2. Microsoft gets into video games
Why it didn’t make sense: Microsoft has been and always will be a PC software company, known for its Windows and Office products, as well as its other consumer and business software. However, it has not stopped Microsoft from dabbling in various markets and businesses, some where it succeeded and others it failed. However, when Microsoft decided to release its Xbox video game console in 2001, it left more than one person scratching their head. After all, Microsoft had never shown any real interest in video gaming on PC, having only released a few forgettable titles (Monster Truck Madness, Fury 3, etc.) and Sidewinder branded control pads. The demise of Sega’s Dreamcast console in the same year did not seem to discourage the software giant, nor did the prospect of competing with industry giants Sony and Nintendo.
The result: The Xbox was a moderate success for Microsoft, selling over 24 million units worldwide during its production run. While the console was unable to catch-up to the dominance the PlayStation 2 enjoyed that generation, it did surpass the 21 million units install base of the Nintendo Gamecube, putting it firmly in second place and kicking off Microsoft’s video game ambitions for the years to come. While the Xbox and its successor, the Xbox 360, continue to entertain audiences worldwide, the reality is that Microsoft is seeing very little spoils from the whole endeavour. The heavy investment by Microsoft to establish and maintain the Xbox 360 business meant that it was in the red for many years, and even though it went into the black in recent years, it only forms a small part of the company’s overall revenue.