While Microsoft (Nasdaq: MSFT) has been a magnet for criticism and second-guessing in the wake of Apple (Nasdaq: AAPL) soaring past its market capitalization, Fool analyst Eric Bleeker thinks the company has performed admirably in consoles and better times should be ahead for its Xbox franchise.
Microsoft's Xbox 360 had great strategic direction from the start. It beat Sony's (NYSE: SNE) PlayStation 3 to the market, and has held a slim sales lead on a company that dominated the last generation of systems. As far as the future, Xbox is positioned to thwart Nintendo (OTC BB: NTDOY.PK) when the next generation rolls around. Microsoft can continue offering its Kinect motion capture device, which appeals to the casual gamers Nintendo scored with in recent years.
However, consider that the nature of video games and video game systems is shifting. When Bill Gates and company pushed Microsoft into making systems early last decade, the idea was always somewhat defensive in nature; get into the living room in case computing started shifting in that direction.
Well, we now have Google (Nasdaq: GOOG) pushing out Google TV, and Apple has a renewed push for Apple TV. Microsoft realizes the power of expanding the Xbox platform to new areas. At the Xbox 360's E3 show, Microsoft heavily featured media opportunities.
So, the time is now for Microsoft to strike and aggressively stretch the Xbox into a full-featured media platform. For example, Bing's in a trench war that can't be won against Google; engrain Bing at the center of the next Xbox and try gaining market share from a new direction. Make "Xbox 3" a combination of everything great about the idea of Google TV, but also with its compelling stand-alone games, and Microsoft's own platform for delivering media through the Zune marketplace and partnerships with ESPN and Netflix.
Everything's converging as Microsoft originally imagined, just a decade later. Microsoft's installed base at the center of video games puts it in the driver's seat and gives a new opportunity to feature search. Get aggressive with this now, Mr. Ballmer: In the two-front war with Apple and Google, here's an area where you're in the lead, whether you know it or not.
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Eric Bleeker doesn't own shares of companies listed above. Microsoft is a Motley Fool Inside Value choice. Apple, Netflix, and Nintendo are Motley Fool Stock Advisor selections. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.
