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Technology Stocks : How high will Microsoft fly?
MSFT 444.15-2.3%Jan 21 3:59 PM EST

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To: sandeep who wrote (54899)1/5/2001 8:31:24 PM
From: JP Sullivan  Read Replies (3) of 74651
 
What's the business model for the XBox? Surely MSFT is not planning on making money selling the OS for the device ala PCs. Or is it? If third parties are writing games for the device and presumably selling them under their own labels, then what does MSFT get out of it? Licensing fees? Please feel free to elucidate.

Not too long ago I read a TIME article about Sony's woes with PS2. Apparently, after queuing for hours gamers were less than thrilled with the quality of the games and even less enchanted with the number of available titles. It seems that success in this business lies in the quality and quantity of the software, in this case not so different from the PC world. It appears that MSFT has taken the right first step by lining up an impressive number of game writers to support the XBox and giving them the tools to get the job done. Like you say, the potential is there. So how does MSFT make money, if not from the hardware?
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