The problem with Microsoft (since it's inception) is a complete lack of originality. The company is based upon intellectual theft and dominant business strategies. It worked for years and years but the ecosystem has evolved now.
Microsoft has been chasing Apple since they released the Zune with some vague hope of success. The sad thing is there are a number of exceedingly talented individuals working at the company, it just sounds like innovation was strangled by corporate culture years ago (if it ever existed there).
I saw my first Microsoft store a month ago. It looked exactly like the Apple Store I just came out of - except the tables had a different shade, and there was nothing comparable to the XBox360+Kinect station in the Apple store.
They've been copying "things that work" for so long, and up until a few years ago, it just worked. And now that it doesn't, it seems that they have no idea what to do.
You actually bring up the one exception that I failed to mention. The XBox was a pretty idea by Microsoft and it's implementation was fantastic (it's revenues a drop in the bucket compared to other departments but still). Kinect, while a blatant response to the Nintendo Wii's accelerometers has opened up some very interesting possibilities that were previously only limited to academic level research...
In that regard I think that the XBox team is probably the only well-ran unit in the firm.
The first XBox was basically a PC with an exact spec. The 360 was plagued by RRODs. I know 5 people who own XBox 360, and every single one of them was either on the 2nd or 3rd console due to malfunction.
The Kinect was not developed at Microsoft - the camera and original skeletal modeling is from PrimeSense (although later MS took over the software part, at least). It was a marketing response to the Wii, true - but it's a third party product they bought.
"Only limited to academic level research"? I had a chance to play with the commercial ZCam almost two years before the Kinect came out; And ZCam wasn't the first product.
> In that regard I think that the XBox team is probably the only well-ran unit in the firm.
Have they turned a profit yet? I suppose they have by now, but they went through at least 4BN in funding before they did (if they have indeed). It might be well-run, but without real evidence I can't assume that.
Well, since it was lost, it was quite easy.
And it's not their first billion dollar down the drain strategy.