Obama Throws Microsoft's Xbox a Bone

We're now just a month away from seeing Microsoft (NASDAQ: MSFT  ) and Sony (NYSE: SNE  ) square off in a battle for supremacy in the next generation of consoles. However, Microsoft's platform got an unlikely shout out from President Obama. Speaking at a White House press conference on Tuesday, Obama discussed his standoff with congressional Republicans. He argued that he's willing to talk but that he won't accept extortion.  

To illustrate his beef with how he sees Republican demands, he threw out an analogy featuring the Xbox.

Think about it this way: The American people do not get to demand a ransom for doing their jobs. You don't get a chance to call your bank and say I'm not going to pay my mortgage this month unless you throw in a new car and an Xbox.

He could have very well named an actual car model. He didn't. Why go with a Mustang or Volt and upset other automakers? But he did name-drop the Xbox, instead of Sony's PlayStation or Nintendo's (NASDAQOTH: NTDOY  ) Wii. 

Going with the Xbox in this example makes sense. Microsoft's system has been the best-selling console in this country over the past two years. However, somewhere in the gray areas between patriotism and jingoism, there has to be a rationale for naming the long American company and not the two Japanese giants that have been in this business for far longer than Microsoft. 

To be fair, all three companies make their systems overseas, and all three rely largely on stateside developers for software. But despite the similarities, Microsoft often gets the somewhat misguided "buy American" hometown favorite tag, and it's happening again.

The pro-homer sentiment isn't enough. 3DO and Atari would still be making consoles if having West Coast roots was all it took to corner the domestic market. Microsoft's Xbox has earned its prime real estate as this country's defining console, leading the way as an entertainment cornerstone beyond gaming while also keeping tens of millions of diehard gamers engaged through its Xbox Live platform. 

Earning it next month will be its stiffest test, as Microsoft is pricing the Xbox One at a premium to the PlayStation 4 and at double the price of the recently discounted Wii U. It's probably safe to write off the Wii U's chances for being more than just a fringe player this console generation, though we may want to hold off on until after this holiday season before declaring the Wii U entirely dead. A lower console price and a better game lineup this holiday season may help.

However, Microsoft has to be the odds-on favorite to lead the way domestically despite the more expensive system and its initial miscues during June's E3 event. This is Microsoft's battle to lose, or next year Obama will be talking about haggling with mortgage companies for free PS4 systems.  

Microsoft isn't the only American company making a play for the world
Profiting from our increasingly global economy can be as easy as investing in your own backyard. The Motley Fool's free report "3 American Companies Set to Dominate the World" shows you how. Click here to get your free copy before it's gone.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2680095, ~/Articles/ArticleHandler.aspx, 9/26/2016 3:35:56 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,106.13 -155.32 -0.85%
S&P 500 2,147.96 -16.73 -0.77%
NASD 5,261.11 -44.64 -0.84%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/26/2016 3:10 PM
MSFT $57.03 Down -0.41 -0.71%
Microsoft CAPS Rating: ****
SNE $33.50 Down -0.10 -0.30%
Sony CAPS Rating: ***
NTDOY $33.00 Down -0.50 -1.49%
Nintendo CAPS Rating: *