- Office8 was introduced at the start of 2013 with much fanfare. In almost two quarters it has not been able to achieve a market adoption rate of even 4% (http://blogs.computerworld.com/windows/21990/four-reasons-windows-8-cant-match-vistas-adoption-rate)
- The Surface Tablet came out around Q4 of 2012. It was built to be a direct competitor to the iPad, Galaxy, and other tablets on the market. After about six months and countless ads of bright, colorful and attractive people swapping keyboards to trendy beats, the Surface owns 1.8% market share (Apple has 40% and Samsung has 18%): (http://www.geekwire.com/2013/microsoft-surface-sells-900k-units-q1-breaks-idcs-top-5-time/)
- Microsoft is pushing a strategy to get corporations to move their email into the Office365 cloud. This environment is a re-launch of the failed BPOS effort of several years past. Have you heard of Office365? If so, you're one of the few.
The big question is WHY?
It all comes down to passion, emotion, and the human connection to technology. The fact is that people will always pay more often and more freely for things that excite and entertain them. You need look no further than Las Vegas to confirm that fact. It's also why a person will gladly pay $3 for a 12 oz. beer consumed at a sports bar but complain about having to spend the same amount on a 128 oz. gallon of milk.
Based on my assertion that people pay more for entertainment, one should not be surprised that an average console video game costs about $60. That seems like a lot of money and in fact is a hefty sum. But people just don't seem to care based on purchasing habits. Here are two pieces of information that will surprise you.
- In 2012, the total box office gross for all movies shown worldwide was just about US$28 Billion. (http://www.boxofficemojo.com/yearly/chart/?view2=worldwide&yr=2012)
- In the same year, 2012, the total worldwide revenue for video games was a whopping US$68 Billion. Games represent the fastest growing component of international media of all types. (http://vgsales.wikia.com/wiki/Video_game_industry)
Microsoft knows that the future of computing will always include a space for operating systems and productivity. That's why the Office suites and various versions of Windows will keep coming out. But the true future revenue growth is going to be driven by games. Since they are just about to beat Playstation to the punch by being first to market, Bill Gates and Steve Ballmer will be counting their billions for years to come.