not like
Ballmer & Co. have a
lot
of
other
distractions.
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