Microsoft - I honestly can't see their interest in investing in an industry with limited to no growth potential. They had hopes of how consoles could grow in importance, but those hopes are crushed by now. From a financial standpoint, Microsoft can easily keep churning out consoles if they deem it to be of strategic importance. But the benefits Nadella quoted for keeping the Xbox around were limp indeed, and playing second (or, in some markets, third) fiddle in a non-growth industry just doesn't make much sense to them. Better to invest their money to make their Windows to Mobile efforts stronger, or battling Unix in server space, defending their administrative monopolies, simply playing the financial investment game, or whatever really as long as there is substantial growth potential. And stationary consoles just don't offer that.
I wouldn't say crushed as much as significantly set back. The Xbox of the old guard (pre-power change within Microsoft) is not the Xbox of the future. Or it's possible it may still be similar, and much of this was planned from the start (features, not how they've performed in the marketplace).
Thus we see not only more convergence with Windows (the whole One Microsoft), yet at the same time features introduced that will have a synergy with Windows yet are Xbox specific.
TV tuner and the upcoming rumored TV DVR functionality (once the domain of WMC) are examples of something with potentially great synergy with Windows devices, yet will be an Xbox specific feature. And that makes perfect sense. WMC as a Windows program saw diminishing uses YoY even before they stopped active development of the program. It was nice but HTPC (which I love) is never going to take over the living room, where most people would want to use it. Xbox exists for the living room, and hence that functionality makes a lot of sense with the potential to attract more usage than WMC ever did. I'd imagine that at some point Xbox will gain the ability to stream TV and recorded TV to any Windows device.
It's also possible that Microsoft might be looking at some way to partner with cable companies. Even if their importance is being diminished year after year with regards to serving up television content due to internet alternatives, it still has large masses of subscribers. Likewise the possibility would exist for satellite TV providers.
Basically before XBO launched, it was meant to be more than just a gaming device. That took a hit when they focused way too much on the non-gaming aspects, but it hasn't stopped them from proceeding with the original plan of making the XBO significantly more than just a gaming device.
Basically, other than the always online and Kinect in every box plans, the only other thing that has changed is their marketing. The Xbox still isn't "more" focused on games (it was always going to be a games machine anyway). It's just that the marketing is more focused on games. All the non-gaming stuff is still proceeding according to plan, except perhaps with far more integration with Windows than originally planned.
Rapid feature addtions and increments in the Xbox OS shows that, at least currently, Microsoft are still 100% committed to the device and still see it as an integral part of their strategies.
Regards,
SB
