Tuttle said:
Which is why MS is trying to look for different revenue streams for Windows, such as XP MCE (rumours are that in 2005 it becomes the XP Home edition as a stopgap before Longhorn).
Look, any MS executive looks at the profit from their Windows division, and looks at the profit (cough) from their Xbox division, and adds up the numbers. The console business can be extremely profitable, but it also can be extremely expensive. Sony has dominated the past two console generations, and sold a ridiculous number of boxes - you don't think they wouldn't trade places with MS in a second?!
I don't think they Sony would, if they are thinking long term. How much is the OS division going to be worth to MS in five years? I'm not going to claim windows is going to just disappear next week, but I've been closely following the MS/Linux/open source news for the past five years now and the trend and outcome seems pretty clear to me that MS's OS revenues, and probably the office suite revenues too, are going to take a dramatic decline over the next few years. As long as MS doesn't control the hardware, they have no ability to stem the increasing number of defections to Linux/open source systems. The only thing left for MS outside of controlling the hardware seems to be IP lawsuits - see the news today about Balmer and Linux:
http://www.theregister.co.uk/2004/11/18/ballmer_linux_lawsuits/
I think it is only a matter of time before windows either gets booted from consumer pcs and/or MS has to slash their prices by some dramatic amount. If I remember correctly, I think they are already having to slash their prices by %70 from reading about some of their competitions with Linux/OpenOffice over the past year.
I don't see any way that MS can stem the Linux tide other than migrating consumers to hardware that can't run anything but a MS OS. MS has been desperately trying everything they can think of for the past three years. The IP lawsuit threats seem to be the last stand, but they seem to be just generating more hostility towards the company.