Microsoft's Ballmer Discusses Xbox 360 Plans, MS Strategy

In an email sent to all Microsoft internal employees late last week, and obtained by the Seattle Times, Microsoft Chief Executive Steve Ballmer has laid out his plans for the tech giant's future, following financial results which, despite showing increased profit, led to a sharp decline in Microsoft stock prices. Ballmer addressed these worries by noting: "Growth in FY06 has been fueled by the richest product pipeline in Microsoft history", continuing by singling out the company's next-gen console: "At more than 3 million units sold, Xbox 360 is the fastest-selling video game console ever to reach the market. Home and Entertainment [the home of the Xbox360], Mobile and Embedded, and Business Solutions all turned in stellar quarters. Taken together, these businesses show a combined revenue growth rate of 68 percent year over year." Later in the email, which also dealt with a host of other Microsoft products, Ballmer again mentioned the video game market as key to the firm: "We are particularly excited about the new opportunities that lie before us. Xbox 360 is a great example. By July, we'll reach 5 million consoles sold and when Sony and Nintendo launch their next-generation consoles, we'll be well on the way to establishing Xbox as the gaming industry leader." He continued: "Xbox Live, which reached 1 million subscribers faster than almost any other subscription entertainment service including HBO and TiVo, remains the industry leader in online gaming, with nearly 3 million members today." Particularly notable was Ballmer's hints on the Xbox 360 as a 'trojan horse' to enable Microsoft to perhaps sell other services such as movies and music direct into living rooms, as he commented on the console and its online connectivity: "The success of Xbox 360 and Xbox Live is enabling Microsoft to begin to redefine how people create, deliver and experience entertainment. And they put us in a unique position to succeed in huge new markets." Overall, Ballmer concluded, for Microsoft's entire market, from Windows Vista to the Xbox consoles: "I believe that now is not the time to scale back the scope of our ambition or the scale of our investment. While our opportunities are greater than ever, we also face new competitors, faster-moving markets and new customer demands." Extended text from the missive is available for reading at the Seattle Times website.