The answer to the question comes from understanding the marketplace.
Microsoft’s vision in the '90s was a computer on every desk and in every home.
In the late '90s and early 2000s, devices like TiVo came on the scene and disrupted the living room. Microsoft started experimenting with Media Center which was a PC that would sit between your cable box and your TV.
Also remember that Microsoft has been in gaming forever. You certainly heard of Microsoft Flight Simulator. Microsoft’s acquisition of various game studios in the '90s cemented their presence in the space.
Anyways, at the time it was theorized that some company would eventually control media flowing into the household through the TV screen and Microsoft absolutely wanted that.
The media center only found limited success, and was kind of a kludgy solution. The first versions of Xbox attempted to overcome some of this by having some media capabilities. The peak of that effort was the first version of Xbox One which actually had an HDMI input and the ability to control your cable box. Had that reached widespread use, Microsoft would have had lots of data about what TV channels everybody was watching and who was watching (remember the first version of Xbox One rolled out with a camera that could recognize who’s watching) and for how long.
Unfortunately for them, that tech was too little too late and streaming services like Netflix were already catching on. Now you can see in later versions of Xbox Microsoft has pulled back and developed game pass which is a steam-like subscription service, and hasn’t really tried to be a TV media player to the same degree anymore.
When a company gets huge, like Microsoft, they can’t really waste time chasing business efforts that might only have revenue potential in the low billions. It just doesn’t move the needle. The problem is that innovating brand new ideas that will eventually become multi-billion dollar businesses is phenomenally challenging. And people who can do that don’t work for companies like Microsoft.
So the entrepreneurs who can potentially dream up multibillion dollar disruptive business ideas go do them on their own and then companies like Microsoft snap them up as soon as they’re able to (if the founders allow it), allowing dominant players to remain dominant without needing to innovate.
The answer to the question comes from understanding the marketplace.
Microsoft’s vision in the '90s was a computer on every desk and in every home.
In the late '90s and early 2000s, devices like TiVo came on the scene and disrupted the living room. Microsoft started experimenting with Media Center which was a PC that would sit between your cable box and your TV.
Also remember that Microsoft has been in gaming forever. You certainly heard of Microsoft Flight Simulator. Microsoft’s acquisition of various game studios in the '90s cemented their presence in the space.
Anyways, at the time it was theorized that some company would eventually control media flowing into the household through the TV screen and Microsoft absolutely wanted that.
The media center only found limited success, and was kind of a kludgy solution. The first versions of Xbox attempted to overcome some of this by having some media capabilities. The peak of that effort was the first version of Xbox One which actually had an HDMI input and the ability to control your cable box. Had that reached widespread use, Microsoft would have had lots of data about what TV channels everybody was watching and who was watching (remember the first version of Xbox One rolled out with a camera that could recognize who’s watching) and for how long.
Unfortunately for them, that tech was too little too late and streaming services like Netflix were already catching on. Now you can see in later versions of Xbox Microsoft has pulled back and developed game pass which is a steam-like subscription service, and hasn’t really tried to be a TV media player to the same degree anymore.
When a company gets huge, like Microsoft, they can’t really waste time chasing business efforts that might only have revenue potential in the low billions. It just doesn’t move the needle. The problem is that innovating brand new ideas that will eventually become multi-billion dollar businesses is phenomenally challenging. And people who can do that don’t work for companies like Microsoft.
So the entrepreneurs who can potentially dream up multibillion dollar disruptive business ideas go do them on their own and then companies like Microsoft snap them up as soon as they’re able to (if the founders allow it), allowing dominant players to remain dominant without needing to innovate.