Analyst points to Gates as Xbox 360’s big problem

Analyst Roger Ehrenberg wrote a pretty hard-hitting piece titled “Xbox 360: Bill Still Doesn’t Get It” recently and hit Microsoft for knowing that there’s a problem but not acting soon enough to curb the woes. The piece criticized Microsoft chairman and founder Bill Gates for throwing his weight around and cramping up the style of the console’s strategists, whom Ehrenberg says know better than their boss.

The analyst says Microsoft’s high-end game console has two major drawbacks: First, it has so far been over focused on a “niche demographic” and still is way over the sweet spot selling price of US$ 190 per unit. Microsoft’s people know this, he says, but Gates always gets the last say and everything else goes south from there.

“When you’ve got your Head of Interactive Entertainment, the Director of Xbox Global Platform Marketing and a Director of Xbox Product Management all publicly saying that they’ve got to crack the mass market and that lower price points are attractive, does this indicate a seismic strategic shift?” asks Ehrenberg.

Comparisons have also been drawn with respect to the Nintendo Wii, which is at this point setting the game market ablaze with sheer mass appeal due to market expansion which spills over from casual gamers, senior citizens and very young kids. He says Nintendo has learned beautifully from its past mistakes with the GameCube and took a different direction that leads not into an expensive contest against rich opponents but a different path that thrives on innovation.

“How Microsoft internalizes its lessons learned and reacts will be absolutely critical for the Xbox 360’s mass market success. But one thing is for sure: Bill has to let his product guys drive the bus,” Ehrenberg writes as he wraps up his piece. “Because if he let’s his technology-vision-thing drive strategy they are screwed.”

Via Seeking Alpha

Analyst Roger Ehrenberg wrote a pretty hard-hitting piece titled “Xbox 360: Bill Still Doesn’t Get It” recently and hit Microsoft for knowing that there’s a problem but not acting soon enough to curb the woes. The piece criticized Microsoft chairman and founder Bill Gates for throwing his weight around and cramping up the style of the console’s strategists, whom Ehrenberg says know better than their boss.

The analyst says Microsoft’s high-end game console has two major drawbacks: First, it has so far been over focused on a “niche demographic” and still is way over the sweet spot selling price of US$ 190 per unit. Microsoft’s people know this, he says, but Gates always gets the last say and everything else goes south from there.

“When you’ve got your Head of Interactive Entertainment, the Director of Xbox Global Platform Marketing and a Director of Xbox Product Management all publicly saying that they’ve got to crack the mass market and that lower price points are attractive, does this indicate a seismic strategic shift?” asks Ehrenberg.

Comparisons have also been drawn with respect to the Nintendo Wii, which is at this point setting the game market ablaze with sheer mass appeal due to market expansion which spills over from casual gamers, senior citizens and very young kids. He says Nintendo has learned beautifully from its past mistakes with the GameCube and took a different direction that leads not into an expensive contest against rich opponents but a different path that thrives on innovation.

“How Microsoft internalizes its lessons learned and reacts will be absolutely critical for the Xbox 360’s mass market success. But one thing is for sure: Bill has to let his product guys drive the bus,” Ehrenberg writes as he wraps up his piece. “Because if he let’s his technology-vision-thing drive strategy they are screwed.”

Via Seeking Alpha