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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Bruce Brown who wrote (48593)	11/6/2001 9:44:16 AM
From: TigerPaw	Read Replies (2) \| Respond to of 54805

we are talking about next generation gaming in terms of the market Potentially more important: The video game may become the dominant way that the consumer accesses the internet. This would place it in the center of Microsoft's strategy. TP

To: Bruce Brown who wrote (48593)	11/6/2001 1:02:29 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 54805

hi Bruce, thanks for all the Xbox links. here is a list of Xbox posts from this thread: siliconinvestor.com Is it a big undertaking for Microsoft? Sure. You better believe it. Can they afford it? Look at their balance sheet. i don't think it's a question of whether they can afford it, but whether it is worth it. i guess MSFT is still trying to be a growth company, and they need new markets. i would like to see them start paying a dividend, but they obviously don't have to yet. if they blow 5 or 10 billion on this thing, then that is a lot of money that won't go back to shareholders. unlike most tech writedowns, this is real cash MSFT is using, not stock money like CSCO or JDSU used. their bold move interests me not just for the technology and the battles ahead, but also w/r/t the broader question of what companies owe their shareholders. i respect MSFT more than any other tech co. because they make real money--they are a real company deserving of respect in the business sense. i would only say that about a handful of Nasdaq companies. so the issue of how they behave as stewards of shareholder assets is quite interesting. for most cos at MSFT's stage of development, it is time to protect entrenched markets and return cash to investors. but MSFT marches on. traditionally, investors have required dividends in lieu of endless "marching on" because they feared management would start fighting windmills and get into egotistical turf battles that lose money. whereas dividends are a "sure thing". so one could make an argument for MSFT to take that approach. on the other hand, no other IT company has been as successful in tackling new markets and turning them into cash cows. so one can say mgmt deserves a shot here. the stuff i've said above is probably more conservative than the average investor or observer's feelings. i have seen no references in the media to the fact that MSFT is playing with their shareholders' money. to me, that just shows how permissive our standards have become w/r/t mgmt's control of assets and superiority vis-a-vis shareholder interests. but i think these things evolve, and if the product turns into a boondoggle costing many billions, then maybe investors will start demanding mgmts to be more conservative and return cash to them. on the other hand, if it's a true success, then maybe that's further justification for letting mgmts (MSFT's, at least) have free reign. in any case, in my opinion, there is more on the line than who wins the game market. What do you personally see using gg criteria, Mucho? A royalty game or a gorilla game? i wish i had a firm opinion. Sony is the most prestigious Japanese manufacturer, and most of the top game software houses are in Japan (not to mention many game consumers), so i consider it unlikely that Sony, the champion of consumer electronics, could be unseated. on the other hand, MSFT has basically an unlimited check book and clout as you mention. meanwhile, Nintendo has great characters and is smartly positioned for the kiddy set with a cheaper machine. to me, it seems Sony and MSFT are targeting the same users, and they are both too big/strong to fail. so what can happen? as matt drudge would say, "Developing..."